Seriously Good Investor Talks Serious Global Macro: "Tapering is off the table"

From FT Alphaville:

....(Background: most people haven’t heard of Andrew Law. So go read our interview. Or, briefly: Mr Law runs Caxton Associates, the hedge fund founded by Kovner three decades ago that can lay some claim to being one of the most successful macroeconomic investors ever. Law has been running trading at the firm since ’08, when his own portfolio notched up a triple-digit gain, putting Caxton in the black for the year, and has been running the whole firm since 2011. By way of Caxton’s record: 15 per cent average annual return with half the vol (roughly 7 per cent) of the S&P 500. One losing year: 1992, -2 per cent.)
On the US economy/debt ceiling

People blamed the government debt negotiations last year for growth falling and no doubt they will blame them again this year… I just don’t see how the economy is going to accelerate in the foreseeable future. We’ve got more budget negotiations to come – what happened [last week] is just another can kicking exercise. It’s a disappointment to anyone who was expecting the US economy to grow and recovery. The problem has not been solved and the hopes for a grand bargain are in tatters… the lack of visibility is very damaging.

But Mr Law believes it’s not just Washington’s errors which are to blame. Caxton, which had been short US bonds in the first half of the year, went neutral as soon as Larry Summers dropped out the Fed chair race — a move that proved timely given the non-tapering decision weeks later. The FOMC minutes from that meeting, though, convinced Mr Law that tapering wasn’t happening any time soon.

Growth has averaged 2.2 per cent for the last 4 years. We have had zero rates and hugely stimulating bouts of QE and growth has not accelerated beyond that. So why now is it going to? Tapering is off the table for the foreseeable future. I think the Fed came to that decision at the last FOMC meeting – they saw that this economy was not standing up to the [then] prevailing interest rate conditions.

Data from the housing market and the corporate world were crucial....MUCH MORE