If there is a bubble it's not much to worry about since the investments are fueled by savings and not debt.
Do you have any evidence of that? Have you looked at the price of money these days? 2%? 4%? Junk spread as low as 1-2? With QE the price of money is being artificially driven down to drive investment. The dirty little secret is that a lot of that investment comes from borrowing - why not if your numbers show you making 10%-20% and you can borrow for 5%-10%?
The last time the fed held the yields so low and pumped money supply so greatly was the dot-bomb. And a lot of that was shown to be driven by debt when post-mortemed.
He is referring to VC investments, which ARE fueled by savings. The LP's of a VC fund are ultra high net worth individuals and pension funds; neither of which invest in alternative asset classes with debt.
Comments
If there is a bubble it's not much to worry about since the investments are fueled by savings and not debt.
Do you have any evidence of that? Have you looked at the price of money these days? 2%? 4%? Junk spread as low as 1-2? With QE the price of money is being artificially driven down to drive investment. The dirty little secret is that a lot of that investment comes from borrowing - why not if your numbers show you making 10%-20% and you can borrow for 5%-10%?
The last time the fed held the yields so low and pumped money supply so greatly was the dot-bomb. And a lot of that was shown to be driven by debt when post-mortemed.
He is referring to VC investments, which ARE fueled by savings. The LP's of a VC fund are ultra high net worth individuals and pension funds; neither of which invest in alternative asset classes with debt.