Quotable Quotes

"Bull markets are characterized by disbelief. Our sentiment work still shows extreme bullishness. In this respect, this market is in no way similar to that of the mid-cycle pause of 1995. At that time investors were immensely bearish. Keep in mind that Alan Greenspan's "Irrational Exuberance" speech was in 1996, and that he was not commenting on the yet-to-come Tech bubble."
Rich Bernstein


"The right response to current balmy economic conditions is not complacency, but to treat them as an opportunity for action. This is an ideal time to implement long-term reforms that will allow individual economies to grow faster and adapt better to change. This is, above all, the ideal opportunity to make the policy changes that will allow countries to exploit the opportunities provided by globalisation."
“Risks and rewards of the world economy’s golden era”
Martin Wolf
(see related chart to the left)


FT: "We’re seeing LBOs become more and more leveraged. We’re seeing covenants weaken. As a buyer of loans does that worry you?"
MR FINK: "Absolutely. I think we are going to look back two or three, four years, the same way we were looking at the subprime market where we saw standards and covenants deteriorated. We’re seeing the same thing in the credit markets. I believe if I was the chairman of the Federal Reserve I’d be paying more attention to that, because to me this is going to be tomorrow’s problems. The biggest reason for this, we’ve had just vast liquidity. The global capital markets have flourished so well, and there’s so much money sloshing throughout the world, people are looking for ways to invest. And so the risk we have throughout the world now is that not only are we trading credit, higher grade credits to lower grade credits with poor covenants; probably the greatest issue that’s confronting the world’s investors is we are trading liquidity for illiquidity."
FT interview with Blackrock’s Larry Fink

"Get your facts first, then you can distort them as you please"
Mark Twain

Have a good weekend.