Anyone wondering why market volatility has risen lately could have found some answers atDelivering Alpha, the investment conference organized by Institutional Investor and CNBC last week. Some of the biggest names in finance are deeply divided about the fundamental factors driving asset prices.
Paul Singer, the renowned credit investor and founder and president of Elliott Management Corp., told the crowd that the bond market was broken and at risk of a major blowup. Central bankers “have created a tremendous increase in hidden risk” with their bond-buying policies and near-zero, or even negative, interest rates, he argued. Those policies have inflated stock and bond prices to dangerously high levels and run the risk that inflation, now seemingly contained, will soar out of control. Recent market setbacks triggered by speculation of a possible 25-basis-point rate hike by the Federal Reserve was just a “pre-ruckus” of the turmoil ahead, he said, adding, “I think it’s a very dangerous time in the global economy and global financial markets.”
Shortly before Singer sketched out his apocalyptic vision,Ray Dalio, the founder and chairman of hedge fund colossus Bridgewater Associates, offered a much more subdued outlook. Advanced economies are sluggish because of the debt overhang of the financial crisis, with the U.S. capable of sustaining a growth rate of only 1.5 to 2 percent. Far from acting preemptively to ward off hyperinflation, the Fed shouldn’t consider anything but the most modest and gradual of rate hikes, he said; “At this stage the risks are so asymmetric.”
The U.S. economic recovery is in its eighth year, nearly 15 million jobs have been created since the depths of the Great Recession, the Fed’s preferred inflation measure remains below its target, and stock and bond prices are near historic highs after years-long rallies, yet hardly anyone feels good about the state of markets today. The key question is whether today’s sluggish growth, low rates and high asset valuations are largely a consequence of the global financial crisis — Dalio’s stance, which dovetails with the views of most policymakers — or whether excessive central bank activism is largely to blame, as Singer contends.
有什么值得注意的the recent rise in volatility is that it follows signs of doubt among central bankers themselves. One of the main themes at the Kansas City Federal Reserve Bank’s economic symposium at Jackson Hole last month is that it’stime for fiscal policy to take some of the strain off of monetary policy该发达经济体几乎完全依赖于Postcrisis世界。在本月早些时候的欧洲央行政策会议上，马里奥·德拉基总统没有任何承诺明年扩大欧洲央行的定量宽松，或进一步降价，促进银行开始怀疑其政策的疗效。与日本央行的类似担忧正在增长，州长Haruhiko Kuroda使用比其他任何人更积极地使用债券购买和负率，而不是恒星结果。
The国际定居点银行（BIS）是世界中央银行商的中央银行，引用了最近季度报告的最近市场运动中的“不和谐感”。下降债券收益率通常与柔和增长有关，它指出，即使企业盈利能力滞后，世界各地的股市也会上涨。在美国，日本，德国和U.K的十年政府债券上的名义收益率最近跑得远低于国内生产总值的名义增长率，突破了一个65-year pattern in which the two have tracked each other closely.
The suggestion is that quantitative easing and zero-to-negative rates have created a positive feedback loop, pushing more investors into longer-dated bonds as part of a global momentum trade. The risk, of course, is that the feedback loop turns negative.
“There has been a distinctly mixed feel to the recent rally — more stick than carrot, more push than pull, more frustration than joy,” says Claudio Borio, chief economist of the Basel-based BIS. “This explains the nagging question of whether market prices fully reflect the risks ahead. Doubts about valuations seem to have taken hold in recent days.” Dubravko Lakos-Bujas, head of U.S. equity and quantitative strategy at J.P. Morgan Securities, said last week that a rise in volatility in U.S. stocks after two months of unusual calm signaled the growing risk of a “deleveraging event” in which investors unload stocks.
It all adds up to a distinctly edgy market environment as the Federal Open Market Committee (FOMC) prepares to hold its policy meeting on Tuesday and Wednesday.
美联储本身似乎更加撕裂，即它已经多年了。副主席斯坦利·菲舍尔促进了上个月的猜测，通过表示美联储正在接近其对通货膨胀和失业的目标，而州长之王似乎似乎通过强调全球环境疲软的谈话加息。
The Fed almost certainly will not make a move this week because expectations aren’t ready, says Vincent Reinhart, chief economist at Standish Mellon Asset Management Co. and a former FOMC economist. The central bank “is willing to disappoint markets, but it’s not willing to surprise markets,” he says. He expects the Fed to make a 25-basis-point hike in December.
像Dalio一样Reinhart是低期望营地的成员。如果经济只能以1.5〜2％的增长，“返回将被压制，”，投资者将继续延伸以获得收益率。在那种环境中，他补充道，“你很容易受到各种各样的冲击。”
For investors, the summer doldrums are definitely over.
Follow Tom Buerkle on Twitter at@tombuerkle.