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Alternative Market Briefing

Hedge fund manager Paul Singer slams government policies on securities

Tuesday, February 03, 2015

Komfie Manalo, Opalesque Asia:

Elliot Management founder Paul Singer has slammed the U.S. government’s policy of encouraging traders to make concentrated bets in "overpriced" securities. He said that the policy is responsible for pushing the markets to unjustified highs.

He was quoted by Reuters as saying, "Today’s trading levels of stocks and bonds reflect 'thumb on the scale' valuations driven by persistent and massive government asset purchases and zero percent (or lower!) short-term policy rates, as well as an essentially unlimited tolerance for risk on the part of large segments of the international investing community. We think it is actually quite nutty to continue holding long-term developed-world government bonds at current levels."

He said that his $25bn hedge fund firm needs to make money this year and warned against taking 'iconoclastic views’. "We believe strongly that today’s prices and yields are extreme and unsustainable, but our wish not to be run over trumps our view that long-term bonds are overvalued," he added.

Singer also criticized governments and central bankers for their failure to address structural reforms.

He said the recent announcement by the European Central Bank of quantitative easing would not solve the economic problems of Europe but could have "large negative repercussions" that could trigger a general lo......................

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