Larry Fink, the CEO of the world’s largest asset management firm, Black Rock, and Thailand’s Finance Minister, Kittirat, have something in common, both are concern about how the USA Fed is delaying tapering off of bond purchasing that pumps records amount of money into the economy. Both also cited worry about bubbles. Thailand’s Kittirat simply said, quote: “The USA Fed has to start tapering otherwise the global economy will suffer.” Fink said the biggest risk in not tapering was that the longer the program ran, the harder it would be to unravel. “What I’m worried about now is the Fed is going to be buying maybe more than 100 percent, maybe 110, 120 percent of all debt issuance. I think that’s going to create more of a bubble issue in the future and it’s going to make it more difficult to unravel this,” said Fink. Fink points out another potential reason for the Fed to hold off—the risk of another ugly government shutdown fight that could cause the consumer to “pull back.” “They’re suggesting that, you know, we’re in a decent economic period, but boy, we need to ratchet down where we’ve had an aggressive growth paradigm in the out years, so I think they’re reflecting that,” said Rick Rieder, managing director and chief investment officer of fundamental fixed income at BlackRock, which has $3.86 trillion in assets. “The stock market is going up because globally the economy is doing better than people think it is, and that’s the surprise. The power of capitalism despite terrible policies,” Fisher said.
- Blackrock Chairman pleas for the Fed to taper (forexlive.com)
- BlackRock’s Fink on ‘bubble-like markets’: Fed needs to taper (blogs.marketwatch.com)
- ZeroHedge: Head Of World’s Largest Asset Manager Says “Imperative” For Taper To End “Bubble-Like Markets” (silveristhenew.com)
- BlackRock’s Fink Says There Are ‘Bubble-Like Markets Again’ (bloomberg.com)
- Foreigners buying long futures on Thai stock, but with fresh rumors, time for short cover? (thaishortnews.wordpress.com)