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Major Fund Manager Panics at Edge of Economy: “Now Is The Most Treacherous Time Ever”

Tyler Durden
September 27th, 2016
Zero Hedge
Comments (62)
Read by 7,925 people

economy-stimulus2

This article was written by Tyler Durden and originally published at Zero Hedge.

Editor’s Comment: The zero percent interest problem is continuing to wreck the economy. It has removed the incentive for investment and the growth of new businesses, and has instead rewarded investment into the most bloated and inefficient mechanisms of the state.

The private sector is being forced to invest in government largess at the expense of people who were once their consumer and production base – but are now reduced even further to wards of the state.

$356 Billion Fund Manager: “Now Is The Most Treacherous Time Ever. I’ve Never Seen This In My Career”

by Tyler Durden

Last week we reported that Tad Rivelle, fund manager at the $195 billion TCW Group, uttered a harsh warning, telling readers of his newsletter that “the time has come to leave the dance floor,” providing numerous examples and anecdotes as to why that is the case.

 

Today it was the turn of Joe Baratta, the top dealmaker at Steve Schwarzmann’s $356 billion Blackstone Group, to follow up with a comparable warning.

Speaking at the WSJ Pro Private Equity Analyst Conference in New York, Baratta said that “for any professional investor, this is the most difficult period we’ve ever experienced”, adding that “You have historically high multiples of cash flows, low yields. I’ve never seen it in my career. It’s the most treacherous moment.”

Unlike strategic buyers who have used their inflated stocks as the acquisition currency of choice to engage in what until recently was a record M&A scramble, PE firms have been largely left out, as they have to invest their own equity which has not levitated at the same rate as the overall market, and are forced to plug the purchase gap with ever more greater amounts of debt. As Bloomberg notes, “the same lofty valuations that created ideal conditions to sell holdings and pocket profits have made it exceedingly difficult to deploy money into new deals at attractive entry prices.”

Just like in the case of the global housing bubble, now openly blamed on central bank policies as UBS did overnight, several executives, including Blackstone Chief Executive Officer Steve Schwarzman, have pinned those unprecedented conditions squarely on the Federal Reserve’s near-zero interest rate policies.”

As a result of the prevailing asset bubble, Baratta said that Blackstone isn’t finding value in large leveraged buyouts of publicly traded companies. Instead, the New York-based asset manager is targeting smaller companies with low leverage, he said.

Still, when not buying Blackstone is mostly selling. In a separate interview with Bloomberg TV, Blackstone COO Tony James said that the firm is still selling more assets than it’s buying,

“We’re net sellers on most things right now — prices are high,” James said in a Bloomberg Television interview Tuesday. “Interest rates are so low and there’s so much capital sloshing around the world.” So much capital in fact, that Blackstone had no problem gathering $18 billion for its latest private equity fund last year. The firm also has an energy private equity vehicle, which finished raising $4.5 billion last year.

This article was written by Tyler Durden and originally published at Zero Hedge.

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Author: Tyler Durden
Views: Read by 7,925 people
Date: September 27th, 2016
Website: http://www.zerohedge.com/news/2016-09-27/356-billion-fund-manager-now-most-treacherous-time-ever-ive-never-seen-my-career

Copyright Information: This content has been contributed to SHTFplan by a third-party or has been republished with permission from the author. Please contact the author directly for republishing information.

62 Comments...

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  1. Heartless says:

    What we all must understand is that as the stock markets rise, it means the worth per unit of the dollar has fallen. When there are no interest bearing accounts that gain in value relative to the incremental price increases of everyday commodities such as food or the utilities no gains are made by the consumers. Oil, metals and grain of all types can remain priced low, the general price per unit (barrel, ton, bushel…) may actually fall due to the lessened need or demand for them simply due to the general economy doing worse. As currency is debased further and further by digitally printing a new sum total of available funds, no one notices that each bill created becomes worth less and less. Think of it as a blind man selling pencils for his survival – he needs more money to eat; yet, he must give 2 pencils now to get the same ability to purchase his Mickey D and a watered-down Coke. He has done nothing to earn the money but sit on his butt all day, his outlay for the pencils now costs him more, the tin cup he uses is rusting, those willing to toss some change into that same are fewer and Ronald MacDonald wants more to serve him by either some illegal counter clerk or a robo-kiosk.

