Record margin debt is not the only dangerous sign of the overly leveraged and speculative atmosphere the Fed has encouraged. Now the head of the world’s largest distressed debt fund, Howard Marks of Oaktree Capital, is warning of the dangers as retail investors gobble up distressed debt.
Oaktree’s Marks Urges Caution as Money Flows into Junk Loans
Here is a pretty scary line…
“You can’t go on strike and refuse to buy the securities you’re paid to invest in, because the market may not turn for months or years,†Marks said. “Never forget the old adage, being too far ahead of your time is indistinguishable from being wrong. So you have to buy but with caution.â€
So in other words, the thing just keeps going until one day… it just ceases to go. Yeh, that’s a great fundamental underpinning right there.
From Sentimentrader.com:
