This is mind blowing. Here's the guy running the biggest investment bank in world, whose firm trades billions $$ in bonds each day and he doesn't understand that the Fed sets interest rates and can keep the Treasury market bid and rates at zero for as long as it wants.
And he says this, on a day when the Fed literally is handing bond traders its "playbook," saying it won't raise rates until the unemployment rate dips below 6.5%. So invfestors have a green light to stay long bonds or refrain from shorting until then.
But Blankfein is worried about an imminent bubble. These Wall Street titans really don't know what they're talking about. They really, really, don't. It's amazing that they make the kind of money they do.
|"I think that is one of the big risks that are looming out there right now," says Blankfein. But while low interest rates have been great for corporate borrowers, Blankfein says it may also be creating losses that we will have to deal with later. "Someone is buying that debt," says Blankfein. "What's going to happen when growth picks up and interest rates rise? There's going to be a reversal and people will have losses."|