Photo: Bloomberg Television
Barton Biggs is a bit spooked these days.The former Morgan Stanley chief global strategist told Bloomberg’s Betty Liu earlier today that the combination of another crisis brewing in Europe and the Fed’s apparent retreat from further easing have convinced him that the market is heading for a short-term pullback in the range of 5% to 7%.
“I’d like to have a little less ‘risk-on’ than before,” he said.
He later added, “I’m going to sell the S&P short to hedge the positions I already have. I don’t want to net disturb them but I may want too take a little risk off.”
Now with Traxis Partners, Biggs had previously stated he was approximately 90% long the S&P, according to Liu.
He slammed the Fed governors who he said had evidently convinced Ben Bernanke to take his foot off the easing pedal. Such a move actually goes against most investors’ wishes, he said.
The threat of a double-dip remains, Biggs suggested.
“The markets want to see more liquidity,” he said. “The markets are still worried. The markets read Reinhart and Rogoff, [who] suggest that after every financial crisis there’s a long period of much slower growth and in almost every case you get a double dip.
“Without QE3, the market will struggle.”
But Biggs remains long-term bullish, saying he’d gradually begin shorting U.S. treasuries.
Here’s the whole interview from Bloomberg.