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December 13, 2010

CNBC: Gary Flam Quoted in “For Now, Big Jump in Yields Being Seen as Good Thing”

“For Now, Big Jump in Yields Being Seen as Good Thing,” by Jeff Cox, CNBC.

“The end goal of QE2 and what the Fed is trying to achieve is increase confidence in the economic situation,” says Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles. “That gets people to spend money, whether it’s capex (capital expenditures) or by consumers on the holidays. Their goal is not to drive down rates, but to use lower rates to achieve the end goal, which is to increase confidence in the economy.”

… “There’s still significant headwinds facing the economy: 2010 stimulus rolls off and is less helpful, concerns about Build America Bonds not being renewed, and you still have states in fiscal deficits,” Flam said. “Runaway economic growth and inflation that follows, at this point, is far from our minds.”

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