Guggenheim Says Central Bank-Driven ‘Ponzi Scheme’ Must Collapse

By Bloomberg. Scott Minerd has a message for his fellows at Davos who are applauding rallying markets: Things aren’t as good as they seem.

The Guggenheim Partners investment chief likened the inflation of asset prices caused by the loose money policies of central banks to a “ponzi scheme” that eventually must collapse.

“We will reach a tipping point when investors will awake to the rising tide of defaults and downgrades,” he wrote in a letter from the World Economic Forum meeting. “The timing is hard to predict, but this reminds me a lot of the lead-up to the 2001 and 2002 recession.” (Read more from “Guggenheim Says Central Bank-Driven ‘Ponzi Scheme’ Must Collapse” HERE)

____________________________________________

Guggenheim’s Scott Minerd Declares Trump Winner Over Fed on Rates, Sees Market Rally Continuing

By CNBC. President Donald Trump’s early criticism of the Federal Reserve’s four 2018 interest rate hikes have proven right over time and the stock market loves it, Guggenheim Partners’ Scott Minerd told CNBC on Tuesday.

“I think he was [correct] in hindsight,” the money management firm’s global chief investment officer said in a “Squawk Box” interview from the World Economic Forum in Davos, Switzerland. “I think he was more concerned about slowing the economy in his administration.”

However, Trump’s calls for lower rates proved prescient, Minerd argued, as the stock market plunged during the fall of 2018 and reached a nadir on Christmas Eve 2018.

The Fed pivot early last year to take its foot off the gas and then cut rates three times fueled a nearly 29% rise in the S&P 500 in 2019, the best annual performance since 2013. Stock have also gotten off to a roaring start this year.

The rally should continue in throughout 2020, said Minerd, also a member of the New York Fed’s Investor Advisory Committee on Financial Markets. “Bull markets go as long as they go. As long as the central banks keep the liquidity spigots open, I don’t see any reason why we can’t just keep pushing asset prices higher.” (Read more from “Guggenheim’s Scott Minerd Declares Trump Winner Over Fed on Rates, Sees Market Rally Continuing” HERE)

Follow Joe Miller on Twitter HERE and Facebook HERE