Elliot Management Founder Paul Singer Warns of Coming Equity Market Crash

According to Bloomberg, Elliott Management’s founder, Paul Singer is the latest to warn of a global equity slow down on near horizon. As a panelist and a participant in the Aspen Ideas Festival, Singer stated “The global financial system is very much toward the risky end of the spectrum in terms of debt and global debt. Global debt and derivatives are at an all-time high”.

He continued “it took all of this monetary ease to get to where we are today…and I think we are at the high end of the risk spectrum”.

The billionaire talked of how very few people saw the prior slowdown and market crash, where only a handful of practitioners where the ones who realized the writing on the wall. The fund manager expects a market correction in excess of 25%.

Strong Proponent of Sound Money

Singer doesn’t think that economists, academics or central bankers are in no better position to accurately forecast the next downturn. He’s also echoed statements provided by other fund managers who’ve been weary of the easy monetary policies present within the world today leading to greater risks in the market.

He’s been a strong advocate of the fact that it has been quantitative easing policies that have led to vast income inequality.

In a past investment letter to investors, he stated “Central bankers do not understand that it was their tinkering, manipulation, bailouts and false confidence that encouraged and enabled the insanity that led to the fragility and collapse”.


Equity Market Relationships with Digital Currencies
Understanding the potential of downturn is important as a drastic correction in the equity markets could very well have an effect of digital assets.

This may lead undesirable events in the digital assets market as well as equity ripple effects may spill over into the digital currency sector.

The larger the hit on traditional equity markets the greater a potential correction in digital currencies.

At the current moment, we know that asset inflation is strong across the board. We know that there’s high valuations in the present market and that global debt continues to rise. According to Bloomberg, global debt is currently more than 3 times the size of the global economy. This hasn’t seemed to have abated.

Rise in debt, and more yield thirst without an increase in global growth is a bad pairing.

These are factors to watch for as we get closer to 2020.