  2. Genius says:

    “For any professional investor, this is the most difficult period we’ve ever experienced… It’s the most treacherous moment.”

    Ya if your an idiot. Smart people invest in food, guns, ammo, supplies, metals, and things useful in shtf! 🙂

    • Colt M4 says:

      genius, I’m doing the same things your doing, stacking food, water,and medical supply’s

    • If you can handle the hard truth, worth listening…

      https://www.youtube.com/watch?v=SkQx_OKnSxQ

      She already did it and THEN some!! Serious balls on this lady…

      • WhoWTFKnows... says:

        This I agree on statement below from the article that the price ratio Silver to Gold, needs to drop. We should be seeing silver to Gold Ratios drop from 70:1 back to 47 to 1 soon at the low trench price ratio.

        However, This dope claiming the pricing of Silver to Gold price ratio, should be the same as the mining yield findings, Silver to Gold Ratio 9:1. ***This has nothing to do with the value of each metal.

        Neumeyer’s S to G price ratio comparison, would be like comparing donuts manufactured to car tires pricing. Volumes of a material yield finds, has nothing to do with the Mineral specs, value, use and pricing. Like WTF? How does this Dope arrive at this Bogus claim?

        Interview: This Silver to Gold Ratio is INSANE & UNSUSTAINABLE

        Keith Neumeyer, President and CEO of First Majestic Silver Corp and Chairman of First Mining Finance returns to SGT report to discuss the roller coaster ride for mining stocks in 2016 and where he think we are in the current correction. Always a straight shooter, Keith bemoans the current 70 to 1 silver to gold ratio asserting that it is no longer sustainable as miners like First Majestic are only yielding only 9 ounces of silver for every one ounce of physical gold they find, and that real world ratio is continuing to decline.

        ***This is the same SGT Report site, that claimed Warren Buffet has $72 Billion all in cash sitting on the sidelines, ready to pounce on an down stock market. Like Pulling BS out of thin air.

        ~WWTI… Keeping these A-holes honest.

      • WhoWTFKnows... says:

        Nia, Great Vid. Only watched about a half hour of it in the middle. Its all manipulated. There is no accountability, and there is no law and order to hold anybody accountable. Get out, stay out of the stock market, its all manipulated.

        It was just announced that Don, Rumsfeld, John Ashcroft, George H Bush and many others in the Old Regime are endorsing Hillary Clinton, just says with Hillary the status Quo criminal cover-ups will continue.

        Trump has struck a nerve and wouldn’t it be great for Trump to hold 9-11 Trials and expose all the truths of these liars and thieves that profited off of 9-11 like Dickhead Cheney.

        As you recall the last debate before Jeb Bush pulled out of the race, Trump told Jeborah, that if he (Trump) is elected, the truth about 9-11 will be told to the American people. Jeb cut his losses, quit, went back to FL, circled the wagons, and started prepping his ass off.

        How much you wanna bet the Bush family has a contingency to flee the country, if Trump is elected and pushed 911 trials. These bet these POS criminals will be lunched in the streets of America, before the trial even begin. The outrage…

        ~WWTI… Gonna get really interesting. GH Bush may try another John Hinkley attempt on Trump. Like his family tried on Reagan. And successful on JFK.

    • john stiner says:

      No, it is not the most difficult period ever. Withdraw your money.

      There, problem solved.

      • Rensel says:

        THE 90% & 10% DILEMMA DURING MARTIAL LAW
        United States of America, Population
        318.9 million (2014)
        – 90% or 287.01 million will accept without too much inconvenience Martial Law
        – 10% or 31.89 million will be staunchly opposed to Martial Law

        31.89 MILLION AMERICANS STAUNCHLY OPPOSED TO MARTIAL LAW
        – 90% or 28.701 million will peacefully protest from their homes against Martial Law
        – 10% or 3.189 million will organize resistance movements against the government

        3.189 MILLION AMERICANS PLAYING THE ROLE OF THE RESISTANCE AGAINST THE GOVERNMENT
        – 90% or 2.8701 million will limit themselves to provide logistics, communications and supply lines
        – 10% or 318.9 thousand will organize themselves into armed militias to fight against government forces

        318.9 THOUSAND AMERICANS PLAYING THE ROLE OF ARMED MILITIAS FIGHTING AGAINST GOVERNMENT FORCES
        – 90% or 287.01 thousand are ages 50 to 80 (including some veterans from wars in Korea, Vietnam, Grenada, Panama, Iraq 1991, Afghanistan and Iraq 2003). 90% or 258.309 thousand suffer from some sort of illness, dependants on prescribed medication, overweight, lack of experience in urban warfare tactics, their shooting skills are below modern standards and their weaponry is mainly composed of semi-automatic assault rifles and pistols. Many of them have a tendency in abusing the use of recreational drugs and alcohol (specially the baby-boomers). Most of them believe that the Constitution is the Bill of Rights (and they are utterly ignorant about the US legal system). The majority of them have an associates degree, while few ones were able to graduate from 4-year college. These people are overwhelmed with credit card debt.

        – 10% or 31.89 thousand are ages 18 to 49 (including some veterans from wars in Iraq 1991, Afghanistan and Iraq 2003). 90% or 28.701 thousand do not have any experience in modern urban warfare tactics, their shooting skills meet only minimum modern standards, and their weaponry is mainly composed of semi-automatic assault rifles and pistols. Some of them are obese while others have a tendency in abusing the use of recreational drugs and alcohol. Most of them believe that the Constitution is the Bill of Rights (and they are utterly ignorant about the US legal system). The majority were able to graduate from high school, while others started a career in the community college system but are unwilling to continue due to that costs that carry a higher education.

        – Consequently, about 3200 militia men are the real fighting force having the herculean task of confronting government forces during Martial Law.

        THE OUTCOME:
        – 90% of the armed militias fighting against government forces will perish in the first year of combat operations (about 287 thousand)

        – 10% of the armed militias fighting against government forces will surrender and be sent to DETENTION camps for indefinite periods (about 32 thousand). They will be tried for insurrection and treason in military tribunals, most will face the death penalty and others will be imprisoned for many years (25+ years).

        – 90% of Americans who were involved in the resistance against the government, and limited themselves to provide logistics, communications and supply lines will be registered and sent to RELOCATION camps for indefinite periods (about 2.6 million). The other 10% will be tried for sedition in military tribunals (about 287 thousand) and imprisoned for many years (15+ years).

        • anonymous5 says:

          Nothing quite like pulling numbers out of your backside.

          • Capt Hale says:

            I believe Rensel spent too much time on his knees licking the boots of his local EBT card dispersal representative. Unfortunately, this causes brain damage accompanied by a crippling condition known as cowardice. I could correct his figures but wouldn’t want to appear insensitive to the retarded population… Seriously though, is this troll POS trying to get us to reveal what our estimated Force Strengths are in our respective areas? Nah, that’s crazy….right?

            — 1life

        • Lone wolverine says:

          Rensel. That’s what the British army thought. The most powerful army on the planet at the time. It took us 7 years to defeat them then the war of 1812 . When they tried again. We will have to make examples of traitors families. But they learn fast. It too bad they push us to that point. Fight fire with fire? A million tragedies? Or a billion? All for greed? What do they want ? Everything we have? Yep.

        • Tactical Zen says:

          Rensel.

          Your math is correct and most would cave. However, history shows 5,000 French freedom fighters successfully tied up between 1 and 2 million German troops in WWII, blowing up anything of value. The Germans had troops stationed every few hundred yards on rail lines yet the Free French managed to decimate their resupply and logistics using improvised munitions, bombs and small caliber weapons. Anything that moved was a target.

          Asymmetric warfare is a bitch. Today, $20 in the right materials can take out an M1 Abrams tank. Ouch! Similar economics apply for aircraft, guided munitions, communications systems, ships, etc. A high tech force is vulnerable to the simplest of tactics. Another example is Vietnam. We should have won in days yet the Viet Kong fought differently and didn’t value life like Americans. Thus, they won.

