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Ahead of a recent appearance in Hong Kong, one minder for Ben Bernanke suggested?that the former chairman of the Federal Reserve should be asked not about the cost of quantitative easing, but about the impact of the policy instead. For years, central bankers have been reluctant to suggest unconventional monetary policies even had costs. But while developed markets plunge deeper into uncharted financial territory because of central bank actions, the drawbacks of such policies are becoming apparent. The negative effects will become more obvious. This will occur as asset price inflation — the main consequence of central bank policies — goes into reverse, robbing financial engineering of its efficacy and flattening the yield curve. Suddenly, the success of central bankers in lifting financial asset prices through unconventional monetary policies seems to be coming to an end. Those policies did little for the real economy on the way up, because most companies engaged more in share buybacks than in investing in capacity, and economic growth in the US, for example, never broke through a range of 2 per cent to 2.5 per cent, falling under 1 per cent in the fourth quarter. The impact on the real economy on the way down will be greater. The Bank of Japan’s use of negative rates, dovish coos from New York Fed chairman William Dudley, and statements from Mr Bernanke’s successor, Janet Yellen, last week spooked markets rather than soothed them. The extent to which QE is losing effectiveness can be seen best in the drop in private equity firms’ share prices. In the past few years, it is possible to argue that no single group of investors has been as big a beneficiary of QE as these large alternative investment companies. They could finance deals with cheap debt, sell down holdings of portfolio companies in stock markets which kept rising, and mark up the value of their privately held portfolio companies on the basis of their listed peers. Now those perfect conditions are going into reverse. That’s why last week Apollo Global Management and Carlyle said they were planning some financial engineering by buying back their own shares for the first time. They may be too late. “The share buyback boom has peaked,” noted Christopher Wood, strategist for the CLSA arm of Citic Securities, citing “the dramatic underperformance of the S&P 500 Share Buyback index relative to the S&P 500 itself”. He added: “The stock market has been ignoring the clear evidence of deteriorating margins and profitability, a form of deception encouraged by the share buybacks.” Meanwhile, Blackstone’s Steve Schwarzman spent much of his recent earnings call with his investors talking up the dividend yield (11 per cent as of January 28, the day of the call) and value of his firm’s shares. “Right now you’re getting Blackstone on sale,” said the eternal salesman. We are in a world where the yield curve is flattening and there is little demand to borrow other than to engage in financial engineering. Banks’ inability to earn money in that world dominated headlines last week. But it will leave other kinds of financial institutions in even worse shape, especially insurers that sold guaranteed investment contracts. And savers will earn even less on their savings. In an election year in the US, it seems unlikely the Fed will return to its previous pattern of purchasing more securities, given the fact that such policies are partly responsible for deepening income inequality. It is even more risky for the Fed to adopt a negative interest rates policy (NIRP) as so many other developed nations have, given that the impact on huge money market funds is unknown. “The US is not close to considering NIRP,” concluded JPMorgan economists in a report. “However, if recession risks were realised, the need for substantial additional policy support would likely push the Fed towards NIRP.” However, disconcertingly, the Fed’s latest stress test includes just that scenario,according to Mr Wood. Meanwhile, JPMorgan last week predicted that the Bank of Japan and the European Central Bank are likely to ease more. It is an odd world where the failure of unconventional monetary policies leads to more, rather than less, of the same. There will be worse to come. 来自:VOA英语网 文章地址: http://www.tingvoa.com/html/20170429/Worst-is-yet-to-come-as-the-drawbacks-of-QE-begin-to-loom-la.html