Miscellaneous Quotes for Week to 10.20.2017

Janet Yellen, Fed Chair at the G30 summit 

US growing moderately 

“Economic activity in the United States has been growing moderately so far this year, and the labor market has continued to strengthen…

Hurricanes to have modest long-term effect

“While the effects of the hurricanes on the U.S. economy are quite noticeable in the short term, history suggests that the longer-term effects will be modest and that aggregate economic activity will recover quickly…The hurricanes will likely result in some hit to GDP growth in the third quarter but a rebound thereafter, and smoothing through those movements, I’m expecting growth that continues to exceed potential in the second half of the year.”

Soft Inflation

“Inflation readings over the past several months have been surprisingly soft, however, and the 12-month change in core PCE prices has fallen to 1.3 percent….this year’s low inflation could reflect something more persistent than is reflected in our baseline projections. ”

 

Office of National statistics. UK

UK inflation at record high

“The Consumer Prices Index including owner occupiers’ housing costs (CPIH) 12-month rate was 2.8% in September 2017, up from 2.7% in August 2017….All else being equal, the depreciation of sterling seen in 2016 and particularly following the outcome of the EU referendum would increase the prices producers pay for imported goods….The inflation rate for a range of goods has, however, picked up since the start of the year and the overall rate in the UK is higher than in most other EU countries, including all of the larger western European nations.”

 

Mark Carney, Bank of England Governor on CNBC

It´s an adjustment period

“Its a period of adjustment, and we have been willing to tolerate inflation being an over the target, where in a relatively rare economy with having inflation higher than target among the major central banks, we are tolerating inflation being over target for longer in order to crowd in unemployment during a time of big adjustment in the uk economy.”

The world economy is growing

“The big picture here right now is the global economy is firing on most cylinders. We have 75% of the world economy growing above potential. The quality of that growth has gone up.”

 

Mario Draghi, ECB President via CNBC

On cryptocurrencies

“With anything that’s new, people have great expectations and also great uncertainty. Right now we think that especially as far as bitcoins and cryptocurrencies are concerned, we don’t think the technology is mature for our consideration… One of the lessons of the great financial crisis is that financial innovation, in this case it’s financial and technology innovation… should be embraced with lots of attention to its potential risks”

 

Steve Mnuchin, Treasury Secretary via Fortune

On Tax reform

“There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done…To the extent we get the tax deal done, the stock market will go up higher. But there’s no question in my mind that if we don’t get it done, you’re going to see a reversal of a significant amount of these gains.”

Miscellaneous Quotes for Week to 10.13.2017

Richard Thaler, Nobel Prize in Economics Winner on Bloomberg. (Here and here

“We all need a lot of humility, and especially about the economy…Surely it can’t be based on the certitude that there will be a massive tax cut, given the seeming inability of the Republican Congress to get their act together. So I don’t know where it’s coming from.”

Risky times

“We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping. I admit to not understanding it. I don’t know about you, but I’m nervous..”

David Bernier, Chief EU negotiator

Deadlock on Brexit Bill

“we have reached a state of deadlock which is very disturbing for thousands of project promoters in Europe and it’s disturbing also for taxpayers…We worked constructively. We clarified certain points. Without making massive steps forward””

Miscellaneous Quotes for Week to 28th July 2017

Bill Gross – Janus Capital on Bloomberg and CNBC

A recession would be good.

“Recession would do the economy some good like a forest with dead wood. You clear out some of the dead wood and you prevent a forest fire…A slow down is finw with me as it produces ultimately in the long term a healthier economy.”

on the Fed

“They’re on to now reducing the balance sheet, because they want a positive yield curve”

 

FOMC Statement

Rising economic activity

“the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have been solid, on average, since the beginning of the year, and the unemployment rate has declined. Household spending and business fixed investment have continued to expand. On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2 percent. Market-based measures of inflation compensation remain low”

Coming soon: Normalization 

“The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated;”

 

 

Miscellaneous Quotes for Week to 21st July 2017

Mario Draghi, President of the ECB

Strengthening economic expanision in the EU has not boosted inflation

“The incoming information confirms a continued strengthening of the economic expansion in the euro area, which has been broadening across sectors and regions…While the ongoing economic expansion provides confidence that inflation will gradually head to levels in line with our inflation aim, it has yet to translate into stronger inflation dynamics.”

 

Bill Gross – Janus Capital

Markets increasingly risky

“…don’t be mesmerized by the blue skies created by central bank QE and near perpetually low interest rates. All markets are increasingly at risk….Strategies involving risk reduction should ultimately outperform “faux” surefire winners generated by central bank printing of money. It’s the real economy that counts and global real economic growth is and should continue to be below par.”

