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David Rubenstein, co-founder of the Carlyle Group told Bloomberg TV that interest rates can’t be kept artificially low “forever” and the person who can spot when this will change will make a lot of money.
“As Herb Stein, a former chair of the Council of Economic Advisors once said, if something can’t keep going on forever it won’t. And low interest rates will not keep going on forever. At some point, they will rise and people have to anticipate that will happen. The greatest fortune to be made in the United States in the next two or three years is going to be made by somebody who determines when the interest rate rise will occur. If somebody will do what John Paulson did in effect in subprime debt, have is the perfect derivatives and take advantage of that. Market rates will go up at some point. As long as they are low I think it’s an attractive opportunity to use those low interest rates to fuel growth and to make acquisitions, buyouts or other kinds of corporate M&A.”
Sell Your Euros (Morgan Stanley)
Morgan Stanley is telling its clients to sell their euros. In a new note titled ‘Closing EUR longs’ Ian Stannard, head of Morgan Stanley’s European FX Strategy asks clients to “use any EURUSD rebounds over the coming days into the 1.3150 area to close this long position, and await clarification/stabilisation of the political picture in Italy before re-entering bullish EUR strategies”.
Gold’s Performance Under The Last Four Fed Chairmen (Bespoke Investment Group)
Photo: Bespoke Investment Group
Gary Shilling says he has a “quartet” on which he gives investment advice and they go back and forth depending on whether we’re in a risk-on or risk-off mode.
In a risk-on environment he says investors are bullish on stocks and bearish on Treasuries. In fact he says investors gravitate towards junk securities not Treasuries, and commodities and “they don’t care much about the dollar.”
“Now if you get to the risk-off, which I think would happen after a shock, and the grand disconnect gets reconnected, then it would be the opposite: long treasuries, short stocks, short commodities and long the dollars as a safe.”
Advisors Leave Wells Fargo And Morgan Stanley For Baird (The Wall Street Journal)
5 advisors have joined Baird Private Wealth Management from Morgan Stanley and Wells Fargo. Father and son duo Joseph and John Lipe, known as “the Lipe Group”, according to The Wall Street Journal will join from Morgan Stanley’s wealth management unit.
Kevin Phillips is joining from Wells Fargo, and Robert Glenn and Chad Schuman have already joined Baird from Wells Fargo.
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