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'Likely to be excruciating': A notorious stock bear says investor reliance on Fed money-printing is misguided a?? and warns of more than 50% crash from current levels

'Likely to be excruciating': A notorious stock bear says investor reliance on Fed money-printing is misguided a?? and warns of more than 50% crash from current levels
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John Hussman — the outspoken investor and former professor who's long forecasted a stock collapse — thinks investors are making a tremendous error by putting blind faith in the Federal Reserve's ability to backstop markets.




He notes that the outcome of the Fed's actions are heavily reliant on investor psychology and sentiment. According to his proprietary measure, those remain negative.




Hussman is joined in his skepticism over the Fed's ability to prop up stocks in the long term by legendary investor Stanley Druckenmiller.




Hussman calls for a two-thirds market crash from the highs carved out in February, which implies about a 50% drawdown from today's levels.




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It's safe to say that the Federal Reserve has thrown just about everything but the kitchen sink at the market in order to combat the fallout from the coronavirus.
Here's what the Fed has been up to since mid-March:



Cut interest rates to zero




Announced unlimited quantitative easing




Started purchasing corporate bonds




Announced an initiative to buy state and local bonds



All of that stimulus has resulted in a voracious expansion of the Fed's balance sheet.
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