Could Rising Markets Pose Risks to Growth?
Lord Abbett's Investment Perspectives
Could Rising Markets Pose Risks to Growth?
Partner & Director of Global Asset Allocation
Giulio Martini: Hi, I'm Giulio Martini. I'm the director of global asset allocation at Lord Abbett, and my team manages the multi-asset portfolios.
Is the end near?
Martini: The other thing that's led to the end of periods of economic growth are financial market excesses when you tend to see a very large misvaluation in parts of the market. You know, we saw it in mortgages and the transformation in the technology of providing mortgages in the early 2000s that led to a huge increase in issuance. Ultimately that got stretched with a lot of that issuance taking place to not creditworthy borrowers and a lot of it staying on the balance sheet of financial institutions which then were weakened when the housing market started to roll over.
If I look now, I don't see anything like that kind of financial market on a huge scale that's really threatening the environment. I don't know if you guys in the credit markets, you know, see something, but I don't see anything that's a worrisome, large, threatening misvaluation that should make you think, you know, the end is near. So that's something that's comforting as well. I think that we don't seem to have the financial market strains and excesses, which sometimes has given you a downturn in the past also.
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