When it comes to research, I favor managers with skin in the game. Paul Singer is one of those managers. His firm, Elliott Management, manages $28 billion in assets, making it one of the world’s largest hedge funds. Years ago, in my hedge fund days, we had an investment in his fund. He is smart, experienced and seasoned.
Singer warns that the bond market is “broken” and that when the central bank actions of recent years no longer ward off a market downturn, the subsequent loss of confidence could be severe. Singer states, “Trading in this market is particularly difficult…. Everyone is in the dark.” He continues, “Experience doesn’t count for much, and extreme confidence may be fatal.”
My mantra has been to own equities but with some downside hedge in place. Almost one-half of the Western world’s outstanding sovereign debt—$12.6 trillion worth—traded at negative yields last week, according to the Financial Times. With economics, “no government can play god.” We’ll find out soon enough.
For charts, analysis, and commentary see the rest of the story in On My Radar: “In the Realm of Economics, No Government Can Play God.| By Steve Blumenthal |
The current opinions and forecasts expressed herein are solely those of Steve Blumenthal and are subject to change. They do not represent the opinions of CMG. CMGs trading strategies are quantitative and may hold a position that at any given time does not reflect Steve’s forecasts. Steve’s opinions and forecasts may not actually come to pass. Information on this site should not be used as a recommendation to buy or sell any investment product or strategy.