Paul Tudor Jones’ transformation from archetypical ‘80s Wall Street yuppie asshole to Old Testament-style market prophet foreseeing fire and brimstone continues apace. For the Tudor Investment Corp. chief looks upon Trump tax heist and envisages that it shall be the cause of acute “regret” when our surviving progeny, blinking from the hyper-inflation-wracked rubble, gaze upon what we have done. Actually, what the Fed hath done in our names.
The hedge fund manager, who called the October 1987 crash, didn't blame Republicans or members of Congress for the tax legislation. Instead, Jones laid blame "firmly at the feet of the Fed" for encouraging what he called a "fiscal transgression" of negative interest rates at full employment.
"If real rates had been at their longterm averages, would we have enacted a $1.5 trillion tax cut? My guess is the Congressional Budget Office's scoring of the increased interest burden would have nixed it," said Jones, who is co-chairman and CIO of Tudor Investment.
This being an Old Testament-type vision, someone must be held painfully and bloodily accountable for this impudent, impious act against nature. That person will be new Fed Chair Jay Powell, who as a central bank governor went along with all of Janet Yellen’s sinful excesses.
Mr Jones likened the new Fed chair’s predicament to the 19th century battle best known as “Custer’s Last Stand”.
Mr Powell faces a series of of “menacing warriors” that have been “drawn to the battlefield because of our policy experiment with sustained negative real rates”….
But if Powell is tempted into a retreat - backing down from raising interest rates - he faces an even greater foe to his rear, Mr Jones argues, the “Inflation Nation” led by “the fiercest warmongers of them all: the Commodities”.
What do the rest of do amidst this economic apocalypse? Fear not, for in the Book of Second Paul the protagonist consulteth the Oracles, and offers this advice for survival:
“With rates so low, you can’t trust asset prices today,” Tudor Jones said in an interview with Goldman Sachs Group Inc. analysts, published in a note to clients. “If you can’t tell by now, I would steer very clear of bonds….”
“I want to own commodities, hard assets and cash,” Tudor Jones told Goldman Sachs analyst Allison Nathan in the note dated Feb. 28. “The mood is euphoric. But it is unsustainable.”