Miscellaneous Quotes for Week to 14th July 2017

JPMorgan Chase & Co. Chairman Jamie Dimon in Paris

We face risks in the unwinding

“‘We’ve never had QE like this before, we’ve never had unwinding like this before. Obviously that should say something to you about the risk that might mean, because we’ve never lived with it before….When that happens of size or substance, it could be a little more disruptive than people think. We act like we know exactly how it’s going to happen and we don’t.”

Prepare for a hard Brexit

“We have to be prepared for a hard Brexit. So whether you think it´s going to happen or you think it is not going to happen, that is the planning.”

 

Air France-KLM CEO Jean-Marc Janaillac

Summer booking positive in France

“The second quarter is good and the bookings for this summer are also quite positive compared to last year…We suffered from terrorist attacks, especially in 2016, but we have recovered this year. Visitors from the States and China and Japan are coming back. This year we came back to the situation of two years ago and a bit more. We are quite hopeful that during the next year we are going to keep on increasing our visitors from overseas.”

 

Bank of Canada Monetary Policy Statement

Stimulus withdrawal begins

“Recent data have bolstered the Bank’s confidence in its outlook for above-potential growth and the absorption of excess capacity in the economy. The Bank acknowledges recent softness in inflation but judges this to be temporary. Recognizing the lag between monetary policy actions and future inflation, Governing Council considers it appropriate to raise its overnight rate target at this time….Governing Council judges that the current outlook warrants today’s withdrawal of some of the monetary policy stimulus in the economy.”
SEC Chairman Jay Clayton at the Economic Club of New York

On the DOL Fiduciary rule

“With the Department of Labor’s Fiduciary Rule now partially in effect, it is important that the Commission make all reasonable efforts to bring clarity and consistency to this area.  It is my hope that we can act in concert with our colleagues at the Department of Labor in a way that best serves the long-term interests of Mr. and Ms. 401(k). There is a lot of work to do, and this issue is complex…any action will need to be carefully constructed, so it provides appropriate and meaningful protections but does not result in Main Street investors being deprived of affordable investment advice or products.”

 

Note by Ray Dalio Chairman & CIO at Bridgewater Associates

It´s the end of an era so dance closer to the exit

“we are at a) the end of that nine-year era of continuous pressings down on interest rates and pushing out of money that created the liquidity-fueled moves in the economies and markets, and b) the beginning of the late-cycle phase of the business/short-term debt cycle, in which central bankers try to tighten at paces that are exactly right in order to keep growth and inflation neither too hot nor too cold, until they don’t get it right and we have our next downturn. Recognizing that, our responsibility now is to keep dancing but closer to the exit and with a sharp eye on the tea leaves.”

And the beginning of a new one

“Generally speaking (depending on the country), it is appropriate for central banks to lessen the aggressiveness of their unconventional policies because these policies have successfully brought about beautiful deleveragings….looking ahead, we don’t project a big debt bubble bursting any time soon (because of the balance sheet repairs that have taken place), though we do see an increasingly intensifying “Big Squeeze””

Miscellaneous Quotes for Week to 16th June 2017

Jeffrey Gundlach, CEO and CIO of DoubleLine from CNBC

The days of low volatility are numbered

“We’re on increasing watch for volatility….there is a massive amount of money that is being short VIX. It’s a trade that’s made a lot of money and its very very crowded, which suggests to me the days of low volatility are numbered.”

Stock up on cash

“If you’re a trader or a speculator I think you should be raising cash today, literally today. If you’re an investor you can easily sit through a seasonally weak period,”

 

Bank of England’s Monetary Policy Committee (MPC) on 15th June

Slow growth in Q1, Q2 expected to be better

“GDP growth declined markedly in the first quarter, in part reflecting weaker household spending.  It remains to be seen how large and persistent this slowdown in consumption will prove….Surveys of general business activity suggest a modest recovery in GDP growth in the second quarter.”

 

 

Bloomberg Invest New York summit June 6-7 2017

Bill Gross Manager Janus Henderson Global Unconstrained Bond Fund

Stocks are overpriced

“Instead of buying low and selling high, you’re buying high and crossing your fingers….If there’s a common factor it’s the expansion of credit. And the credit that’s being generated by central banks. Money is being pumped out into the system and money that is yielding less than nothing seeks a haven not only in bonds that are under-yielding but in stocks that are overpriced.””

