market folly

Paul Tudor Jones of macro hedge fund Tudor Investment Corp recently sat down with CNBC for an interview.


Tudor said that, "Three things that are driving the world today... and they all start here in the United States. Fiscal policy, monetary policy, and of course a trade irritant, rather than a trade problem."  He says you have to monitor for signs of a further trade war escalating.

If Tudor was running the Fed, he said interest rates would be 150 basis points higher than they are now. 

Single best investment that's working for him right now: "Literally as light as I've been... I can't remember the last time I've been this light."  He doesn't have a lot of macro positions on right now, as the reward/risk is diminished at this particularly point in time.

"I like to have significant leveraged positions when I think there's an imminent price move directly ahead."

He thinks the third and fourth quarters are going to be phenomenal trading periods after a summer lull.  He thinks rates will move significantly higher and the stock market also has "the ability to go a lot higher at the end of the year."

Comparing this time period to past ones, he mentioned 1987 ( but "not necessarily saying we're going to have a crash").  He also listed 1999, or 1989 in Japan.  He thinks this will end with a lot higher prices and forcing the Fed to shut it off.  "It's an old story, we'll probably play it again."

"Rates have got to go up enough to either shut the economy down, and overwhelm from real money selling like we had in '07 those buybacks, or to make it economically less compelling for companies to issue debt and buyback stock, this is real simple."

On North Korea:  Unless it escalates into some military issue, it was a non-event and non-issue.  He thinks it will fade away.  The summit was anti-climactic.


Embedded below is the full half-hour video of Paul Tudor Jones' interview with CNBC: