Did the Fed Miss an Opportunity to Taper QE?

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Oct. 30 (Bloomberg) -- Catalyst Mutual Funds' David Miller and Wells Fargo Funds Management's John Manley discuss the Fed's decision to press on with $85 billion in monthly bond purchases. They speak with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Good to have you with us.

I want to start off with you.

The federal reserve says we will continue to buy 85 billion dollars worth of treasuries per month.

Do you agree?

I do not think they can taper.

The numbers for employment they need to keep pumping money into the economy.

Keep pumping money into the economy.

My guess is the chairman of the federal reserve wants to be absolutely sure nothing happens.

In washington, everyone is a lame duck.

I think when it comes to him, he has this unbalanced risk-reward.

If he is one-month too early, it is a real problem.

Five months too late, i do not think it is a problem at all.

Do stocks continued to go higher?

I think they will over the next few years.

A little bit worried there is not much to worry about.

We will not put that to you right now.

We will let you think about that.

We purchased stocks.

What has been the trend?

What we have seen lately is there has been a lots of selling and technology and buying and a thick materials and energy.

Companies like report macular ran made over 50 billion.

The tech companies have had a lot of selling.

In particular, ibm.

What does that tell you?

They are supposed to know the companies better than anyone.

What does that tell you about the health of investment?

This will give you a little bit of an edge.

Sometimes there are other reasons.

People need money.

When they see it, a lot of times i think it can be very helpful.

They are readjusting to it.

I look at that and a lot of other things.

You have investors who invest using index funds.

They say i will buy and s&p fund, whatever it is.

I do not think i am that smart.

We are dealing with five percent corrections.

It can be a glancing blow.

5-10% is a hard correction to play.

How many have we had?

It takes the edge off.

I think deep down people are worried.

Take them down five percent, you scratch the ball, find the bear.

That is was abrupt -- provides the support to the market.

Maybe it is the idea that tapering is coming up some point in time.

I think the market is not expensive.

The fed is accommodated in bovary -- will remain so.

We got the earnings today from fisa for example.

Announcing a $5 billion share buyback.

Do you take into account the buybacks that companies do?

The best situation is when you have a buyback and shareholders are valiant -- and investors are by him.

A purchase at $21 per share.

Now you see trading north of 50 after they beat earnings.

Pretty interesting.

The best situation are when you have buybacks and insiders are buying with their own money on top of that.

Is there a specific criteria in terms of determining what level determines them going into your fund?

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


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