Tags: Blackstone | Tony James | Correction | CNBC

Blackstone COO Tony James: Market Overvalued, 'Bit of a Correction Coming'

Blackstone COO Tony James: Market Overvalued, 'Bit of a Correction Coming'
(AP)

By    |   Wednesday, 18 November 2015 05:00 AM

Blackstone President and COO Tony James said that stock market valuations are too high and that he sees a correction coming.

James cited a litany of troubles: the impact of the Paris terror attacks, higher U.S. interest rates on the horizon, weaker growth in China and problems in South American economies, CNBC reported.

"The cumulative effect of that is, where do you look for good news that's not already reflected in the market? Earnings of the S&P are flat at best, so I think stock prices have had a great run and it's time for a pause," he told CNBC. "We see a bit of a correction coming."

He agrees that the central bank should have started raising rates before now.

"I actually don't think zero rates have ever helped an economy. If anything, you could argue zero rates cause misallocation of resources and cause companies to substitute capital for labor, and it actually hurts jobs," he said. "I think the market wants the Fed to get on with it."

He isn't the only one who sees a major downturn ahead for U.S. stocks.

The current stock-market bubble is poised to pop and investors must prepare for a 40 percent to 55 percent tumble from current lofty levels, warns John Hussman, president of Hussman Investment Trust.

"The U.S. equity market is in a late-stage top formation of the third speculative bubble in 15 years,"  he writes in his weekly commentary.

"Investors don’t like to acknowledge bubbles. Yet somehow we have little doubt that a few years from now, they will look back at the present moment and ask that tragically perennial question: “What were we thinking?”

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Blackstone President and COO Tony James said that stock market valuations are too high and that he sees a correction coming.
Blackstone, Tony James, Correction, CNBC
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2015-00-18
Wednesday, 18 November 2015 05:00 AM
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