Dr. Michael A. Yoshikami, Founder and CEO of Destination Wealth Management in San Francisco, California, answers the following questions:
- Fears of a liquidity crunch have driven Chinese stocks into bear market territory - it seems as if reforms are being prioritised over short-term growth. However, do u fret that the Chinese govt has gone too far, hurting medium-term earnings prospects?
- Many feel that the present is the best time to address China’s rampant liquidity driven growth. And as a result, its beaten-down stock market is looking decidedly attractive.Do you share this view?
- Also, how confident are you that China’s central bank will not allow the tight liquidity conditions to develop into a banking crisis that could destabilise its economy?
- The China situation has combined with Fed tapering statements to lead to a stampede in global bonds. But hedge funds like Greylock Capital say all this selling seems a little irrational however because the fundamental story seems to not be all that bad. Do you agree?
- It certainly seems ironic, since the very reason for the withdrawal of QE -- a recovering US economy -- is causing a major selloff in bonds worldwide?
- And then we have folks like the billionaire investor Ken Fisher suggesting that with key interest rates rising in the US, that might encourage banks to lend more money for hiring and expansion.In other words, an end to QE is actually a bullish scenario. Your view?
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