Not expecting QE-3 from Federal Reserve next week: Dodge O Dorland, Landor & Fuest Capital Managers

In a chat with ET Now, Dodge O Dorland, Chairman & Chief Investment Officer at Landor & Fuest Capital Managers, gives his views on global markets. Excerpts:

ET Now: Would you agree with my assessment that currently global markets are completely hostage to regulatory action?

Dodge O Dorland: Absolutely, hostage is the keyword here. What we are seeing in our markets is always a reaction to the happenings on the political side. They have very little to do with the economics of the companies & corporations.

ET Now: Last week, the US Federal Reserve had indicated that US economic growth is anaemic, but it will be too early for them to consider a QE-3 ( quantitative easing). Next week, when the FOMC meeting is due, do you think there will be immense pressure on Mr. Bernanke for a QE-3?

Dodge O Dorland: There will be an expectation of a QE-3 as we get closer to the meeting. Perhaps our markets may have a bounce in that expectation. But one must bear in mind that the political pressure is of much long term in nature & more significant.

As Bernanke had said, each time we use quantitative easing, the real results are actually less. So I feel that ultimately, there will not be anything next week.

ET Now: Why do markets no longer rally on European bailouts? It seems like this is just a one day affair and markets fizzle out yet again.

Dodge O Dorland: Yes, we are hostage to other events besides quantitative easing. Quantitative easing in fact puts off what should be addressed sooner. We have the Greek election coming up very shortly within a week. So we are really coming to the climax of a lot of political uncertainty.