Summit Blog

19Jun2017

U.S. Markets at Highest Risk Since the Recession

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June 2017

By Selina Stoller, Summit AmeriFirst Holdings, LLC

Bill Gross, fund Manager at Janus Henderson Group Plc, says that the level of risk he sees in the current United States market is at its highest since The Great Recession of 2008.

At the Bloomberg Invest New York summit last week, he said that central bank policies for low and negative interest rates were artificially driving up asset prices.

“Instead of buying low and selling high, you’re buying high and crossing your fingers,” Gross said.

He blamed central banks’ loose monetary policies for inflating asset prices without proof of tangible economic growth.

“Money is being pumped out into the system and money that is yielding less than nothing seeks a haven not only in bonds that are under-yielding but in stocks that are overpriced,” he said in an interview with Bloomberg TV.

Since the US presidential election, stocks have risen due to optimism over President Trump’s pro-business and pro-growth policies. But according to financial journalist, Nafeez Ahmed, Americans should brace for the oil, food, and financial crash of 2018.

He believes that because 80 percent of the world’s oil has peaked, we could see a permanent economic recession driven by ongoing dependence on expensive oil unless we choose a fundamentally different path.

Gross says that, in the financial market, investors shouldn’t accept the world as it is.

“…you tell your investors…that returns are going to be lower and that if you want to sleep at night, to accept the market as it is. Low volatility requires low returns,” he said.

Janus Capital Group and Henderson Group completed a merger May 30 to form Janus Henderson Group Plc, which created a global investment manager overseeing more than $330 billion. Gross said the merger will help his fund since Henderson will add to asset growth.

 

 

  • 19 Jun, 2017
  • Summit Alternative Investments

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