Baupost’s Seth Klarman: the Fed has broken the stock market [Q4 Letter]

Baupost founder Seth Klarman told investors that the large amounts of stimulus that have been poured into the world's economies are masking the severity of the problems caused by COVID-19.

Q4 2020 hedge fund letters, conferences and more

In a letter seen by the Financial Times, he said central banks had convinced investors that risk "has simply vanished." He believes that as a result, the market is no longer able to serve as a mechanism for price discovery.

Klarman criticizes the Fed

The Baupost founder blamed the Federal Reserve for making it hard to determine how healthy the U.S. economy is. He noted that the central bank slashed...