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Citadel Griffin warns of risk of inflation for markets enjoying boom in retail

Citadel Griffin warns of risk of inflation for markets enjoying boom in retail


The the frenzy of retail stock trading a new crescendo will arrive in the coming weeks thanks to stimulus controls by the US government, but the inflation that this aid could provoke poses a threat to stock market bullfighting, according to the Citadel Ken Griffin.

He believes in the creation of one of the largest hedge funds in the world $ 1,400 has been sent It is likely that millions of Americans will be influenced by another spirit of retail trade this month, before activity reaches a still high level. Amateur trading would remain a strong feature in U.S. equities, he said.

However, in a strange interview with the Financial Times, Griffin warned that central bank bond purchases and government spending are staggering. US inflation when they were attracting more retail implications from decades of troubled corporate and financial markets.

“Because of the tremendous stimulus that has been unleashed, there is a chance to see real growth in inflation,” Griffin said. “The question is whether it is transient or permanent and structural, and there is a much greater chance in the last 12 years than at any other time.”

Overall, Griffin says he is hopeful, and has praised the rise in retail trade as more Americans take advantage of the U.S. stock market. But he warned that the “doomsday” scenario is a victory, that accelerating inflation will deepen bond market sales, bring down stocks and spark unrest among retail investors hurt by the process.

Fears about inflation they are growing in the investment industry as price gains accelerate and the “anger” of the bond market highlights the fact that the markets are facing the biggest risks today in a monthly survey of Bank of America investors. The percentage of investors who expected faster inflation next year reached its highest in March since at least 1995 when the survey began.

The citadel is one of them hedge fund industrythe largest player, which manages about $ 34 billion. Its core fund returned 24.4% last year despite turbulent markets, and this year, through the end of February, it rose by about 5.2 per cent, according to people familiar with the matter. The fund has earned an average annual profit of 19 percent over 30 years, making Griffin one of the largest hedge fund industries. consistent interpreters.

A line chart of the market share of the overall volumes of U.S. commercial equity (%) now covers almost as much volume as retail investment and hedge funds.

However, he recently discovered the Citadel GameStop talk, a video game vendor organized at the WallStreetBets forum on the Reddit social network, released funds that cover bets against it and stricken retailers for children.

He basically got into it rescue Melvin Capital, one of the largest hedge funds betting against GameStop. When Robinhood, a mediation known to new generations of retailers, was later forced to curb GameStop trading for regulatory reasons, with many Reddit users confirming the conspiracy theory by ordering the Citadel. Citadel Values – A separate high-speed market manufacturer owned by Griffin – It is one of Robinhood’s largest sources of revenue because it pays its customers the right to pursue their professions.

The storm of fire took Griffin away declaring House Financial Services Committee in the month of the last hearing on the GameStop saga. Although Robinhood attracted the most rage and Griffin witnessed it The citadel had nothing to do with Robinhood’s decisionHe did not run away from the hands of some delegates.

Griffin dismisses the debate largely as a storm on social media sparked by populist politicians. But he argues that the saga predicts a broader and more thorny issue when retailers and passive index funds begin to dominate the stock market more, as prices move away from reality.

Inflation erupts as investors fear

In U.S. equities, passive funds are now as large as the actively managed investment universe after a decade of intense growth, while retail investors take on almost all of the joint trading of mutual and hedge funds.

Griffin pointed out how oblique he was McDonald’s tweet of an ice cream cone and a frog emoji by Ryan Cohen, a major shareholder in GameStop, which seemed like a spark to double the share price on a February evening.

“The fact that the tweets of an ice cream cone can move markets will be an academic study for years to come,” Griffin said. “It represents a dynamic in which some stocks today are owned almost exclusively by small funds and liabilities. When you value a stock you get active investors based on traditional metrics. “



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