Don't count on QEIII says Roger J Kerr. But if it occurs, there will be unintended consequences he says. Your view?

"in favour of skyrocketing equities."

The S&P 500 is currently below what it was in the year 2000.  So if QE 1 & 2 failed to get it higher then, even if there is a QE 3, it will  most probably ony cause a temporary uptick, followed by the next leg down in the market.  

Picking the bottom in the US bond yields (hence our long-term swap rates) has not been easy to date, however the probabilities are stacking up that we may have seen the ultimate lows at 1.40% last week.

I bet it hasn't. You seem not to be overburdened with nimble trading talent.

And yet you doggedly ignore the possibilty of US T10 pricing negative yields similar to some issues in Germany and Switzerland already priced there. 

As I noted there can be expensive errors and you would be wise to refrain from such adamant advice unless you simultaneously offer comprehensive principal protection hedging strategies.

Negotiating professionally dominated fixed income markets is hard at any time - but when quick draw loss limiting juniors are in charge while their bosses swan around the Med for the month of August,  I would defer all new investment activity in bonds until calmer, wiser heads arrive back in early September.

"What if that very negative view on the global economy is wrong?".....hmmmmm....what if it is not....what if the very negative view is an understatement of the serious trouble to come....!

Roger has this to say..."As European risks subside from the extremes of recent months, those flows into US bonds will reduce"....is Roger in his very own Fairyland...the situation in Europe is set to explode and the potential for the US bond market is one of utter disaster when rates rise as they will.

How many hundreds of billions are set to be wiped off the value of those bonds.....!

Nothing worse than needing to believe.

Not that Roger is alone in that.

Bond rates have to trend negative, to match post-peak levels of real activity. Someone should have studied physics.

Wolly - I strongly suspect you're wrong about Europe...maybe in the longer-term, but not the next 12 months plus some. Its pretty clear that the ECB has a grand plan finally....once/if the German courts validate that the ESM is within the German constitution on 12th Sept, get the problem children to formally request a bail-out (they will or otherwise their bond yields will become Greek like) then get the ESM (possible with huge added firepower if they can get the Germans to agree to giving it a banking licence) to buy tons of Spanish and Italian bonds, and the ECB buys unlimited amounts on massive, and possibly unsterlied QE basis. I reckon, 70% plus chance of that before Christmas, probably Sept/Oct.

Bond yields in those countries will collapse, and the yields in those countries such as NZ/Aust & the US (although the Fed will fight to hold them down) will rise substantially - 50 -100 basis points by Christmas here.

How long that impact will  last will depend upon the long-term budget reduction measures that come with the bail-out condiitons, how well balanced they are that doesn't completely kill growth, and how well they're enacted, The long-term I have far less faith in.

Wolly, don't mistake me as someone who thinks that bonds are a good investment, they are a massive bubble waiting to burst. All I am saying is that, is the case of the PIIGS, they're about to get a temporary reprieve, but as I said, longer-term you don't want to own them, and even moreso, US bonds