Welcome and thoughts on the market. I'm Mike Wilson, Chief Investment

Officer and Chief U.S. Equity Strategist for Morgan Stanley. Along with my

colleagues bringing you a variety of perspectives, I'll be talking about the

latest trends in the financial marketplace. It's Monday,

July 20th at 1130 a.m. in New York. So let's get after it.

Albert Einstein is credited with saying compound interest is the eighth wonder of the world.

He who understands it, earns it, and he who doesn't pays it.

Whether Mr Einstein was in fact the one who first said this, it's quite possibly one of the greatest

financial truths the world has ever known.

However, today's interest rates are zero, and even negative in some cases.

On a real basis, interest rates are negative all the way out to 30 years in the U.S, and while we can't ask him today, I wonder

what Albert Einstein would have to say about that.

It seems to me that the corollary to his statement might apply.

When real interest rates are negative, it's called financial repression, and it very well might be the

ninth wonder of the world.

It's a boon to borrowers and attacks on savers.

As with compound interest, he who understands it reaps its rewards, while he who doesn't watches his real well shrink.

A big part of investing is understanding what investment regime we're in.

Over the past 20 years we've been living in a world dominated by monetary policy decisions.

This monetary policy dominance has been a function of three things.

First, potential growth in the developed world has been falling as population growth slowed

and productivity failed to maintain its blistering pace in the 1990s.

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