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Biggest Nordic Buyout Fund Sees "Asset Bubbles Wherever We Look"
"We’re more leveraged today than in 2006-2007," warns Thomas von Koch - managing partner at EQT, the largest buyout fund in the Nordic region, adding that "there are financial bubbles being built up and how they’ll be solved, I don’t know." As Bloomberg reports, von Koch concludes, an unprecedented era of monetary stimulus is inflating asset prices across markets to extreme levels, with history offering little help in predicting how it will all end - "The problem is global, not just for Europe. It’s the asset bubbles in general that concern me. It’s wherever we look."
The biggest buyout fund in the Nordic region says an unprecedented era of monetary stimulus is inflating asset prices across markets to extreme levels, with history offering little help in predicting how it will all end.
“There are financial bubbles being built up and how they’ll be solved, I don’t know,” Thomas von Koch, managing partner at EQT Partners in Stockholm, said in an interview. “The problem is global, not just for Europe. It’s the asset bubbles in general that concern me. It’s wherever we look.”
“I can virtually toss those textbooks in the fire,” said von Koch. From an investor perspective, the development means stocks that track economic cycles are less appealing, he said.
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Instead, von Koch says excessive leverage fueling a hunt for yield is something “one should be wary about.”
Debt levels are approaching those recorded in 2006 and 2007, just before the global economy lurched into its worst crisis since the Great Depression, according to von Koch.
“You also have a private market chasing yield with a bond spread between those and debt provided by the banks that has never been as narrow as it is today,” von Koch said. “And the underlying economies for the companies, you don’t have much growth. From that perspective, we’re more leveraged today than in 2006-2007.”
As Citi's Matt King recently noted, it appears one by one, investors are losing faith in the 'bubbles'...
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People have been saying this for years now. Not sure why this time it's supposed to mean anything.
Spot on. And here we have another day of bad data, the continuing Greece/Troika farce, Ukraine and the 'markets' just carry on in their 'la-la land' as though everything is fine.
A complete joke.
DavidC
"Will someone stuff a rag in that guy's mouth. Please?" - Mother Yellen
Algos don't see things in terms of "bubbles". They just keep buying right on up.
Mindless computer programing works every time. That is until the algos just keep selling right on down.
good thing the nords dont hold a voting position at the fed(vote? LMFAO). thats pretty much all it comes down to. lies built upon more lies.
Nothing that can't be fixed with a new set of rose-colored lenses.
You are correct it is a morality issue across the globe; the problem is we are ALL guilty...just matter of degrees.
Computers do what they are told to do, no more and no less but the people who wrote the rules will blame glorified pocket calculators for their evil when everything collapses....
Somebody just smelled the "coffee". Yeah we are at a time of unprecedented asset bubbles, the Great Reset is upon us. Keep your powder dry and remember in a asset bubble bursting scenario cash will be king, than gold than Equities than real-estate.
I perform fundamental analysis on stocks that I am looking to invest in. I've done this for 25 years now.
I have complete sectors that have not one stock at today's prices that tell me they are in the Buy range.
And like you said, this has been going on for a long, long time.
But it will only go on for as long as the printed dollars keep flowing into the markets and then have no where else to go.
Until then, it's a waiting game.
Yes, exactly. We and many ZH posters have said this for several YEARS now, so why is it different when this guy says it. You don't need to be a bright spark to know the financial system is more leveraged than in 2006-07. We know that the stock markets are in the greatest artificial bubble in human history. Nations with collapsing economies and national debts and private debts beyond record level have raging stockmarket bubble. The worse the economic news the greater the face ripping move upwards! All based on hopes for more QE, Money Printing and Open buying of Indexes. Everyone is betting the central banks can not fail to move stocks higher.
This really is the ultimate stock market bubble. When world central banks admit openly that their job, or duty, is to push asset prices higher and higher, and promise always to step in with unlimited printed dollars to FORCE stocks higher.
This all is going to work, till the one morning we wake up, switch on the financial news and hear of a cascade of bankruptcy and bank closures. The Laws of Physics are being violated by central bank manipulations, that means a 100% chance of a correction back to equalibrium! In other words, a correction back to real market values. How much are a dozen burger trucks worth in market Cap? 5 billion, or 250,000 dollars? Markets say 5 billion, the Laws of Physics say 250,000 dollars. That is what equalibrium means, a drop to the base level that reality can support.
