https://www.zerohedge.com/news/2018-05- ... ext-crisisWell, Greg "The Big Short" Lippmann is back with a new warning, telling Bloomberg that the next crisis will emerge from corporate debt (hardly a surprise to regular readers).
Speaking at the Milken Conference, the former MBS trader who now runs his own, $3 billion hedge fund LibreMax Capital, told Bloomberg's Erik Shatzker that corporate debt and equities will face the biggest pain when the next downturn comes; meanwhile unlike the last crisis, investments linked to consumer debt should be relatively safe as companies have been the ones gorging the most on the ultra cheap interest rates during the past decade (alas, this is yet another analysis that avoids the impact of student and auto loans, which have taken consumer debt to new all time highs).
"If the first quarter’s volatility is a harbinger of something bigger, I think that you’re going to see a lot more trouble in the corporate market and the equity market than the structured products market," Lippmann said during a Bloomberg interview in Beverly Hills. "The consumer is in much better shape than corporates. Consumers are less levered than they were pre-crisis. Corporates are more levered than they were pre-crisis, and I think structured products are not going to be the epicenter."
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When over 60% of corporations are running on borrowed debt, this isn't surprising.
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I blame the Fed reserve for this. Printing money with nothing to back it up always will lead to crisis such as this.
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