from Zero Hedge:
Having previously warned that “the ultimate breakdown from this environment is likely to be surprising, sudden, intense, and large,” Elliott Management’s Paul Singer slammed the “amazing arrogance” of policy-makers who have “created a tremendous increase in hidden risk, risk that investors don’t exactly know.” As CNBC notes, Singer issued cautionary words for the path ahead,“it’s a very dangerous time in the global economy and global financial markets,” adding that gold was “under-represented” in investors’ portfolios.
- *ELLIOTT’S SINGER SAYS IN MIDDLE OF 40-YEAR LEVERAGE EXPERIMENT
- *ELLIOTT’S SINGER SAYS VERY DANGEROUS TIME IN GLOBAL MARKETS
- *ELLIOTT’S SINGER SAYS MID-2009 WAS TIME FOR PIVOT POST-CRASH
- *ELLIOTT’S SINGER SAYS G-7 BONDS ARE NOT ‘SAFE HAVENS’
- *ELLIOTT’S SINGER SAYS SELL LONG-TERM BONDS
Policies are exacerbating inequality, restlessness.
Economies fragile because of debt, low rates.
Sees risk both stocks, bonds can decline simultaneously.
Sees risk in inflation surprising everyone.
Gold underrepresented in portfolios.
As CNBC reports, Singer faulted the Federal Reserve and others for creating unusual dangers that are unique in the “5,000 years-ish” history of finance due to low and negative interest rates.
“What they have done is created a tremendous increase in hidden risk, risk that investors don’t exactly know or have faced about their holdings,” he said at the conference presented by CNBC and Institutional Investor. “I think it’s a very dangerous time in the global economy and global financial markets.”
Singer spoke as the Fed weighs whether to enact just its second rate increase in more than 10 years and its first since December, the hedge funder said policy makers acted with “amazing arrogance” when he and others were warning of the financial crisis that would explode in 2008.
In the current situation, he said, the best central bankers can do is say that things would have been even worse had they not acted after the crisis.
He issued cautionary words for the path ahead.
“With roughly $15 trillion on the major central bank balance sheets, with all of these rates at zero or even crazily below zero, you have a very delicate situation which cannot be solved by a sledgehammer,” Singer added. “You need some finesse.”
Watch the following brief clip at your own risk…
As we noted previously, Singer admits in Elliott’s Q2 letter to investors, what the fund, up 6% YTD, is seeing, is “the most peculiar period we have faced in 39 years.” The details are familiar to those who have read Singer’s previous laments (most recently here) on central planning: too much central bank power, too much monetary debasement, inevitable inflation, and “when it happens it could be swift and impossible to tamp down.”
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