Singer Takes On Fed, Argentina, CalPERS

Dec 12 2014 | 1:20pm ET

Never one to hesitate to criticize, Elliott Management founder Paul Singer took on several of his favorite foes—the Federal Reserve and Argentina—as well as some new ones at a conference in New York yesterday.

Singer said that the Fed’s easy-money policies—which he has long opposed—are behind the stock-market rise, which has widened the inequality gap in the U.S. to the benefit of billionaires like himself. “They are enablers, and I blame them for that,” Singer told the DealBook-sponsopred event in a wide-ranging discussion.

Worse, the Fed appears to be enjoying its role as “the Atlas holding up the world.”

“The Federal Reserve board could say to the fiscal authorities, ‘We’ve done enough.’ It’s up to the president and Congress to generate the policies to unleash the growth potential” in the U.S., he said.

Singer went on to say that he’s not sure confidence that Argentina will do a deal with Elliott and other holdout creditors from its 2001 default isn’t misplaced.

“The government of Argentina has elevated a commercial dispute—and they have not counter-offered—and are posturing it as something about national dignity,” he said. It’s “difficult to predict what they will do after Jan. 1.”

That’s the day the rights against future offers clause in Argentina’s restructured debt expires, meaning it could settle with the holdouts without having to offer equivalent treatment to the more than 90% of creditors who accepted a huge haircut in 2005 and 2010. Many believe that the clause is the main impediment to a deal, which sent the country to another default earlier this year, when it refused to abide by U.S. court rulings ordered it to pay Elliott.

In spite of his pessimism, Singer said the dispute could be simply solved.

“It would be easy for Argentina to settle,” he said. “It’s best if they sit with us and negotiate.”

Singer also used his bully pulpit to sharply criticize the California Public Employees’ Retirement System for its decision to redeem its entire hedge-fund portfolio. The nation’s largest public pension fund said that it is too large for hedge funds to have much of an impact on its returns, an argument Singer called nonsense.

“CalPERS is not too big to have a group of trading firms in their mix,” he insisted. “I think they are wrong to desert the asset class.”

Singer also poured scorn on corporate boards, which too often fail in their duty to oversee a company’s management, he said.


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