Pucklore - Top Business Leaders to Follow

“I see more dry tinder for financial flames than I’ve seen in quite a long time,” says Larry Summers to David Westin. Dr. Summers is concerned with the “gravity” of the fiscal situation and even thinks we need financial crisis contingency planning.

October 7, 2023

“We’ve got something of an energizer bunny economy…. If anything, it looks like job growth is accelerating…. Interest rates may be less restrictive than they used to be.” Back in 2008, he was more concerned about too much austerity, because…

Scott Sperling reiterates his view that current interest rates are, “not so abnormal.” The real anomaly was the last decade. Deflationary forces are reversing.

October 7, 2023

Mr. Sperling remembers his first mortgage rate of 17% in the early 1980s. Globalization, cheap energy (fracking), low cost of capital and other deflationary forces are no longer. We tripled our national debt in the last 15 years, and we’ve…

“That marginal dollar that’s sitting in cash… will just sit there,” says Jim Bianco. “It will be harder to drag that money out.” You get 2/3 of the historical stock market return of 9% with almost no risk in money markets.

October 4, 2023

So Mr. Bianco says that this is what the stock market is competing with now. He agrees that we are generally in a secular bond bear market. And in the short term, he is looking for an old-fashioned capitulation, as…

Howard Marks thinks that the new sea change will make people want to own more fixed income, because rates will be higher for longer.

October 4, 2023

He points out that the S&P 500 has returned about 10% per year for the last 100 years – “That’s a good rate of return.” Today, you get high single digit returns on publicly traded debt securities or low double…

Barry Sternlicht says, “Powell loses control,” when the interest on the debt goes from $2T, to $2.5T and then to $3T. “The economy is going to explode.” He and Becky Quick then ponder if Powell will need to start QE again, because, “Who’s gonna buy the stuff?”

October 2, 2023

Mr. Sternlicht admits that he underestimated the effect of government stimulus, and the infrastructure bill alone is adding 50 bps to GDP. A construction CEO member of his board says 70% of all his projects are public, and he’s never…

“Look, we are in a cold war. They’ve been fighting it since 2001,” says Kyle Bass of Hayman Capital.

September 29, 2023

Mr. Bass also wonders why we give China all the asymmetries, e.g., we let them broadcast anything in our country, but we can’t in theirs. China’s banking system is 4X more levered than ours, and 40% of the leverage is…

Rick Rieder tells Steve Liesman that, “This is a pretty extraordinary period of time, because you’ve got an immense amount of cash that’s sitting on the sidelines that just wants to sit in money market funds. And then you’re getting this immense supply coming to the market.”

September 29, 2023

Mr. Rieder then asks how much risk do you really want to take in term premium when the front rates are so high, and the Fed is indicating they’d like to raise more? This corroborates that narrative of who is…

On the All in Podcast, Chamath Palihapitiya thinks founders should save burn money until 2026, so survive past 25 now. All four founders come to the realization in this episode of higher-for-longer emblematic of what many other business owners are experiencing.

September 29, 2023

The founders also discuss the tightening of risk capital to entrepreneurs, so you need to make due with less. Additionally, they think consumers will pull back on their wallets. Jeffrey Sachs also questions who will take on all the new…

Bill Ackman of Pershing Square still thinks yields on the long end of the curve will go up and that structural inflation will be north of 3%.

September 29, 2023

China selling, Russia selling, Saudi Arabia selling, and the U.S. economy is still doing well. Again, so who will buy all the new Treasury supply on the longer end? https://www.youtube.com/watch?v=TrDI3QDFh0A&t=1234s

Lisa Abramowicz addresses the 1,000 lb gorilla in the commercial real estate room head on with Jones Lang LaSalle’s Mark Gibson. She asks, “Do you think that that is an accurate description of the tsunami of potential defaults that could be hanging out there?”

September 27, 2023

“What is the next shoe to drop?” Mr. Gibson’s response is: “I don’t, simply, because CRE like every asset class adjusts to the cost of capital.” Ms. Abramowicz then asks – after pointing out the Wall Street Journal calling it…

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Scott Sperling reiterates his view that current interest rates are, “not so abnormal.” The real anomaly was the last decade. Deflationary forces are reversing.

Lisa Abramowicz addresses the 1,000 lb gorilla in the commercial real estate room head on with Jones Lang LaSalle’s Mark Gibson. She asks, “Do you think that that is an accurate description of the tsunami of potential defaults that could be hanging out there?”

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