Leon Cooperman: "When The Market Finally Goes Down, It Will Move So Fast Your Head Will Spin"

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by Tyler Durden
Thursday, Sep 09, 2021 - 11:15 AM

Leon Cooperman is a frequent guest on CNBC, probably because since he only manages his own money, he can more or less say what he pleases without the risk of alienating LPs (though that doesn't seem to bother Kyle Bass, Jeff Gundlach, and other industry big shots who appear on the network). And what we heard Thursday was mostly more of the same from Cooperman, who declared himself a "fully invested bear" while lamenting the idiocy of contemporary markets.

Coop says he's keeping an eye out for "a lot of things...for a signal of change," including Fed Speak, inflation, market action, the action at gold or bitcoin, the dollar exchange rate and interest rates overall.

"Market structure is broken," Cooperman added.

"When there's a real fundamental reason for the market to go down, it's going to go down so fast you're head is going to spin. There's no stabilizing forces in the market right now. When the market goes down, it'll move so fast your head will spin. It's all algorithms."

He acknowledged that his biggest position is a "contrary view", adding that he was long-energy heading into 2021.

"The Fed is creating the environment for this to go forward. There's a theory going around that the government can't allow interest rates to rise because they can't afford it...but I don't buy into that theory. There's got to be an interest on bonds...otherwise there's no financial incentive...I'd rather take a chance on a common stock."

"I don't want to take a chance on a bond, I don't want to see my capital confiscated," he added.

Cooperman expanded on his complaints about the Fed.

"I see a lot of negatives to this interest rate policy" Cooperman complained. If the Fed doesn't normalize rates, the central bank could "lose control" of markets, potentially sending equities into a devastating freefall.

"The Fed is creating the environment to allow this to go forward"

The only certainty in this market, according to Cooperman, is that some day, things will change: "Things will change when it's least expected, but right now the cyclical conditions are in favor of the market."

Cooperman also had some choice words for Treasures, which he dismissed as "totally mispriced" with negative real world rates, and for bitcoin, which Cooperman said "doesn't make a great deal of sense". "I have a great respect for Barry Diller, he was on recently and he said bitcoin is a 'con job'. The one thing I do know is it's not in the interest of the US government to support the development of a rival currency."

The discussion then turned to bitcoin: "if you don't understand bitcoin, it means you're old," Cooperman said.

Cooperman added that bitcoin does not make a great deal of sense, and recommended that investors who are nervous about the world consider investing in gold instead.

"I would be very careful with bitcoin," Cooperman concluded, eliciting laughter and amusement from the crypto community on twitter.