FNArena Talks | May 27 2013
Are members of the US Federal Reserve playing games with global investors? FNArena Editor Rudi Filapek-Vandyck believes there's a strategy at the Fed to not allow for too much complacency in financial markets as the long term consequences could turn out both unpredictable and uncontrollable.
Within this framework, he observes the irony that in order to solve the mispricing of risk by a small group of investors pre-2008, central bankers have sought to solve the subsequent problems by forcing the rest of the world into a broad mispricing of risk across the board. What this means for investors is that today's equity markets do not come risk-free, he argues. Apart from any considerations regarding potential changes in Fed policies, investors need not look any further than the slew of profit warnings from mining services providers currently hitting the local share market.
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