Deja Vu Financial Crisis Pre-2008??? Over-Leveraged > Risk- Aversion, Caution

Two views to share from two Money-Men

Bill Gross Says Market Risk Is Highest Since Pre-2008 Crisis

by John Gittelsohn @johngittMore stories by John Gittelsohn

and Erik Schatzker @ErikSchatzkerMore stories by Erik Schatzker

‎June‎ ‎7‎, ‎2017‎ ‎7‎:‎10‎ ‎AM ‎June‎ ‎7‎, ‎2017‎ ‎9‎:‎14‎ ‎AM

Includes an upload of an interview

Source: Bloomberg News

 

U.S. markets are at their highest risk levels since before the 2008 financial crisis because investors are paying a high price for the chances they’re taking, according to Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund.

“Instead of buying low and selling high, you’re buying high and crossing your fingers,” Gross, 73, said Wednesday at the Bloomberg Invest New York summit.

Central bank policies for low-and negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks and insurance companies, according to Gross.

Janus Capital Group and Henderson Group completed a merger May 30 to form Janus Henderson Group Plc, creating a global investment manager overseeing more than $330 billion. It seeks to use its combined size to compete with lower-fee rivals, such as Vanguard Group, at a time when costs are rising for compliance and technology.

 

Elliott's Singer Warns

System May Be More Leveraged Than 2008

by Beth Jinks and Simone Foxman        

‎June‎ ‎7‎, ‎2017‎ ‎2‎:‎42‎ ‎PM 

Includes an upload of an interview

Source: Bloomberg News

Billionaire investor Paul Singer said “distorted” monetary and regulatory policies have increased risks for investors almost a decade after the financial crisis.
“I am very concerned about where we are,” Singer said Wednesday at the Bloomberg Invest New York summit. “What we have today is a global financial system that’s just about as leveraged -- and in many cases more leveraged -- than before 2008, and I don’t think the financial system is more sound.”
Years of low rates have eroded the effectiveness of central banks to contend with downturns, Singer said at the event in an interview with Carlyle Group co-founder David Rubenstein. “Suppressive” fiscal, regulatory and tax policies have also exacerbated income inequality and led to the rise of populist and fringe political movements, he added.

Confidence “could be lost in a very abrupt fashion causing conceivably a ruckus in bond markets, stock markets and in financial institutions,” said Singer, founder of hedge fund Elliott Management Corp., which is known for being an activist investor.

. . . The New York-based hedge fund, founded by Singer in 1977 and carrying his middle name, invests globally. Elliott invests across strategies including long-short hedge funds, distressed credit, arbitrage, real estate, shareholder activism and private equity.

Singer’s fund, which manages about $34 billion, is probably best known for a battle with Argentina’s government over that nation’s 2001 bond default. Elliott is pushing for changes at South Korean conglomerate Samsung Electronics Co. and at the world’s biggest mining company BHP Billiton Ltd., among other campaigns.