Prospect of V-shaped recovery in the US is fantasy - Stanley Druckenmiller

Legendary hedge fund manager Stanley Druckenmiller said on Tuesday that the prospect of a V-shaped recovery in the US is fantasy and the risk-reward calculation for equities is the worst he’s seen in his career. 

The S&P 500 has recovered more than 25% from the lows observed in March. Traders think that the Fed's massive stimulus program is enough to counter the economic fallout from the coronavirus outbreak. Druckenmiller, however, believes the economic effects of the coronavirus are likely to be long-lasting and will lead to a slew of bankruptcies. 

Key quotes (Source: Bloomberg)

The consensus out there seems to be: ‘Don’t worry, the Fed has your back. There’s only one problem with that: our analysis says it’s not true.

I just think that the V-out is a fantasy.

The wild card here is the Fed can always step up [asset] purchases.