In the case of quantities of financial assets held by investors in various nations, the simplest version of portfolio theory implies that every investor should hold assets in proportion to the world portfolio.
Foreign demand for euro area exports has declined, and domestic factors, notably very low confidence and tight financing conditions, have adversely affected domestic demand. Taken together with other available economic data for the euro area, this points to very negative quarter-on-quarter real GDP growth in the last quarter of 2008. This information is in line with our current analysis and forward-looking assessment.