Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Paul Singer: This is an 'unfair' recovery

Founder and president of the Elliot Management Corp., Paul Singer, speaks during The New York Times DealBook Conference on Dec. 11, 2014, in New York City.
Thos Robinson | Getty Images for The New York Times.

Billionaire investor Paul Singer thinks the economic recovery is "unfair" and the Federal Reserve is to blame for growing income inequality.

"[It's an] unfair recovery, a distorted recovery," the founder and president of Elliott Management said at the DealBook Conference in New York Thursday, repeating a previous charge.

Singer blamed the Fed for artificially boosting market prices, which disproportionately benefits those who have the means to invest in stocks and other types of assets.

On the markets, Singer warned about the dangers of bonds.

So-called high quality bonds from governments in the U.S. and Europe "provide horrendous value," Singer said, as they do not price in the risk of inflation and that central banks have been the major buyer for years.

Bonds are "very, very over-priced for the risk-reward," he added.

While bonds are over-priced, Singer said it doesn't mean they are about to collapse.

Singer called stocks "a more complicated picture."

The investor said it's hard to know how stocks would react when market confidence is lost.

Singer briefly weighed in on Elliott's battle with the government of Argentina over bonds.

"They've elevated a purely commercial dispute into a dispute about national dignity," he said of the country's recent default and refusal to pay Elliott.

Singer also defended investor activism, a tactic increasingly used by Elliott as a portfolio strategy and others in the industry.

He said it was "wrong to say the activists have nothing to bring to the table" in response to criticism by corporate lawyer Martin "Marty" Lipton and others.

Singer said Lipton's charge that activists were inherently only interested in the short term was unfair; Elliott usually holds securities for longer than most institutional investors.

And Singer added his hedge fund never did activism for no reason.

"It's not just being hostile. We try and work with companies first," he explained.