Bill Blain – Strategist for Mint Partners – joined Nick Batsford and Zak Mir in the Tip TV studio to discuss why Q3 was such a disaster for the markets, an whether or not we’re likely to see much change in the final quarter of the year.
The legacy of QE.
Despite the financial crisis being more than 7 years behind us, investors are beginning to ask why the economy is still under threat. Bill Blain believes that this is because of QE. Instead of creating inflation and investment, the policy created trillions of dollars of corporate debt that was wasted on stock buy-backs, M&A, and buried into pension schemes. Blain believes that this corrective phase is coming as investors are waking up.
Will animal spirits triumph?
Q4 could either continue the summer stock market woes, or investment could start to find brighter spots for growth. Blain believes there are still companies with growth, and sentiment will eventually become bullish again, but until there will be many losers as the global economy undergoes more changes.