To Some, it “Feels More Like a Crash”
by Wolf Richter
WolfStreet.com
October 20, 2016
These US Markets Have Cracked, and the Cracks are Spreading
“There’s enormous risk in public markets because that’s the one that central banks have distorted to the greatest extent,” El-Erian, chief economic adviser at Allianz SE, told Bloomberg TV, in reference to stock and bond markets. He confessed to the heresy of holding 30% of his portfolio in cash.
“It’s very hard to say I’m going to buy a basket of public equities and go to sleep for the next five to 10 years and feel good about the returns. Similarly with bonds,” he said.
These “public markets” are not the only markets that central banks have totally distorted and larded with “enormous risks.” Practically everything that is an asset has been inflated, including residential and commercial real estate in much of the country, and assets that are the objects of admiration of the wealthy: collector cars and art.
But these markets have started to crack at the edges, and some of the cracks are spreading.
The Rest…HERE
