In a recent interview, Kyle Bass, the well-known founder of Hayman Capital, revealed that “There’s no real way out” of the current economic situation that has resulted from the fiscal profligacy of the central banks. And later in that same interview, when asked his opinion of what the ‘average investor’ should be doing in this environment, Mr. Bass could only make the suggestion that they “should be very careful doing what the central bankers want them do.” With low yielding interest rates, the central banks are pushing average investors into taking on more risk with higher yielding equities.
But it’s even worse than that. Fundamentals don’t seem to matter much in these uncharted economic waters. Why? Because as Barry Ritholtz has so thoroughly outlined in his Big Picture analysis of the markets – they’re all rigged! The average investor is at the mercy of the big banks and crony capitalism.
Yes, be very careful indeed!