WHEN THE FINANCIAL CRISIS OF 2008 BEGAN four years ago, many observers were hopeful that the risk of another crisis in the financial system would by now have waned, and that the global economy would have fully recovered, with growth once again on a steady path. However, these hopes remain far from fulfilled. A theme that runs through several articles in this issue of The Analyst is coping with the economic and financial problems of our times.

In one article, a leading institutional fund manager, James Montier of Grantham, Mayo, Van Otterloo, outlines a cogent argument to the attendees of the 65th Annual Conference of CFA Institute in Chicago that the pitfalls of modern financial theory and practice have still not been fully addressed: flawed models, policies, incentives, and behaviour continue to interact to facilitate financial failures, small and large. Montier also presents some very practical remedies for investment practitioners.

In the field of private equity, we have an article on the opportunities and challenges that exist in these turbulent times; while on the home front, we have an update on the Ontario Securities Commission’s new strategy for anticipating and responding to the problems and fundamental changes in the domestic and global capital markets as well as on how the commission is responding to current issues.

“Political economy” is a somewhat outmoded term that was largely replaced in the 20th century by the term “economics,” meaning the use of scientific and mathematical methods to maximize the economic utility of individuals. However, political economy is not just about economics but also concerns itself with the sociology, philosophy, ideology, and history that support the development of government policies and structures. The need to look for solutions to economic problems through the wider field of political economy is evident in the difficulties of the eurozone today and is cited by best-selling author Woody Brock in his book American Gridlock. One of our articles explores Brock’s perspectives on the impasse in U.S. politics (and hence economic policy) of the past two years and his proposals for how it can be broken.

Other articles cover risk management strategies, the results of CFA societies’ national compensation survey, and investment prospects in the energy sector in China. News about our society and its members, results of our regular website surveys, and timely book reviews round out the current issue.

We welcome Ronald Schwarz, CFA as the newly elected Chair, Member Communications and as always we welcome your comments, suggestions, and contributions.