Howard Marks on China, Risk, and Interest Rates

Now the reason for this is largely because the reduction of interest rates reduced the returns on very safe instruments like cash, T-bills, high-grade bonds. Howard Marks: Forty years later I was able to borrow at two-and-a-quarter. I think for various reasons, the Fed is not going to go back to the ultra low interest rates over the last 13 years. The Bank of Japan did it and it showed that the interest rates over the last 13 years worldwide were at 700 year lows. Howard Marks: Now, if inflation average, I'm not 100 percent sure on this datum, but if it averaged two percent a year in this country for the last 30 years and that benefited from the process I described in which durables prices went down by 40 percent. Howard Marks: The default rate in my first 30 years in that position, the default rate averaged around four percent a year. What's the word that people have been applying to China for the last year or so? Uninvestable.