David Rubenstein was interviewed on CNBC this morning. These are the highlights:
Q2 hedge fund letters, conference, scoops etc
(1) We can have a deal with China within 4 months (by December 15?).
(2) We had an inverted yield curve for “10 minutes”. In 2007 we had an inverted yield curve for 3 months. Recessions follow inverted yield curves by 300 – 500 days.
(3) Presidents tend to not get re-elected when a recession precedes the election. Only McKinley was re-elected in a recession.
(4) Markets do not like uncertainty. If a deal is reached with China adding certainty to the economic outlook, the markets will respond well.
(5) A deal can be reached with China on (a) China purchasing more from the U.S. (agricultural products), (b) U.S. firms can gain increased access to China and intellectual property being addressed, but (c) China’s 2025 goals with government support of AI and high-tech businesses will not be included in a deal.
(6) Recessions have occurred every 7 years on average in the U.S. We have gone 10 years since the last recession. We will eventually have another recession.
(7) U.S economy is currently in good shape. He does not see a recession in the near future.
(8) Although the U.S. has low interest rates, Europe and Japan have negative interest rates.
Article by Dr. David Kass
