Steinhardt On The Fed's Failure And The End Of Wall Street As We Know It
The low interest rate 'logic' is not working and "the economy can't gain any zest, can't gain any vigor" is how Michael Steinhardt describes the crushing of 'widows and orphans' that the Fed has embarked upon. In a Bloomberg TV interview, the WisdomTree chairman notes the broad 'pall' over the equity markets (conjuring images of a funereal procession down Trinity Street) pointing out that there is no reason to be wildly bullish here. Citing Wall Street's lack of 'spirit', he questions the entire raison d'etre of efficient capital transfer as becoming secondary as he rather poignantly asks who has benefited from Fed's policies "Certainly the banks. But ordinarily you'd say, well, low interest rates benefit housing. It certainly hasn't benefited housing." Reflecting on his performance as a hedge fund manager he concludes that extraordinary performance is sadly not necessary anymore as the money flowing into hedge funds means people do exceptionally well for themselves despite diminished performance. While finding equities broadly unappealing, and suggesting talk of QE3 should cease, he notes there are pockets he would invest in but ends by noting that "Bonds are no place to be".