Another one of the Hedge Fund high rollers, Marc Lasry of Avenue Capital, recently confessed on bubblevision that 2200 on the S&P 500 doesn’t make sense to him, either.
But his reasoning went right to the crux of the bubble implosion lurking just ahead. According to Lasry, the market may be discounting a ‘stronger-than-expected’ economic rebound and thus only appears to be ahead of itself:
The U. S. stock market, making a string of recent record highs, ‘doesn’t make much sense,’ distressed debt specialist Marc Lasry told CNBC Monday, sharing the view of fellow billionaire investment titan Larry Fink.
‘Everyone is a bit surprised,’ said Lasry, co-founder of Avenue Capital, which has $11.3 billion of assets under management. ‘But the market is telling us what’s going to happen next year [or] the next two years.’
While questioning the advance in stocks, Lasry said on ‘Squawk Box’ the market may be signaling a stronger-than-expected U. S. economy, with a growth rate somewhere in the 2 to 3 percent range….’
Ah, the hoary myth of a market that processes information, discovers price and discounts the future. Apparently, no one told Lasry what the bereavers for free markets and honest money had long ago confessed. To wit, ‘Mr. Market, we hardly knew ya’.
So the singular change in relevant information from the post-Brexit low has nothing to do with the outlook for economic growth or corporate profits; it’s just another excited rave in the casino after the latest batch of monetary cocaine – -helicopter money – -was passed all around.
This post was published at David Stockmans Contra Corner by David Stockman ‘ July 19, 2016.
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