(Hegnar.no/Dagbladet): – From a market perspective it will be very interesting. There are likely to be some very scary moments in the markets.
The order belongs to American billionaire Paul Tudor Jones. He is the head of Tudor Investment Hedge Fund, which is around seven billion dollars, or 59 billion dollars.
Speaking on Thursday at the Greenwich Economic Forum in Connecticut, the United States, his message was that both bonds and shares are overvalued, writes Marketwatch.
See the warning lights flashing
There is every reason to listen to what Jones says:
The billionaire is known to predict major macroeconomic events in the past. His biggest prediction he earned big money when he predicted the stock market broke in 1987, after Marketwatch.
One day, the Dow Jones Index fell 23 percent, which is the largest stock market ever falling in percentage for the index.
Now he sees the warning lights flashing again.
"This will be a very challenging time for decision makers. The global debt to GDP is at a new all-time high," Jones said.
– bigger risk
He is supported by Harald Magnus Andreassen, chief economist at Sparebank 1 Markets.
"I think he is entitled to risk and risk than many years," Andreassen told Dagbladet.
He does not think it's so weird after a ten-year global economic upturn and unemployment in rich countries that have not been lower since 1980.
"Then stock prices are high," says Andreassen.
But he would like to shade the picture:
"We usually see more signs that it's going to be bad before it smells on the stock market.
Among the things that are still positive in the global economy is that households have paid off a lot of debt – even if Norway is an exception, along with Sweden, Canada and Australia.
Trade war as President Trump has begun to go in a negative direction.
"It's not destructive today, but it creates uncertainty," says Andreassen.
– Comes within two years
He believes that in the long term there will be a major international fall on the stock exchanges and that it will also meet Oslo Børs.
"When we get a global setback, the Oslo Stock Exchange is always exposed," says Andreassen.
But he does not think that the spine will come completely anyway, but will be surprised if it does not happen in two years.
"Oslo Børs is expensive but tends to be more expensive before it goes wrong," says Andreassen.
If there is already a stockfall, he believes it will be below 50 percent.
– How does the man on the street notice that?
– You can take the sub fund you have and split it on two. But to get half away from today's levels, it must be quite creepy in the global economy, "says Harald Magnus Andreassen.
As Paul Tudor Jones waits for anxious times, due to increased interest rates and Trump Administration's tax cuts, he has his stress-tested portfolio.
At the Greenwich Economic Forum on Thursday, Tudor said that the Trump administration's tax cuts from the end of last year could hurt investors in the long run.
He believed that it would overheat the market, and once again required the central bank to raise its key rate.
"It is obvious that tax cuts and the economic activity it has caused have led to raising interest rates," Jones said.
– Tax exemption was promised before the central bank began to raise interest rates, and before Trump said he would become president. The interest rate was zero. Do you really think we would have had such a tax obstacle if we knew where interest would be made? I doubt that Jones continued.
The US central bank has raised its interest rate three times this year and is expected to rise before the turn of the year. Rising interest rates over a short period of time have occasionally worried investors, as it makes it more expensive for companies to borrow money, as well as to finance repurchase and expansion.
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