John Pitera's Market Laboratory Message Board

To: Elroy who wrote (13302)	8/2/2012 4:50:08 AM
From: John Pitera	1 Recommendation Read Replies (3) of 14087

I think Dodd Frank plays a role in this, plus the fact that we are living in an era where British Gilts are at 300 year lows in yield, US 10 year yields have been at 200 year lows.... the deleveraging process has reduced returns in all asset classes. A very valid argument was advanced today that in a world where you get 2 to 3 % GDP growth under optimal conditions the past 5 plus years and you have Jeremy Siegel talking about long term US equity returns being 6.6%....... the Institutional investors are creating a type of Ponzi scheme, as we can not expect Equities to generate returns at more than 2 to 3 times GDP. There was a priceless quote I heard today, where a long term hedge fund manager who had gotten out of the management business and converted his own operations into a family office, had some truly profound words regarding how severe the damage and carnage would be when we had the next big credit liquidation. I would love to find the quote..... John