Howard Marks

It tends to reinforce the view that there's a Fed put, that if there's a problem, the Fed will solve it, and that contributes to risky behavior.

These are all bad things.

And, you know, I believe that the Fed should be passive most of the time and only come to the rescue if the market is – if the economy is seriously overheated and tending towards hyperinflation or seriously under –

active and not creating jobs.

I don't think that's the case right now.

And you can see in the divided open market committee that there's a difference of opinion.

So I don't think that action on the part of the Fed is compelling right now.

And there are people who think that rates should be a lot lower than they are today.

I just don't see the merit in that.

Well, the lower base interest rates are, everything scales off that.

So the Fed funds rate at 3 and 1 half is below history.

These are not high rates.

They're only high relative to the last 15 years.

But this is a low rate.

So everything scales off that.

Most things will give moderate returns.

In the debt area, I think prospective returns are moderate, okay, not lush, but not inadequate.

The trouble is that the S&P, based on its P-E ratio relative to history, appears to be priced to provide

a very low prospective return.

Historically, if you bought at this P-E ratio,