The letter of the day is W

MONACO (MarketWatch) -- Fund managers gathered here perhaps got a little indigestion along with their breakfast at the first address of the day.

The managing director of Cerulli Associates got things off to a rousing start with a prediction that global funds under management this year are unlikely to repeat the not-so-spectacular growth from last year -- a 16.2% gain. But there was even more gloom tinged in that. Shiv Taneja, addressing a crowded room of early-rising managers said that gain from 2009 came wholeheartedly from a recovery in markets.

(Fund managers, of course, can see their assets grow two ways: by having the value of their assets rise, or by customers handing new assets to them.)

"The global market rally in 2009 was the only reason there was global assets on the table of a half trillion dollars last year," he said. "This year, I'll be surprised to see 15% growth."

And it appears managers have more questions than answers about the markets in general. Taneja asked if anyone in the room would like to comment on whether they think 2010 will be a tougher year for managers? No one raised a hand. He pointed out that managers in the asset allocation industry are just as worried as the rest of the world about the potential of a double dip, which has been reflected in the money the fund industry is willing to invest in themselves, such as personnel.

"They're caught up in the middle. If they pull back now will they miss the recovery or if they expand will they need to pull back later?"

The view from a former Lehman's vp
Double dip? Definitely, says Larry McDonald, the former vice president of Lehman Brothers who was in Monaco to give a keynote address and promote his book charting the downfall of the company. "What's happening right now is that in the United States, the consumer is delevering because the old infrastructure of lending is no longer around anymore," he said in an interview with MarketWatch.

http://www.marketwatch.com/story/story/print?guid=E5BF962D-B906-4F8E-8971-F4FBF6FDBF04

Investment bankers forced to pimp their books in Monaco.