I doubt we will see any big, sustained decline in asset prices. We may get another 30% sheep shearing again for 1 year, but it's not going to drop 20%/yr for 5 years in a row. The Elite don't want that. And, the stock market is one Fugazi (privately-issued paper) priced in terms of another Fugazi (the "publically"-issued fiat currency). Those in charge can set the price - the ratio of the 2 Fugazis - to almost anything that they wish. Long term, they clearly prefer to shit on the fiat currency, to bid up equities and real estate, while suppressing commodity prices and wages through all possible means.
There is really only 1 way to put a permanent end to the donkey show: commodity producers, laborers, etc - those who produce real products and services - need to stop borrowing, and stop accepting worthless private paper (stock, options, etc) as well as worthless public paper (dollars, euros, etc) in any quantity, and instead demand phyzz PMs or some other new non-fraudulent currency. That is most likely to happen after a highly inflationary boom that pushes the equity and real estate markets far above their current levels.
Any deflationary pressure in the equity and/or real estate markets will just be countered by shitting on the fiat currency some more, and believe me, they can and will shit on it a *lot* more than they have so far, stopping just short of losing control of the system.
High Yield will be ok because those are bonds so you can always hold on till maturity and ride out the volatility.
Bwah Ha Ha Ha Ha Ha!!
or Sweden's.... what's the difference, right?
That will happen when there is no rational allocation of capital. 7 + years of it.
Sure, but good luck with that. The Fed agrees to disagree.
Silver and Gold ain't in no bubbles.
No, thus it is time to accumulate some. The manipulation fix is in, using paper gold markets to force the price down. While whole nations of people seek to buy physical gold, the paper markets trash gold.
I pay zero attention to the price of gold, except what it will cost me to buy some gold in my hand. I am no gold bug, I just feel it is time to own some, and accumulate more if the dollar is high and paper gold manipulated down.
It comes down to this. If you trust the present fiat and financial systems of central banks, then there are plenty of place to invest. If you feel that it is now worse than 2008, then physical gold is a good thing.
If you were Russian or Canadian lately, and instead of fiat or money in a bank or bond or anything, you had a nice stash of physical gold in your possession, how would the devaluations of your fiat have hurt you? Gold was a good bet for those there who held it as fiat valuations crashed.
If you want the root bubble, look at the yard stick that every other asset class is measured by.
they should know, they as much as anyone are helping to blow them
I'm looking the other way, nope, no Bubbles in this direction, just the US economy exploding towards escape velocity.
bubbles, what bubbles? Jellin Yellen
No worries, bubbles will just get far bigger with all the free money just getting started....BTFATH'S and don't even sweat it, the banksters got our back.
lol,
"The biggest buyout fund in the Nordic region says an unprecedented era of monetary stimulus is inflating asset prices across markets to extreme levels, with history offering little help in predicting how it will all end."
You might want to explore the "expanding balloon theory". Rapid expansion is usually followed by uncontrolled rapid contraction.
Great version of I'm Forever Blowing Bubbles.
https://www.youtube.com/watch?v=jUB0LYIlXsY
Bubbles likes it too.
Just lower your discount rate. It works like magic.
Two asset classes are suppressed and both from greed. Got Metals? Got morality?
Buy toilet paper and f-hygiene.
Margin Calls, Motherfuckers . . . . tick tock . . . tick tock.
Long, Suicides.
In the land of diminishing returns he who panics first panics best.
(old zimbabwe proverb)
eh? sounds to me like another hedge fund manager trying to cover his ass for underperforming the S&P again
So what? Nobody seemed to care that their policies would certainly produce this bubble when they started them in overdrive back in 2009. Why should anyone care now? It's over the cliff and to the moon, now!
"It's over the cliff and to the moon, now!" - Does seem to defy gravity; good point.
Just entered a buy order for gold at 200$. According to the chart this is the next one to get hit really hard :)
"I see asset bubbles!"
If thine eye offend thee, pluck it out.
Yessir, got that right.
Yep, that's just what I keep on saying.