Tags: leon cooperman | too much debt | stock market

Leon Cooperman: 'Too Much Debt' Dooms Stock Market

(Dreamstime)

By    |   Friday, 06 November 2020 02:54 PM

Billionaire investor Leon Cooperman warns that “too much debt" threatens the seemingly unstoppable surging stock market.

“I think the overwhelming reality is the Fed is just creating this environment of free money. You have to kind of make a judgment whether that’s justified, how long it’s going to last and what impact this has on the longer-term outlook,” Cooperman said on CNBC.

“There’s just too much debt in the system, and I think ultimately there will be a problem,” he said.

The Federal Reserve kept its loose monetary policy intact on Thursday and pledged again to do whatever it can in coming months to sustain a U.S. economic recovery threatened by a spreading coronavirus pandemic and facing uncertainty over a still-undecided presidential election.

Cooperman doesn't expect the Fed's strategy to last forever amid such a volatile investing environment.

“I’m assuming that in the next 12 or 18 months, something will happen to change this Goldilocks environment and it will force the hand of the Fed” to change policy, he said. “It might be the dollar going to new lows and inflation picking up,” the chairman of the Omega Family Office said.

“Longer term, I probably have a dissenting view than Wall Street because I’m of the concern as to who pays for the party when the party is over?′ said Cooperman.

However, Cooperman said stocks right now are adequately priced. 

Meanwhile, no wonder stock bulls took a breather in Friday trading: An everything rally has taken over Wall Street this week even as the market action defies expectations heading into the U.S. election.

More than $4 trillion has been added to global equity markets since Monday, putting it on track for the third-biggest week of 2020, Bloomberg reported.

It didn’t seem to matter if the asset was a haven or a risk bet, global or U.S., liquid or illiquid -- investors poured cash into global markets with a force that hasn’t been seen in months.

What started out on Monday as a rally on bets that Democrats would deliver a big post-election spending deal carried through Thursday, even as it became clearer that Republican hawks are likely to keep control of the Senate.

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Billionaire investor Leon Cooperman warns that “too much debt" threatens the seemingly unstoppable surging stock market.
leon cooperman, too much debt, stock market
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2020-54-06
Friday, 06 November 2020 02:54 PM
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