Rate this post
January 15, 2021 @ 17:24 +03:00
President-elect Joe Biden’s Covid spending plan could recreate the financial conditions seen in the run-up to the 1929 Wall Street crash, according to one hedge fund manager, with rising inflation potentially responsible for popping an “epic” stock market bubble. The comments come shortly after Biden outlined the details of a $1.9 trillion rescue package designed to support households and businesses through the coronavirus pandemic.
David Neuhauser, managing director of small, Chicago-based hedge fund Livermore Partners, said that Biden’s spending plan appeared to be an attempt to mimic the “roaring 20′s” by getting people back into the workforce quickly. “But beware, the ’roaring 20’s′ led to the 1929 stock market crash and the Great Depression. So, be careful what you wish for,” he added.
If passed by the new Democratic-controlled Congress, the “American Rescue Plan” includes $1 trillion in direct relief for households, $415 billion to tackle the virus and roughly $440 billion for small businesses. “We not only have an economic imperative to act now — I believe we have a moral obligation,” Biden said Thursday, as he announced his plan from his transition headquarters in Delaware.
The former vice president is set to be inaugurated on Jan. 20. When asked whether investors should be concerned that the president-elect’s spending plan could lead to an event like the 1929 stock market crash, Neuhauser replied: “I think so.”
‘Careful what you wish for’: Hedge fund manager warns Biden’s spending plan could pop stock market bubble, CNBC, Jan 15