Top investors gave dire warnings this week about danger lurking in financial markets.
Their caution at the Delivering Alpha conference in New York extended not only to stocks, which float just below all-time highs, but also to government bonds and the integrity of central banks. Investing titans and a former Treasury secretary used the words "dangerous" and "scary" to describe pieces of the market.
Here are some of their comments from the conference, which was sponsored by CNBC and Institutional Investor.
Just shy of a year since he released a video entitled "Danger Ahead," billionaire activist investor Carl Icahn's outlook about market risk has not changed.
"You look at the environment, and I think it's very dangerous. You're walking on a ledge and you might make it to the end, but you fall of that ledge and you're really going to see trouble," he said Tuesday.
Icahn suggested that the market could enter a "major bubble" if the Federal Reserve does not raise interest rates. Icahn and many other observers have contended that crisis-level interest rates could artificially inflate asset prices. The Fed hiked rates from near-zero levels in December for the first time in about a decade.
Icahn contended that even if the central bank raises rates, "there's a problem."
Ray Dalio, founder of the world's largest hedge fund, said he saw a "dangerous situation" in the debt market as central banks around the world loosen monetary policy. The Fed has kept interest rates near crisis levels, while the European Central Bank and Bank of Japan have move to negative rates in attempts to stimulate growth.
So far, the results have proven lackluster.
There's only so much you can squeeze out of the debt cycle, and we're there globally," the head of Bridgewater Associates said. "You can't lower interest rates more."
The global total for outstanding, negative-yielding debt has risen to more than $11 trillion. Sovereign bond yields around the world have fallen this year as investors rush to perceived safe havens. The U.S. 10-year Treasury yield sits around 1.7 percent, and the German 10-year bund yield wavers between positive and negative territory.
After sounding a serious warning in an investor letter earlier this year, Elliott Management's Paul Singer described what he saw as "hidden risk" created by low interest rates.
"I think it's a very dangerous time in the global economy and global financial markets," Singer said.
Singer added that he does not understand the notion of sovereign bonds as a so-called "safety trade," because of their current yields.
Former Treasury Secretary Tim Geithner called the inability to make effective economic policy the biggest hurdle for U.S. economic growth.
He said he saw a "scary erosion" of practical policy.
"I think the scarier things are really about politics, the scary erosion of the pragmatic center in politics, the diminished capacity to make sensible economic choices, something governments really have to do," he said.
Geithner served as President Barack Obama's first Treasury secretary and led the New York Federal Reserve during the financial crisis.
— CNBC's Jeff Cox contributed to this report