The Economist (March 8)
“Western firms have piled into emerging markets in the past 20 years. Now comes the reckoning.” The Fed’s quantitative easing, an over-exuberant investment cycle, rising local currency prices for commodities, and other factors are undermining the emerging market paradigm. “Plenty of firms and some whole industries need a rethink. The emerging-market rush may end up like a giant version of the first internet boom 15 years ago. The broad thrust was right but some big mistakes were made.”
Tags: Commodities, Currency prices, Emerging markets, Fed, Firms, Industries, Internet boom, Investment, Over-exuberant, Quantitative easing, Rethink
Los Angeles Times (October 28)
“Policymakers are clear about their bond-buying goal, but the Street isn’t listening.” Current Federal Reserve Chairman Ben S. Bernanke stated publicly that quantitative easing would continue until unemployment falls to 6.5%. “If we generate 200,000 new jobs every month, tapering starts in November 2016. If we see an average of only 148,000 new jobs each month, we won’t ever see Fed tapering…. Tapering is still a long way off.”
Tags: Bernanke, Bond-buying, Fed, Jobs, Policymakers, Quantitative easing, Tapering, Unemployment, Wall Street
Financial Times (September 2)
Expectations of tapering by the Federal Reserve have “increased market volatility. And, as in past episodes of Fed tightening, emerging markets are at the centre of the turmoil…. No matter how gradual the tapering of QE, abrupt adjustments will occur. It is in the nature of financial markets to overreact and overshoot.”
Tags: Adjustments, Emerging markets, Expectations, Fed, Financial markets, Overreact, Quantitative easing, Tapering, Tightening, Volatility
The Economist (August 24)
Since the U.S. Federal Reserve intimated that it would begin tapering its quantitative easing program in 2013, “there has been a great sucking of funds from emerging markets. Currencies and shares have tumbled, from Brazil to Indonesia, but one country has been particularly badly hit.” India is looking less like “an economic miracle” and more like a country teetering on the verge of a full-blown crisis. “The rupee has tumbled by 13% in three months. The stockmarket is down by a quarter in dollar terms. Borrowing rates are at levels last seen after Lehman Brothers’ demise. Bank shares have sunk.”
Tags: Banks, Brazil, Crisis, Currencies, Emerging markets, Fed, India, Indonesia, Lehman Brothers, Miracle, Quantitative easing, Rupee, Shares, Stockmarket, Tapering, U.S.
Euromoney (August Issue)
According to economists, Indonesia’s economy may face a “double blow” from China and the U.S. “Indonesia is the emerging market most vulnerable to the consequences of the US Federal Reserve’s tapering of quantitative easing and to China’s economic slowdown.”
Tags: China, Economic slowdown, Emerging markets, Fed, Indonesia, Quantitative easing, Tapering, U.S., Vulnerable
New York Times (July 30)
President Obama will need to appoint a replacement later this year to replace Federal Reserve Chairman Ben Bernanke when his term expires in January 2014. The incoming Chairman will be challenged to delicately wind down the Fed’s massive quantitative easing measures. Camps of support are already arising around the two front runners Lawrence Summers and Janet Yellen. The New York Times comes down firmly in the former’s support, writing “no one else can match Janet Yellen’s combination of academic credentials and policy-making experience. And no one ever confirmed to the job has come to it with as deep a grounding in both the theory and practice of monetary and regulatory policy as Ms. Yellen would bring.” Should she be confirmed, she would also become the first woman to head the Fed.President Obama will need to appoint a replacement later this year to replace Federal Reserve Chairman Ben Bernanke when his term expires in January 2014. The incoming Chairman will be challenged to delicately wind down the Fed’s massive quantitative easing measures. Camps of support are already arising around the two front runners Lawrence Summers and Janet Yellen. The New York Times comes down firmly in the former’s support, writing “no one else can match Janet Yellen’s combination of academic credentials and policy-making experience. And no one ever confirmed to the job has come to it with as deep a grounding in both the theory and practice of monetary and regulatory policy as Ms. Yellen would bring.” Should she be confirmed, she would also become the first woman to head the Fed.
Tags: Appointment, Ben Bernanke, Chairman, Federal Reserve, Janet Yellen, Lawrence Summers, Obama, Quantitative easing, Replacement, U.S.
Washington Post (June 20)
As the Federal Reserve moves closer to an eventual unwinding of its massive quantitative easing program, the dollar looks poised to gain, disadvantaging U.S. exports. “For investors around the world, the great unwinding has begun, with sharp swings in different world bond and stock markets as money is shifted in response to the likelihood of higher interest rates and possibly stronger economic growth in the U.S. Currency markets are moving too – and it may mean a further drag on U.S. exports that are already stuck in neutral.”As the Federal Reserve moves closer to an eventual unwinding of its massive quantitative easing program, the dollar looks poised to gain, disadvantaging U.S. exports. “For investors around the world, the great unwinding has begun, with sharp swings in different world bond and stock markets as money is shifted in response to the likelihood of higher interest rates and possibly stronger economic growth in the U.S. Currency markets are moving too – and it may mean a further drag on U.S. exports that are already stuck in neutral.”
Tags: Bonds, Currency markets, Exports, Fed, Quantitative easing, Stocks, Swings, U.S., Unwinding
Wall Street Journal (June 18)
“It is easier to get on the bull than to get off.” Financial markets have been lurching at the mere hint of change by the Federal Reserve. “The biggest question about the Fed’s policy of near-zero interest rates and unlimited quantitative easing has always been: What happens when the music stops?… Our view is that the sooner the Fed begins to unwind, the better.”
Forbes (April 4, 2013)
“Quantitative easing is a global craze, and now a man named Kuroda is showing Bernanke and Draghi how to do it big time….While markets expected Kuroda’s BoJ to make a bold move, the size of the purchases and the wide array of financial assets the central bank plans to stock up on came as a surprise, boosting Japanese stocks and sending the Nikkei 225 higher by 2.2%.”
Tags: Bernanke, BOJ, Central bank, Draghi, Japan, Kuroda, Nikkei, Quantitative easing, Stocks
Forbes (September 9)
“There is a country that, more than any other, needs the Federal Reserve to embark on QE3.” A third program of quantitative easing “may not help the U.S., but China certainly stands to gain.” QE3 is expected to weaken the dollar. “A weak American currency means a weak Chinese one, and a weak Chinese currency helps the nation’s struggling exporters on global markets.”
