January 26, 2014
What a difference half a year makes. It seems like it was yesterday when Blackrock head Larry Fink, when discussing the future of capital markets with the now defunct money honey, uttered these infamous words about any and all possible risks: “it doesn’t matter.”
Suddenly, it matters.
Speaking in Davos, Fink warned there is ‘way too much optimism’ in financial markets as he predicted repeats of the market turmoil that roiled investors this week.
As Bloomberg reports, Fink warned a Davos panel that “the experience of the marketplace this past week is going to be indicative of this entire year… We’re going to be in a world of much greater volatility.”
Some other notable soundbites:
Fink’s outlook challenged the relatively upbeat tone struck by others during the four-day gathering in the Swiss Alps, which began after the International Monetary Fund predicted the strongest world economic expansion since 2011. The meetings of the past seven years were clouded by jitters about financial crisis in the U.S. and Europe.
While Fink agreed “the overall trend is going to be fine,” he predicted “quite a bit of disruption” and said the onus was now on governments to work to improve economies.
“That troubles me, as there has been great consistency of dragging their feet by politicians,” he said. “The marketplace has been rather encouraged by good, consistent monetary policy across the world.” “It would be very abnormal if we didn’t have consolidating moves in the assets that have gone up so much,” he said.
And while it appears lost on Fink that the only reason politicians have been dragging their feet is precisely due to central banker money printing policies which have allowed elected representative to do absolutely nothing while reaping the benefits of rising or stable popularity ratings thanks to all time stock market highs, at least we know how the world’s largest asset manager is positioned.
That said, it would be very ironic if the Davos billionaires really did follow through on their promise of eliminating inequality… by destroying the financial wealth of the uber-wealthy.