          That is how a resistance is fought. Not fighting on the enemies terms. Should we have a civil war all that is needed are 5,000 properly trained subversives who are properly motivated. Materials are secondary. Many things go boom or provide equal destruction.

          The Art of War. Best field manual ever.

          Your thoughts?

          Kind Regards,

          Tactical Zen

      • Genius says:

        JS, problem is, they DON’T HAVE YOUR MONEY!

        • john stiner says:

          There is more truth in your sentence than you realize.

          • WhoWTFKnows... says:

            Food Recall: Tyson Chicken Nuggets sold at Costco’s contains, plastic fragments in the nuggets..

            How tasty, esp after the plastic is melted when cooked, then hardens in your stomach when eaten. yummy..

            ~WWTI… I don’t even buy that crap.

            btw/ McDonald’s chicken nuggets are reconstructed chicken parts, and sawdust added as filler.

    • Paranoid says:

      He is not an Idiot, you are. Don’t call names just because he’s smarter than you. He’s telling the truth. You really think he can just buy 300 Billion dollars in “useful stuff?”: You are an ass. It’s quite possible he could bury you in the hole he keeps for his Silver “petty cash”. He’s trying to tell the truth, responses like yours are why lots of people don’t bother to even try to educate the stupid.

  3. Do you think it wIll happen before the election?

    • nubria 123 says:

      When you see a bank virus on friday night its over. What you have in your hand will be all you have.

    • Jacknife says:

      Well Joe, let me consult the crystal ball……it said “who the hell knows?” So stock up your pantry, learn how to hunt and fish. Knowing how to purify water will help too. In other words, take advantage of the time you have. Everyday is an opportunity.
      Stay quiet Be smart.

  4. The German bank, Deutsche has dropped to an all time low. It’s stock has fallen over 50%…….

  5. anon says:

    For though they may be parted
    There is still a chance that they will see
    There will be an answer, let it be

    Let it be, let it be
    Let it be, let it be
    Yeah, there will be an answer let it be.

    Beatles.

    Keep Prepping. It’s a coming.

  6. The economy can implode at any time.

    Prepare for a time when you have zero income. If banks stop cashing checks, if ATMs no longer dispense cash; what will you do?

    If you are living on an off grid self sufficient homestead that is owned outright and you’ve paid forward on your property taxes, have guns and ammo for protection, have livestock, and grow your own food, and can for the winter; you are going to be just fine in spite of what happens with the banking system.

    If you don’t, you better get prepping, cause time is running out.

    Buy only those things which will aid your basic survival. Stop wasting money on crap like electronic toys for the kids. Professional sports events, music concerts, movies and junk food. Concentrate on obtaining practical tools, books, and items. Put up shelves. Buy an All American pressure canner 21, books on canning and preserving food. And join those of us who have rejected the superficial lifestyle for a smarter life where our efforts are aimed at increasing the survival potential of our family and our people.

    __

    • Genius says:

      We will be fine. Move to the retreat and barter for labor etc. If that fails then plan C and wait it out. BLM (feds) better not be anywhere near me. Metals, booze, ammo are a lot better than cash anyway lol.

      • Warchild Dammit! says:

        B from Ca.,mortgage payments(don’t have em)/property taxes,two of the last things to worry about it hits the fan.I get it,you live in Ca. so they will make desperate last attempts at tax,they even in Ca. will be killed for trying.Really,the banks ect. shut down all bills are off the table and done for.

    • Lookingdown says:

      Well put and in California I would say even among the most intelligent the vast majority are going to go quietly into the night.

      • cyberrifles says:

        Would you explain that statement more? Quietly into the night?

        • Ketchupondemand says:

          cyber, I think he means most people will be like good sheep and do what they’re told, i.e., meaning the government, fed. or local, imposing martial law. “Get on the bus”, train, etc.

          Every day, more and more, I see and hear “Taps” playing for the late USA.

      • Genius says:

        I have a question concerning cats. We have a cat about 1 year old and a 8 week old kitten. The older on catches mice but does not kill them. How can I get her to kill the little bastards? They are both house cats….

