Practical analysis for investment professionals
08 October 2013

Turning Points: The Untaper and the Markets’ Reactions

Posted In: Weekend Reads

The Fed’s decision NOT to taper has unwound much of the recent market pressures related to the expected end of monetary easing. The dollar has begun to fall again, the Indian rupee is recovering, and markets have begun to seek higher spreads and the attendant higher risk. It makes one wonder how many times the markets will believe the Fed when it cries wolf.

There continue to be growing signs of a credit bubble manifesting around the globe. In the United States, it appears that credit quality is starting to slip as banks are becoming more friendly to lower credit borrows. In private equity, Blackstone sees an “epic” credit bubble. Real estate in China appears to be frothy. And, with the Federal Reserve presently unable to unwind easing, these bubbles could and should grow in magnitude materially.

Here’s a wrap-up of key issues affecting global markets for fundamental investors.

Currencies

Commodities


China’s Direction

Credit Markets

Derivatives

Energy

Euro Crisis

Hedge Fund Money

Interest Rates and Central Banks

Japanese Debt and Inflation

Stock Market

US Real Estate Bubble 2.0?

Time Capsule


Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

About the Author(s)
Ron Rimkus, CFA

Ron Rimkus, CFA, was Director of Economics & Alternative Assets at CFA Institute, where he wrote about economics, monetary policy, currencies, global macro, behavioral finance, fixed income and alternative investments, such as gold and bitcoin (among other things). Previously, he served as SVP and Director of Large-cap Equity Products for BB&T Asset Management, where he led a team of research analysts, 300 regional portfolio managers, client service specialists, and marketing staff. He also served as a Senior Vice President and Lead Portfolio Manager of large-cap equity products at Mesirow Financial. Rimkus earned a BA degree in economics from Brown University and his MBA from the Anderson School of Management at UCLA. Topical Expertise: Alternative Investments · Economics

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