Elliot Management’s Paul Singer warns downturn will be significant
A major market correction and global recession is ahead of us according to the billionaire co-founder and CEO of Elliot Management.
The investment firm’s leader Paul Singer says that the global economy is likely to be heading into a significant downturn and it could mean a 30-40% market correction.
Unfortunately, Singer was not able to pin down the timescale for the downturn as he spoke during a panel at the Aspen Ideas Festival.
He said that the reaction of the markets to the Fed’s rate rise late last year was an early warning sign that a slump was ahead and he says that central banks need to work on restoring the “soundness of money” and tackle the slowdown in growth.
He said that the banks are generally in better shape now that they were in the last financial crisis but that the financial system is “very much to the risky end of the spectrum,” global debt and derivatives that are at an all-time high.
He said that the number of people who saw the last financial crisis was very small; “it certainly did not include me,” he admitted, noting that it was more practitioners rather than central bankers, policymakers, or economists who did.
But, David Rubenstein, co-founder and co-chairman of the Carlyle Group, who was also on the panel, believes that it will be after the US presidential election in 2020 before anything major happens with the US markets.
He also said that he expects a deal between the US and China to be reached.
