The many benefits of Private Equity's Wisdom

If you have ever read anything I’ve written, you’ll know I am a huge believer in the mega trend of migrating assets to alternative asset managers like Blackstone, KKR, BAM etc. These are the smartest, most connected investors in the world and they have access to ungodly amounts of capital that gets deployed in thoughtful ways and at perilous times. I thought I would take a look back at some annual reports from Blackstone in the GFC 2007-2009 to see what these smart investors were up to during that difficult period. Yes, they owned assets that were being marked down but there’s a difference between unrealized and realized losses and when you put lots of capital to work into distressed prices and in smart secular opportunities, you come out of the shoot stronger and more profitable. That’s what I want with my allocations to these great companies. BX and KKR are my chosen two thus far but if the carnage gets much worse, I’ll broaden my exposure to some of the other great PE firms. They all have massive dry powder to deploy and the Fed, a former PE guy himself, is delivering wicked good opportunities to his former colleagues. You can read into that comment any way you like!

Remember story of Cheniere Energy and its dominance today? BX was early investor to help $LNG build LNG terminals. Invested $1.5B in 2012, sold its 42% stake in LNG to $BAM in 2020 for $7B. For these kinds of investments, NOT available to most of us, Ill accept stock VOL.

Expectations of Personal Finances in 1 YR vs Real Consumption YOY

Consumers are feeling the pinch and they are expecting the recent past to continue into the future. That’s normal but does not tell you what our absolute experience will be like. But if we are expecting bad things, we usually tighten up spending. If we fear for our jobs, we get more aggressive. The Fed is playing a dangerous game.

Todays FOMC news & summary

Well Jerome continues to be great at the initial press conference then horrible at the Q&A as he gets tripped up easily and continues to talk out of both sides of his mouth. Here’s the summary from Goldman.

As a reminder, heres the Feds game plan. Button your chin strap, he’s a bears best friend right now.