GA Trade Nov-Dec interactive - page 7

Frankfurt and the other inMunich.
“This is a response to the very strong
demand inGermany for this type of
service as well as to customer
questions surrounding security and
proximity,” said Le Guisquet. “I want
tomake sure we are able to respond
to that level of demand.”
Axel Springer Invests
$20Million IntoOnline
Axel Springer announced that it has
invested $20million into the Silicon
Valley-based onlinemagazine OZY.
The publication that covers stories on
news and culture was founded in
2013 by CarlosWatson, a former
MSNBC anchor. OZY’s aim is to
bring readers “news and information
in a completely different way.”
for C&As andPrimark
Challenger Lesara
German online retailer Lesara
announced a $7million Series A lead
by U.S. investorsMangrove Capital
from Luxemburg. U.S.-based
Funderguild, Fabrice Grinda and
previous investors including Partech
Ventures, KupiVP founder Oskar
Hartmann, Marafoni founder Sina
Afra and others joined the round.
Founded in 2013, serial entrepreneur
Roman Kirschwants tomake Lesara
the largest pan-European online bud-
get retailer. The team has grown to
now 60 employees.
E C O N O M I S T ’ S C O R N E R
uantitative Easing (“QE”) in
the U.S. is over. Almost exactly
six years after announcing the first
long-term asset purchases – on
November 25, 2008 – and left with a
USD 4.5 trillion balance sheet, the
Federal Reserve has decided that
now is the time to stop. This is
reason enough to have both a look
back and ahead.What good didQE
do, and howwill the economy and
financial markets copewithout it?
First, the view in the rear view
mirror. There can be no doubt,
inmy view, that the first round
of asset purchases (“QE1”), in
combination with the short-term
liquidity programs, was crucial to
halt panic in financial markets
after the bankruptcy of Lehman
Brothers. In line withmy assess-
ment, various measures of finan-
cial stress declined significantly
right after QE1 was announced.
And not long thereafter, the
current stock market rally began.
The benefit of the subsequent
programs, QE2 (November 2010 –
August 2011), Operation Twist
(September 2011 – December
2012), and QE3 (January 2013
– now), on the other hand, is less
obvious. I think the Fed initiated
themmostly as pre-emptive
measures to insure against poten-
tial downside risk. As these
downside risks – thankfully – have
never materialized, it is hard to
appreciate the role of the latest
asset purchase programs. I person-
ally have been skeptical about the
benefits of QE2 and QE3, but from
a risk-management perspective,
the Fed might have been right to
provide additional stimulus.
Follow the Ticker on Twitter
Dr. Harm Bandholz, CFA
Chief U.S. Economist
UniCredit Research
What about the future? Thanks to the
gradual reduction of the asset purchas-
es (“tapering”), we already got a sense
of howwell financial marketswill fare
without themonthly liquidity injec-
tions. The answer is: not too bad. 10Y
Treasury yields are currently 50 to
75bp lower than theywere five years
ago. And as long as the Fed does not
start to sell the assets that it accumu-
lated over the past five years –which
is not planned for the foreseeable
future –most of the yield impact is
here to stay. To be sure, we expect
yields to go up in the comingmonths,
but that is due to changedmarket
expectations about rate hikes, not due
to the end of QE. And as long as
interest rates, both on the short and
the long end, go up for the right
reason, read: a better economy, stock
markets should also be able toweather
the increases. In that context it is
worth to remind ourselves that over
the past 25 years, the S&P500 reached
its peakwhen the rate hike cyclewas
over, not when it started.
GermanAmerican TradeNov/Dec 2014
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