Record margin debt is not the only dangerous sign of the overly leveraged and speculative atmosphere the Fed has encouraged. Now the head of the world’s largest distressed debt fund , Howard Marks of Oaktree Capital , is warning of the dangers as retail investors gobble up distressed debt.
Here is a pretty scary line…
“You can’t go on strike and refuse to buy the securities you’re paid to invest in , because the market may not turn for months or years ,” Marks said. “Never forget the old adage , being too far ahead of your time is indistinguishable from being wrong. So you have to buy but with caution.”
So in other words , the thing just keeps going until one day… it just ceases to go. Yeh , that’s a great fundamental underpinning right there.
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