While President Trump was touting the economy during his speech at Davos on Tuesday -- Billionaire investor Paul Tudor Jones sat down with CNBC's Squawk Box at the conference and warned: "We are in the craziest monetary fiscal mix in history. It's so explosive. It defines imagination."
"We are in the craziest monetary fiscal mix in history. It's so explosive. It defines imagination," says Paul Tudor Jones. "It reminds me of early 1999." pic.twitter.com/0WplFvQtbT— Squawk Box (@SquawkCNBC) January 21, 2020
Jones went onto say, "it reminds me a lot of the early '99. Early '99 we had 1.6% PCE, 2.3% CPI. We have the exact same metrics today. The difference is fed funds rate 4.75% today 1.62%, and back then we had budget surplus and we've got a 5% budget deficit ... Crazy times."
"Crazy times" indeed – if Tudor Jones is right, the market is in the final blow-off stage as 'Not QE' propels markets to new highs. It will only be when the Federal Reserve winds down its unprecedented monetary accommodations that will trigger a top in the market (just as it did in 1999 after supplying liquidity to tamp down Y2K anxieties).
As we've discussed before, the deviation of the stock market from corporate profitability is the widest since 1999 – it seems that Jones' warning should grab the attention of bulls as the economy continues to stagnate.
And in Jones' view – this will end very badly.