Paul Tudor Jones: “The Next Recession Will Be Frightening”by Tyler Durden
ZeroHedge.com
Mon, 06/18/2018
With outgoing Goldman CEO Lloyd Blankfein clearly in a whimsical mood these days and happy to moonlight as a talk show host, in today’s “Talks at Goldman Sachs”, the hirsute CEO of the world’s biggest incubator of central bankers interviewed hedge fund investing legend Paul Tudor Jones.
After a brief conversation about the early days of Jones’ career, the conversation turned toward distortions in modern capital markets – of which there are plenty as Blankfein’s own top trader warned over the weekend – which Jones said will likely trigger the next recession and attendant market crash, a far more pessimistic assessment than his CNBC interview last week when he told Andrew Ross Sorkin to expect a melt-up spike in stocks before the end of the year.
As Jones unveiled his view of how derivatives markets are masking the true extent of the debt in present the financial system, his commentary sounded surprisingly similar to famous permabear Albert Edwards, as he leveled the blame squarely at central bankers for creating “dubious”, “unsustainable” asset prices.
Early in the discussion, both men joked about how they were turned down for jobs at Goldman early in their careers: “what is it with these Goldman guys? They’re so stuck up,” Blankfein joked, prompting a smattering of laughs in the audience.
Then Blankfein couldn’t help but ask: “Do you see a lot of excesses in the current market?” to which Jones answered in the affirmative, saying that compared with history, real interest rates are so unbelievably low, that clearly the current monetary policy regime is “just crazy.” In a way, history is repeating itself, as Jones compared the Fed’s interventionist policies to a period of “manipulation” in the 1950s and 1960s that made investors accustomed to low real rates…before the dawn of stagflation hammered markets and the US economy.
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Paul Tudor Jones: “The Next Recession Will Be Frightening”
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