Insightful and sage views from Stanley Druckenmiller. (Who co-founded the Quantum Fund with a one George Soros) "it is my belief that QE has subsidized all asset prices and when you remove that, the market will go down," On New Fed Chairman “It totally matters. When you think back of what Paul Volcker, Alan Greenspan and Ben Bernanke have meant to markets, it is pretty naïve to say the next Fed chairman won’t matter. It may not know why it matters and I may not know why, but it is a really, really important appointment.” On Recessions and Bear Markets. “Ok, so my guess is, and I believe the market is topping. The stock market predicted seven out of the last three recessions; I predicted seven out of the last three bear markets. I started in a bear market, so I have a bearish bias. Where I am on the market is if you gave me a stock I really like, I will buy it. If you give me a stock I really hate, I’ll short it. In terms of having some big position, long or show index, or some exposure to the stock marketright now, I am lost. I don’t play when I am lost. I know in the future I won’t be lost." “As long as the fed is printing money, not very close. That is why the issue of tapering and where we go with it, is so important. I don’t really care whether we got to 70 or 65 in September. But if you tell me QE is going to be removed over nine or twelve month, that is a big deal. It is my belief that QE has subsidized all asset prices and when you remove that, the market will go down.” On how he looks back on the last five years since the financial crisis: “So I find the situation somewhat bizarre. It is a little bit colored by how I thought we got into this. I actually did well in the financial crisis because I believe this was the reason we got into it. I’m not saying it was the major reason, but a necessary condition have a financial crisis, in my opinion, is too loose monetary policy that encourages people to take undue risk and go on the risk curve and do silly things. We should have shut this down in 1998, 1999. The NASDAQ bubble, we should have raised rates, we didn’t.”
Posted on: Thu, 12 Sep 2013 04:20:12 +0000
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