Real Probability of QE From ECB in 2014: Bevan

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Dec. 23 (Bloomberg) -- James Bevan, Chief Investment Officer at CCLA Investment Management, discusses factors that may temper the positive economic outlook for 2014. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

We need to get caught up in all of the good news.

Realistically, fundamentals are very strong.

Companies are saying all the right things.

What might go wrong?

Number one, the united states.

The economy is moving at a rate that is consistent with the fed taking some money away, but still delivering growth.

If we get too much growth, we may see the fed acting more aggressively and raising interest rates ahead of expectations.

That would be calamitous for markets.

If you said to me what is going on at the federal reserve, they have been buying $85 billion per month.

They are going down to $75 billion per month.

At his nonsense.

They were buying $94 billion per month for the first half of last year.

Jumps in liquidity in the global marketplace is huge.

There is a clear intent to begin to take it away.

For the moment, the markets are clearly understanding that the beginning of tapering does not mean tightening.

Absolutely.

If the economy continues to move ahead, the federal reserve will have to say this is not just an issue of less support.

At what point do we normalize interest rates?

We are low interest rate junkies.

We have never actually solved the fundamental debt problem that took us to the edge of the abyss in the first place.

If companies get their teeth behind this recovery and begin to invest, that is bad news for earnings per share.

We begin to see companies build up excess capital.

That is what we have to worry about.

As well as a reduction in competitive positioning.

We had a rally in 2013. could 2014, even if companies continue to do the right wing, will shares be up next year?

My prediction is the s&p was up to 1950. we might see material less growth from china.

We want long-term, sustainable growth.

I suspect that china's authorities will be aggressive in the near-term to cement a much more solid platform of growth for the long-term.

That could be bad news.

A concern about a credit crunch in china?

If you look at the international lending figures, very hard to reconcile with -- what china says is going on.

China says it borrows in aggregate.

That does not add up to the politics in europe, the european central bank will do anything other than support recovery.

The european central bank is desperate.

The bundesbank is going to run out of cash next year.

Very quickly, the euro is shooting up.

Will they have to do qe?

I think there is a real probability that they will.

I think the euro economy is way too weak.

The periphery, which had all of the benefits, sentiment you might want to rely on.

James bevan, we will be back with james shortly talking about emerging markets and industry groups.

Here is a look at what else is coming up on "on the move." apple and china mobile team up finally.

That is the deal.

What does it mean for the mobile sector, next week after 10 years behind bars, he will campaign for the political prisoners.

And he says online gambling is like cancer.

We will hear from the world's 12th richest man.

We will be right back.

This text has been automatically generated. It may not be 100% accurate.

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