It’s always good to pay attention to what Stanley Druckenmiller has to say. He is one of the top macro fund managers of all time, and now basically manages his own money, which is different than managing other people’s money. Here we have a full hour interview, for the Ira Sohn conference. The interviewer is John Collison, the billionaire co-founder of Stripe. Among his other accomplishments, he is also a good interviewer.
Click here for an interview with Stanley Druckenmiller at YouTube
An MBS expert describes how the gigantic MBS market went no-bid after Friday’s CPI report.
During the last forty-four years, my days have begun and ended with the mortgage market. Four painful moments stand out. Today makes five.
Louis Barnes on the mortgage market
Jeremy Grantham, in the past the only big institutional investor to avoid big bear markets, has been in his element recently. This is from a May 19 interview of both Ray Dalio and Grantham, from Jim Haskell of Bridgewater (Ray Dalio’s shop).
This is the real McCoy. It seems to be playing out pretty close to 2000. The four great bubbles, are characterized by nearly hysterical behavior – accelerated price moves on the upside, and by a weird deviation, on the upside, between the blue chips going up and the risky stocks going down, and that is rare as hen’s teeth – it happened in 1929 and it happened during the year 2000 again, in spades, with the S&P ex-growth continuing to go up until September of 2000, and the growth stocks basically going down 50%, and the internet stocks dropping maybe 60-70% by then. So that was spectacular, and we saw a very handsome deviation between the S&P rising last year and the Russell dropping quite handsomely. I’ll tell you what it describes. It describes Mr. Prince’s ‘I’ve got to keep dancing, because the music is still playing.’ And we understand that completely, the enormous commercial imperative of the industry to play up to, and over the edge… That’s the phenomenon that causes this very rare indicator of impending doom. Impending doom – in other words now. We’re in it. I believe the declines will be very substantial.
What an incredible lineup of some of the finest minds around.
The “bear market rally” idea seems to have become so popular that there’s nobody left on the buy side of the trade. That wasn’t much of a rally. I think the next time down could be especially severe, as it may be accompanied by a major markdown of profit expectations across the board. So far, analysts still expect 2023 to have the highest profit margins in history.