Jeff Zelevansky/Reuters
- Leon Cooperman criticized the federal government for pumping up the US economy.
- The billionaire investor said low interest rates and stimulus are pushing investors to take risks.
- The Omega Advisors boss warned of a brutal market crash once conditions worsen.
- See more stories on Insider's business page.
Leon Cooperman blasted the federal government for juicing a booming economy, predicted rising inflation will prompt an interest-rate hike next year, and warned markets will nosedive once sentiment shifts during a Bloomberg Surveillance interview this week.
The billionaire investor and Omega Advisors chief also blamed the Federal Reserve for investors taking greater risks, highlighted a bubble in the bond market, and questioned the need for greater regulation of family offices.
Here are Cooperman's 11 best quotes from the interview, lightly edited and condensed for clarity:
1. "It's the advance of greed basically. The fact that the industry would get into the same predicament again is kinda surprising. The more things change, the more they remain the same." – comparing the recent collapse of Archegos Capital, which sparked over $10 billion of losses for the banks that lent it money, to Long-Term Capital Management blowing up in the late 1990s.
2. "I'm a retired money manager living on investment income. I run my own money. Why they have the right to regulate me is beyond my wildest dreams." – questioning the SEC's plans to increase oversight of family offices.
3. "I describe myself as a fully invested bear." - Cooperman explained he doesn't currently see the factors that cause bear markets such as accelerating inflation, a hostile Federal Reserve, and recession fears, but he expects the backdrop to change.
4. "The biggest plus out there is the Fed has created an environment where there's an absence of alternatives." - arguing that near-zero interest rates have pushed investors into riskier assets such as high-yield bonds, stocks, and cryptocurrencies.
5. "We are borrowing from the future. Interest rates shouldn't be where they are, and we should not be injecting so much fiscal stimulus when the economy is growing off the charts."
6. "The market's gonna be surprised because the Fed will raise rates sometime in 2022. They'll be forced to by inflation."
7. "Everything I look at would suggest caution, intermediate to long term, would be the rule of the day."
8. "On NFTs, bitcoin, stuff like that - I'm too old. I don't understand that stuff, it's crazy to me, it makes no sense. I'm a meat-and-potatoes guy, a stocks guy."
9. "The bubble is not so much the stock market, the bubble is the bond market."
10. "They're not cheap stocks, but they're not expensive stocks. Nothing is expensive if interest rates stay here." - commenting on "big tech" stocks and echoing Warren Buffett.
11. "When this market has a reason to go down, it's gonna go down so fast your head's gonna spin."