Banking and Finance
Credit Bubble 2018 ???

Paul Tudor Jones Warn Of Storm Clouds On The Horizon Largest “Credit Bubble Ever” – Full Speech At The Greenwich Economic Forum

Burgess COMMENTARY

Peter Burgess

Paul Tudor Jones Warn Of Storm Clouds On The Horizon Largest “Credit Bubble Ever” – Full Speech At The Greenwich Economic Forum November 17, 2018 6:22 pm Paul Tudor Jones panel at the Greenwich Economic Forum conference on November 15th 2018 Stay tuned for Dalio, Balyasny, and Bescholss Also we are going to fix up these notes even better in next day or so, so stay tuned for that Also see more Q3 and Q4 hedge fund letter and conference coverage here I think is the probably the single, most threatening social problem that we faced clearly in the United States, unfortunately leads the rest of the world, rest of the developed world in terms of that. And you can kind of see the fissures that come from that [0:00:18], I think we saw in the last election, and so but I remember very clearly. So just briefly, Social Capital is a foundation, it’s trying to change corporate behavior from one company to corporate practices with a plan for the American public. And we do that by polling every year, I think over the past five years, we’ve also been close to 80,000 Americans, polling every year and asking the American public what they think corporate just behavior is. And then we take that and then we rank the 1,000 largest public companies in the United States based on that concept of justice from 1 to 1,000, from the best to least. And the interesting thing is that just behaviors defined by the American public, there was actually a great story here because just behavior also is a way to increase profitability. So, you take 1,000 companies, and we do it by sectors, and you take the top half of each of those sectors, on average those companies earn 7% reward on return on equity, they pay something like 75% fewer funds, they emit 9% less greenhouse gases. They on average hire 20% more per year. There’s so many wonderful things about justice. And so, this past May we actually launched an ETF based on that model, that take the top 500 companies out of 1,000, rank on justice and with Goldman Sachs they launched an ETF inaudible. And there’s a really good story there too. Just one thing I forgot, if you’re going to have something change in this country, and we always think of philanthropy public service, what the public government does, we’re missing the point. It actually has to start with our companies. And we’ve got to change our mindset because our philanthropy is 400 billion. So, the private sector’s almost 50 times the size of it. If you’re going to have true social change it has to come with a different mindset than we have today on the way companies are managed and who they’re managed for. How many people in here consider themselves capitalists and believe in the capitalist system, raise their hand. Well, virtually everybody in this room. So, if you ask that same question to millennials, what do you think the answer is? It’s less than 50%, 40 … no, 34% say they consider themselves capitalists. And there’s about 50 who don’t know, 51 actually, they are opposed to it. So, we have to modernize the capitalism, we have to change the way that we do it.

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https://www.bloomberg.com/news/articles/2018-11-15/paul-tudor-jones-says-trump-tax-cut-may-cause-debt-bubble-to-pop Tudor Jones Says Trump Tax Cut May Cause Debt Bubble to Pop By Katia Porzecanski and Katherine Burton November 15, 2018, 11:37 AM EST Updated on November 16, 2018, 10:09 AM EST Jones says stocks, bonds, credit, real estate all overvalued ... If the Fed pauses in rate increases, stocks could rise Paul Tudor Jones Photographer: Michael Nagle/Bloomberg The hike in interest rates triggered by faster growth from U.S. tax cuts may cause the bubble in credit to pop, billionaire hedge fund manager Paul Tudor Jones said. “We’re going to stress test our whole corporate credit market for the first time,” Jones said Thursday at the Greenwich Economic Forum in Greenwich, Connecticut. “From a markets perspective, it’s going to be interesting. There probably will be some really scary moments in corporate credit.” Jones, who heads the $7 billion Tudor Investment Corp., said zero and negative interest rates have encouraged excess lending, putting the markets in a perilous condition. He said today’s levels of leverage could be systemically threatening even if policy makers respond appropriately. Concerns about earnings peaking, trade wars, oil prices and rising rates have been knocking credit markets, with global high yield bonds suffering their worst October since 2008 and continuing to sell off this month. Investment grade U.S. corporate debt is posting its worst year-to-date performance in a decade, falling about 4 percent through Nov. 15, according to the Bloomberg Barclays index. “The end of the 10-year run is going to be a really challenging time for policy makers going forward,” he said. Stocks, bonds, currencies and real estate are all overvalued, he said. Tudor’s main fund rose 9 percent this year through October, according to an investor document. The hedge fund manager said the next trade will be a “front-end rates trade” of figuring out when policy makers will cease interest rate hikes. Even though growth may slow through next year, stocks may not take an immediate hit. In other periods when the Federal Reserve paused in its rate increases, stocks reached previous or new highs. While the central bank is widely expected to raise rates for the fourth time this year in December, Federal Reserve Chairman Jerome Powell earlier this week laid out a scenario for a pause sometime next year by highlighting potential headwinds to the U.S. economy. The median forecast of policy makers in September was for three increases of a quarter percentage point each in 2019. 'It doesn’t necessarily mean we have to enter a bear market yet,' he said. 'But who the hell knows.' Jones, whose hedge fund has for years struggled to generate profits and keep investors, said earlier this year that he doesn’t have many macro trades on because the reward and risk have diminished at this point in time. (Updates with losses in credit markets in fourth paragraph.) Have a confidential tip for our reporters? GET IN TOUCH Before it's here, it's on the