Salient to Investors: Mohamed El-Erian at Pimco said: The Fed’s determination to taper puts more risk in risk assets, such as stocks. The safety margin built into risk assets is much less now. The Fed is wary of upsetting financial markets, as it sees financial market strength as a key
READ MORE... →Salient to Investors: David Stockman said: QE is brewing asset bubbles around the world, exporting its lunatic policy worldwide Central banks all over the world have been massively expanding their balance sheets, and as a result of that there are bubbles in everything in the world, asset values are exaggerated
READ MORE... →Salient to Investors: Alan Greenspan said: The US economy will grow closer to 2 percent in 2014 as it is restrained by a degree of uncertainty that is reducing investment, below the median economist estimate of 2.6 percent. The US stock market is not in a bubble. The economy is
READ MORE... →Salient to Investors: Richard Koo at Nomura said: Mini-bubbles can occur during a balance sheet recession, like this one. Not yet seeing a big bubble, but concerned about mini bubbles. In a monetary policy-driven market, money created by an accommodative central bank typically spreads throughout the economy and lifts markets. During
READ MORE... →Salient to Investors: Ellen Zentner at Morgan Stanley said: The Fed’s near-zero interest rate and QE is holding down US bond rates, meaning the US Treasury yield curve would struggle to invert, crimping its effectiveness as an indicator of business cycles. Yield curve inversion signals investors are betting on weaker
READ MORE... →Salient to Investors: Mohamed El-Erian at Pimco said: The global economy will expand 2.75 percent to 3.25 percent in 2014. The big question is less the next 12 months and more what comes after, given we are being sustained by experimental, untested policies. The US and Japan have outperformed other
READ MORE... →Salient to Investors: Goldman Sachs expects the Reserve Bank of India to raise the policy interest rate to 8.5 percent in 2014 from 7.75 percent. Radhika Rao at DBS Bank said Indian growth will remain in low gear, with the odds of expenditure restraint high given India has to prevent
READ MORE... →Salient to Investors: Ken Fisher at Fisher Investments said: Ending QE would be the most bullish thing we can do because it is not a stimulus – it flattens the yield curve and slows things down. We are doing well despite QE, not because of it. Historically, a steeper yield
READ MORE... →Salient to Investors: Traders do not expect the Fed to raise interest rates until 9 months after ending QE, or late 2015. Gregory Whiteley at DoubleLine Capital said a fed funds increase on the heels of that last QE purchase is no longer the consensus. Joe Ramos at Lazard Asset
READ MORE... →Salient to Investors: Jeremy Grantham at BMO writes: The Greenspan-Bernanke policy of excessive stimulus, now administered by Yellen, will continue, and that the path of least resistance, for the market is up. It would take a severe economic shock to outweigh the effect of the Fed’s relentless pumping of the
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