Name: Blackstone CEO Steve Schwarzman Says Recession Is 'Unlikely Now'
Uploaded: 2019-09-18
Duration: 5 min 55 s
Description: Blackstone stock has almost doubled in 2019 despite market and economic uncertainties.

[ MUSIC ] Steve, in your career, you've lived through so many market declines and recessions and in your new book what it takes. You say that market tops are easy to recognize, what about now in 2019? from Your experience, is the US stock market at its top? Well, you never know the exact top. But it's a lot different than a bottom or in the middle. We've had an amazing run. We also have overhangs of geopolitical issues, trade issues if they break the wrong way. This will be a market top. If none of them break wrong then you keep going. Well, you have a unique overview of what's going on in the world. I mean afterall Blackstone invests in just about every corner of the world. So, what is your take on these predictions of a coming recession? Warning signs of a sychronized Global slump? Is that what you're seeing? You're clearly seeing, as I said globally, things are slowing down. Now, which countries end up falling into a recession, it's more likely in Europe for example, for a variety of reasons. Then it is in the Asian countries and the US is in between. And so, I would suspect, given how strong consumer spending is, and we're pretty much close to full employment now and. Labor rates are going up so consumer buying power is going up. If they continue spending that money, then we'll have a longer run. But there's no doubt, 4 % type growth, 3 % growth would be very challenged now. We know recession's happen, they happen from time to time, are you saying this right now doesn't look like the time? No this doesn't look like the time right now. It's unlikely now. That doesn't mean you won't have a lower growth rate. You know well that market cycles are very difficult for individual investors. They don't want to change, they want the good times to role and you write in your book that They feel threatened by by bad news so what advice do you have for investors who aren't sure or am I supposed to be bullish or bearish right now? Well, I think if you get nervous you take a little money out but you basically leave most of it going because nobody knows in two three years ago People would have sold on a dip and I guess it was 2015, 16. I mean, you've had massive appreciation since then. Short term timing is pretty tough. If you need your money that desperately take it out now and don't worry Let's turn to China. As you know, this trade conflicts with China is one of the biggest worries for American investors. You have strong ties with China, with government officials, with business leaders. What are you hearing from your contacts in China? Well, their perspective is we need to open. But we'd like to do it on our schedule. not yours. And so this is an issue that is going to have to be resolved over time because if the U. S. and China decouple and together there is somewhere between 35 and 40 percent of the world's economy So when the parents are fighting, it affects all the kids. So what is your timetable, how do you think this is gonna play out? Well, no one knows Susie. I think the Chinese are coming over in early October. There been real no discussion since they withdrew in May so part of What will determine what happens is what they're prepared to do, and like a great adventure, we'll find that out in October. Given all your contacts and experience in China, are you involved at all in resolving this trade conflict with China? Has President Trump asked for your help? I try and help out when I can. Mm- hm, are you right now? I'm not disclosing that. What worries you most right now? You actually say in your book that worrying allows you to articulate the downside in any situation, and leads to action. So what's worrying you, and what are you doing about it? What worries me now are high prices for things, because the interest rates are low, and you can finance more. And the second thing are geopolitical risks that no one can control, whether that's US China and other trade issues, whether it's Brexit and its impact on the EU and the EU is 25 % of the global economy. It's quite large. It's larger than United States. It's much bigger than China and it's stalling out now. And if Brexit really does some damage to the EU that's got real impact. Meanwhile Blackstone stock is rallying through all of these uncertainties up almost 70 % this year. What will it take to keep your stock going higher given all of these negative factors that are weighing on the markets? Well, we've been sort of an exception cuz the firm's growing extremely rapidly and for us what's important, is continuing to do a great job, for our customers, for our limited partners, and do it in a responsible way. for society.

Blackstone CEO Steve Schwarzman Says Recession Is "Unlikely Now"

Leadership

Blackstone stock has almost doubled in 2019 despite market and economic uncertainties.