The World has changed

“..you basically tell your investors that it’s a changed world, that returns are going to be lower and that if you want to sleep at night, to accept the market as it is. Low volatility requires low returns.”

 

Dan Ivascyn, PIMCO Global Chief investment officer

On tax cuts and infrastructure

“You’ll probably get some tax reform and it will more likely resemble a tax cut as opposed to broad-based reform…There may be something done symbolically, but it’s going to be a lot smaller than the $1 trillion that’s been mentioned.”

 

Jon Winkelried, TPG Co-CEO (Private Equity)

Very high level of complacency

“The level of complacency about where markets are today is pretty scary. People are just sort of assuming it’s OK, that it is what it is, and I have to say that I’m a little bit concerned about it.”

Miscellaneous Quotes for Week to 9th June 2017

IMF Deputy Managing Director Mitsuhiro Furusawa

Asia leads on global growth

“Asia continues to be the world leader in growth helped by stronger demand and accommodative policies. Nonetheless, the near-term outlook is clouded with significant uncertainties and risks…China’s rebalancing process continues, but growth remains reliant on rapid domestic credit growth that could cause problems down the road”

 

Morgan Stanley Wealth Management co-head Andy Saperstein at the Deutsche Bank Conference

They welcome the DOL rule

“The DOL rule by and large is a positive for us, and it sped the movement to fee-based accounts. We agree with the principals of the rule, and frankly from a pure [profit-and-loss] standpoint, we find it to be relatively positive.”

 

World Bank

A fragile recovery

“Global activity is firming broadly as expected. Manufacturing and trade are picking up, confidence is improving, and international financing conditions remain benign. Global growth is projected to strengthen to 2.7 percent in 2017 and 2.9 percent in 2018-19, in line with January forecasts.”

 

Blackstone CEO Steve Schwarzman on Bloomberg

On why financial companies trade at a premium in debt markets

“when I started in finance, I asked someone, “Why do A-rated financial institutions trade at big premiums, in terms of their debt interest rates, compared to a similarly rated industrial company?” He said to me, “Steve, financial institutions go broke in a day. It takes years for an industrial company to lose its market position and finally give up the ghost.”o it became clear to me that doing mergers and private equity deals was unsustainable if I was going to grow the firm.”

 

Miscellaneous Quotes Part 2 for Week to 2nd June 2017

BlackRock Inc. CEO Larry Fink on Bloomberg

Expects a disappointing Q2

“Europe will grow as fast as the U.S. if not faster this year, which is a big surprise…I’d say the second quarter is going to be disappointing in terms of earnings and growth. It’d tell me markets are probably fully priced at this moment.”

On Brexit

“Brexit is worse for the U.K. than Europe,”

 

Clemens Fuest President of the ifo Institute

business confidence in germany at an all time high

“The mood among German business was euphoric in May. The ifo Business Climate Index rose from 113.0 (seasonally adjusted) points last month to 114.6 points, the highest figure on record since 1991. Companies upwardly revised assessments of both their current business situation and their business expectations significantly. This development in the ifo index combined with other key economic indicators, points to economic growth of 0.6 percent in the second quarter. Economic activity in Germany remains very brisk.”

 

Morgan Stanley CEO James Gorman on bloomberg

Markets are very unsettlingly quiet

“There is enormous uncertainty which typically would breed tremendous volatility and it’s not…It’s this very passive perspective that investors have and I think the downside risk at this point is outweighing the upside risk.”

The US economy is doing fine

“If you look at it objectively, the U.S. economy is doing fine, not great, but fine…We need progress on some of these legislative programs.”

On China

“The rest of the world would die to have growth rates north of 3 percent, let alone 6 percent. The economy is still doing well, consumption has risen, which is an important domestic driver.”

 

 

 

Miscellaneous Quotes Part 1 for Week to 2nd June 2017

Treasury Secretary Steven Mnuchin at a Senate Banking Committee hearing

“We do not support a separation of banks and investment banks…We never said before that we supported a full separation….I can assure you the president’s objective and my objective is we create a middle income tax cut and we do not raise taxes on the middle income, if anything the opposite…I am still very hopeful that we’ll get tax reform done this year.”

 

ECB minutes

“In particular, reference was made in the discussion to the high degree of uncertainty surrounding short-term developments in the U.S. economy.”

 

Bundesbank board member Andreas Dombret.

“It doesn’t look like a soft Brexit to me at all. It looks like either a hard Brexit or a very hard Brexit.”

 

Vanguard’s Chief Executive Officer McNabb on Bloomberg

“I think the U.S. market is fully valued right now”