November 21, 2011 6:39 pm
Biggs revises opinion on economy
By Dan McCrum in New York
Barton Biggs, the veteran strategist and investor, has warned that he was too optimistic on the prospects for economic recovery and that the outlook for the US stock market is now extremely poor.
“It’s a much more bearish environment than I anticipated,” said Mr Biggs in a Bloomberg Television interview on Monday. “We are going to have a decline at least back to the lows of last summer. God forbid, maybe even testing the lows of 2008 and 2009,” he said.
Mr Biggs attributed the change in view to the actions of politicians in both Europe and the US, in particular the apparent failure of the congressional supercommittee to agree $1,200bn in federal budget savings.
“I think it’s pathetic that they haven’t been able to come to a deal. It shows our political system is really dysfunctional. I’ve been wrong in being too optimistic about the outcome in the US,” he said.
Mr Biggs, who runs the $1.4bn hedge fund Traxis Partners, said that he had cut his net long position – the difference between optimistic bets and offsetting short positions – to below 40 per cent and expected to cut by a further 15 percentage points