From CNBC:
Analysis used by Warren Buffett and Paul Tudor Jones shows markets are ‘entering frothy territory’ from CNBC.
“Hedge fund billionaire Paul Tudor Jones, who called the October 1987 crash, believes markets are in a dangerous financial bubble thanks to Federal Reserve’s ‘obsession’ with inflation targeting.
The investor lambasted what he called an ‘arbitary’ 2 percent inflation target set by the central bank, a goal he views as both outdated and dangerous.
‘We are in the throes of a burgeoning financial bubble,’ Jones warned clients in a note obtained by CNBC. ‘In the U.S., this obsession on inflation targeting has lately been taken to a new level as former Fed Chair Ben Bernanke has floated the idea of a price-level targeting mandate for the Fed. That means the central bank would allow inflation to remain above 2 percent to “make up” for periods when inflation is too low.’
His warning to clients came on Feb. 2, the day when a chaotic sell-off in the market began…”
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