With multiple analysts, investors, and market commentators warning about the possibility of a widespread financial crisis in the United States, billionaire investor Leon Cooperman has joined the cohort, pointing out that the nation’s skyrocketing debt would be one of the main triggers.
Specifically, Cooperman opined that the country’s national debt was pushing the US toward a massive crisis, slammed the Federal Reserve’s sudden monetary policy shift, and highlighted the view of overvalued markets, suggesting a deep dive could be in store, as he told CNBC on April 23.
Indeed, the CEO of investment advisory firm Omega Family Office said that the government hadn’t done much since the 2010 National Commission on Fiscal Responsibility and Reform (NCFRR), formed under President Barack Obama, that listed long-term strategies for battling the debt.
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As Cooperman explained:
“I think we have a system of leadership in this country that’s evolved to a leadership crisis. (…) Deficits matter, and I think we’re headed into a financial crisis in this country. We have a deficit that is very large.”
Criticizing the Fed
Furthermore, the billionaire investor slammed the country’s central bank, stating he would give it a “low grade” based on how abruptly it changed its approach from holding interest rates “near zero for ten years” to suddenly raising them by over 500 basis points “in a matter of 12 months.”
“Now they’re talking about cutting rates and the Fed is too restrictive. There’s no sign that I could tell from the economy and the market that the Fed is restrctive.”
In Cooperman’s view, this has also contributed to a lot of speculation that has sent the stock market to all-time highs (ATHs), particularly as the Fed Chair Jerome Powell told the public before hiking the rates that stocks were not expensive considering where interest rates were at the time.
Meanwhile, he is not alone in his views. As a reminder, renowned American trend forecaster and geopolitical analyst Gerald Celente has also recently warned about the potential ramifications of the recent intensification of tensions in the Middle East that have seen Israel and Iran pitted against one another.
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