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Sunday, October 14, 2012

QE3 reduces the tail risk of an outright economic contraction, but is unlikely to lead to a sustained recover

Nouriel Roubini : In short, QE3 reduces the tail risk of an outright economic contraction, but is unlikely to lead to a sustained recovery in an economy that is still enduring a painful deleveraging process. In the short run, QE3 will lead investors to take on risk, and will stimulate modest asset reflation. But the equity-price rise is likely to fizzle out over time if economic growth disappoints, as is likely, and drags down expectations about corporate revenues and profitability. - in Project Syndicate
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