How Negative Might U.S. QE3 Announced September 13 Really Be?

By: Ian Campbell | Tue, Sep 18, 2012
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In a must-read and think-about article Liam Halligan, Chief Economist at Prosperity Capital Management, expresses his views on the U.S. quantitative easing measures introduced on Friday by Fed Chair Bernanke saying that in his view:

If he is right or even partially right, the financial markets last Friday (September 14) likely over-reacted on the positive side. If you participate in those markets I suggest you read this well constructed article - and conclude what parts of it you agree and disagree with.

You might want to consider whether it is significant that it has been reported that Egan-Jones Ratings Co. on Friday downgraded its U.S. sovereign rating to AA- from AA+. From its website, Egan-Jones Ratings describes itself as an independent Nationally Recognized Statistical Rating Organization (NRSRO) not paid by corporations issuing bonds. It seems to me the question that arises from this is: What adjustments Fitch, Moody's and Standard & Poor's will make, if any, to the U.S. credit rating going forward.

Topical Reference: US cannot continue the endless sugar rush, from The Telegraph, Liam Halligan, September 15, 2012 - reading time 5 minutes, thinking time longer. Also see Egan-Jones downgrades U.S. rating on QE3 move, from Marketwatch, Wallace Witkowski, September 14, 2012 - reading time 1 minute.

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
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Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
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