Leon Cooperman, Omega Advisors chairman and CEO, joins “Fast Money Halftime Report” to discuss negative interest rates, the Fed, and his best trading ideas.
Leon Cooperman: Interest rates are not the economy’s issue
Jim O’Shaughnessy: Fear Signals Created By The Reptilian Brain
ValueWalk's Raul Panganiban interviews Jim O’Shaughnessy, Chairman, Co-chief Investment Officer, and Portfolio Manager at O’Shaughnessy Asset Management. In this part, Jim discusses the fear and emotional signals created by the reptilian brain. Q1 2020 hedge fund letters, conferences and more That's very cool. For the factor to try to seek the reason why it works, Read More
Japan has had negative interest rates for three and a half years what it has done nothing. Europe has negative interest rates, what’s going on their economy doing very poorly. The president the vice president side, a bunch of factors, some of which, on my list, consumer conferences up retail sales, a strong employment a strong consumer net worth is near record levels. economy is growing at trend, corporate profits, a decent corporate America, if they were pessimistic, they wouldn’t be buying back. Well, the stock they’re buying. So corporate America, sentiment is good. Rates are already low. I pity the poor guy or gal that’s worked entire lifetime. When they go to their financial planner and ask for some advice about retirement. How can we afford to retire? There’s no income. Okay.
Good luck being a saver.
And we have a budget deficit is going up when you come is fully employed. You know, it doesn’t fit with interest rates being cut, interest rates are already low. That’s not your problem. I’ve said this on the programme before but you know, last 50 years, the multiple the market was 15. Okay, it’s currently 16 and a half when the market multiple was 15, the 10 year government six two, it’s currently one eight, and the Fed Funds was five currently too. So I don’t understand investors fixation and need for rates to go down. negative interest rates are destructive to the system, destructive this system.
All that said, I mean, the Fed is cutting rates we know regardless…
Fed is cutting rates because they’re being a prisoner to the stock market. The stock market is dictating Fed policy that I think is a mistake. We’re all this is building up for some problems down the road. The markets Okay, now, we discussed this numerous times. bull markets are born of pessimism, they grow and scepticism they mature in optimism, they die in euphoria other than the IPO market I don’t see much euphoria in the market.
We are inflating a massive bubble that is one day going to burst because of I was that policy that you say is not necessary?
Yeah, I would say that worries look, I think the markets Okay. Now what are the previous speakers said I was given type parabola. When I say they wouldn’t open the market if Elizabeth Warren, my way of just saying the market would be very vulnerable. The market is not focused on a change of leadership, particularly as somebody like Elizabeth Warren, given what she advocates, okay, I’m not. I think America has been great. I think the performance the economy has been terrific. I think all this dissatisfaction with capitalism is misplaced. You know, I love to quote Winston Churchill, very articulate man, so you don’t make poor people rich by making rich people poor. He also said the main vice of capitalism is the uneven distribution of prosperity. The main vice of socialism is the equal distribution of misery. All this talk about free stuff is destructive.