The QE2 paradox: why bad news for the economy is good for markets

ON ASSET ALLOCATION

City Asset Management's James Calder on why QE2 may pave the way for further global stimulus measures

The announcement of QE2 by the Fed had the desired effect on equity markets. However, it also served to highlight the paradox bad news for the economy is actually good news for global markets, as it potentially paves the way for further stimulus measures. Against a gloomy macroeconomic backdrop in much of the West, areas with growth potential, notably Asia and emerging markets, have been a focus of investor attention for some time. While these opportunities may be well flagged, the fundamental investment case remains sound, with the absence of structural debt problems; the emergence a...