Market Overview

Stanley Druckenmiller: Forget the Sequester, The Bond Market Could Shift At Any Time

Share:
Stanley Druckenmiller: Forget the Sequester, The Bond Market Could Shift At Any Time
Related TLT
Why Treasury Bonds Could Rise In This Interest Rate Environment
Fed Moves Markets With First Rate Hike Of 2017: On Path To 'Beautiful Normalization'
Is The Divergence Theme Fading? (Seeking Alpha)
Related SPY
Jim Cramer And Bob Lang's 2013 FANG Call Was A Home Run
People Feel Better About How Much Cash They're Saving For The First Time In 6 Years
Slow Economic Growth Will Be Around For A Long Time (Seeking Alpha)

Retired hedge fund manager Stanley Druckenmiller appeared on CNBC Thursday. Druckenmiller, known for running Duquesne Capital and managing money for George Soros, gave a pessimistic outlook for the long-term viability of the U.S. government's budget. The current debate over the upcoming budget sequester was small potatoes, Druckenmiller argued, compared to the real spending crisis.

Druckenmiller warned that the government's persistent budget deficits would eventually catch up with it. Although interest rates remained small for the time being, there would come a day when interest rates rapidly shifted. Druckenmiller cited Greece, where the bond market went from being fine to a full-on crisis in roughly two weeks.

As for when this would happen, Druckenmiller didn't know, and said it was impossible to time. Yet, he expressed the belief that if Congress acted in the near-term -- within the next 5 years or so -- a crisis could be averted.

Druckenmiller's comments aren't particularly unique -- many critics of government spending have made similar statements over the last few years. Yet, Druckenmiller's assessment is noteworthy given his demonstrated market success over the last 30 years.

Posted-In: CNBC News Bonds Futures Hedge Funds Politics Legal Markets Best of Benzinga

 

Related Articles (SPY + TLT)

View Comments and Join the Discussion!