Sat, Jul 30, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Operation Twist will prevail – but will take time

Thursday, September 29, 2011

Written by: Stuart Thomson, Chief Market Economist, Ignis Asset Management. Issued by Ignis Investment Services Ltd. Authorised and regulated by the Financial Services Authority. This article contains the personal views of the author and do not necessarily reflect those of Ignis Asset Management.

Summary “The Fed has commenced operation twist in greater size than consensus expectations amid a pervasive air of gloom over domestic and global economy. We believe that Twist is an important milestone in the Fed’s journey of balance sheet expansion. It is a necessary step given the poor construction and implementation of both QE1 and QE2. It is designed to lower the term structure of interest rates to levels that are attractive for corporations to increase investment in long-term productive assets and escape the paradox of thrift.

“Companies have been hoarding cash on their balance sheets and investment as a percentage of profits has fallen to multi-decade lows. This reflects corporate liquidity preference in the wake of the credit crunch. This risk aversion will not dissipate in the near-term and particularly when there are concerns over the European Sovereign Debt crisis and the Fed’s own warnings that growth remains slow and that the risks to the outlook are biased to the downside. This suggests that while Operation Twist is an important stimulus, the economic impact of this stimulus will take time to prevail.

“Moreover, whilst operation twist provides an......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: California-based manager launches long/short equity hedge fund with unique algorithm[more]

    Benedicte Gravrand, Opalesque London for New Managers: SJL Capital LLC, an investment advisory firm based in California, has launched its maiden fund, the SJL MarketDNA Hedge Fund LP. The fund, which began trading

  2. Manny Roman to move from Man to Pimco[more]

    Benedicte Gravrand, Opalesque London: Emmanuel (Manny) Roman, an investment world veteran, has been hired by PIMCO, the large US bond fund house, as chief executive officer. PIMCO's current CEO Douglas Hodge will assume a new role as managing director and senior advisor when Roman joins P

  3. Opalesque Exclusive: ArbitrOption outperforms benchmarks, up 7.18% in H1[more]

    Komfie Manalo, Opalesque Asia: Independent registered advisor ArbitrOption breezed through the tumultuous Brexit referendum and outperformed its benchmarks. ArbitrOption was up 7.18% in the first half of 2016 compared to the S&P 500 which gain

  4. Europe - European hedge funds shrink and shutter as turmoil hurts returns, Investors go bargain-hunting for U.K. property after Brexit vote, Brexit: Guidance for fund directors - what to know and what to ask[more]

    European hedge funds shrink and shutter as turmoil hurts returns From Bloomberg.com: Europe’s hedge-fund industry contracted for a sixth straight quarter as the U.K.’s decision to leave the European Union and concerns that China’s growth is slowing caused losses and forced some money man

  5. Platinum Partners starts liquidation of hedge funds following municipal union kickback scandal[more]

    Komfie Manalo, Opalesque Asia: Platinum Partners, the hedge fund in the middle of a New York City municipal union kickback investigation, is reported to be liquidating two of its funds, the New