        • Genius says:

          UPDATE: I put the kitten in the room where the mouse was and he killed it and brought it out here to devour and growled at the big cat when it came close. I guess the new catman of the house has been christened! First blood at 2 months old lol.

          • WhoWTFKnows... says:

            Hey G. The big cat installed Cat Martial Law and loves to Slap the mice around. The younger Cat installed a Cat firing Squad. As a team you got the cat bases covered. If you see the cats giving a tag team slap high five switch off in the hallway, praise them well with some cat nip dip. lol.

            -WWTI…

        • Warchild Dammit! says:

          Does the older one torture em ect.,long term mortal wounds,tis a cats nature.Heaven forbid,Warchild does that I am a psycho ect.,not just a tis”Warchilds nature”!I really hate hypocrisy.

          Now,back to the cats,they do no harm to said mice cut back a bit on the food,that said,their mere presence believe me is cutting way down on the rodent population in your immediate area.

          The cat from hell,aptly named” Warchild Tsunami”would catch mice and a few rats and carefully eat their brains,would then present the rest to me mom or myself when visiting a a trophy/gift/who the hell knows.

    • Wilburn Blackwell says:

      “…and you’ve paid forward on your property taxes…”

      Kinda like bargaining with a mugger. “If I give you $1500 now, and $3000 for the next two years, will you please not send people to kill me and take my land???”

      Fuck that. In a SHTF scenario, I don’t think the county will have the resources to send the enforcers. And if they do, well….defend your home.

      • WhoWTFKnows... says:

        Have you ever seen the current lists of property tax deliquincies and defaults in your local County? Ive seen them printed in newspaper form in Tampa FL. 2 inches thick and thousands per page. As if nobody pays taxes. See what happens in a collapse. You can pay the taxes on your next door neighbors property and soon own it with some legal action.

        -WWTI…

        • anonymous5 says:

          Yeah….you “own” it…..so what? Let’s see you try to take possession when SHTF. Please….let us know when you plan to do it so we can sell tickets and popcorn.

          • Redoubt Renee says:

            I know that in my county, properties don’t even come up for auction until they are three year delinquent, and even then you have first right of redemption up until the day of the auction.

          • WhoWTFKnows... says:

            Take posession? Hell yeah. Me and the local Sheriff says I own it, as he forces them to vacate the premisis or face arrest. You can share your popcorn with the new homeless.

            -WWTI…

            • anonymous5 says:

              When SHTF, there won’t be a local Sheriff. He’ll be home taking care of his family.

              And your neighbor will happily hand you your head on a stick when you try to force him to vacate “your” property.

              Possession is 9/10’s of the law. And when SHTF, it’s 10/10ths.

              WROL is another word for SHTF. When all of this goes down, that’s what it’s going to be.

              Watch “The Road” and you might begin to understand.

            • Warchild Dammit! says:

              Yep,enjoy the popcorn as you and sheriff who were shot in the back are food for your swamp pets,folks ripped off by the banks in these crazy times have nothing to lose and for better or worse will see folks like you as a mini soros profiting from said theft,yep,will be gator feeding time for you,and you will be the meal.

  7. Warchild Dammit! says:

    You choose not the protector of humans(Thor)can always go more exotic with Kali(godess of death),I knew a feline Kali but she probably is no longer with us as lost touch with owner years ago,she was a hell of a feline though.

  8. swinging richard says:

    A reshuffle will occur. The rich will benefit at the expense of the poor and indebted.

  9. Lone wolverine says:

    Now is the most treacherous time ever. No one will know the day and the hour. But we will be destroyed in one hour. Not much wiggle room. I guess that is why we are being warned. The four horsemen . The ten virgens . It’s all part of the plan . The Tares won’t prep. So we can burn them. That’s the plan .look up and rejouis. Your reward is near.

  10. anon says:

    On Drudge

    The United Nations wants the US Government to pay reparations to Blacks.

    Screw the UN. I say, Kick them out of NYC. Maybe they need to move to IRAN and take Obama with them. Plus a few others I might add.

  11. Lone wolverine says:

    Just watched a Joey salads video . All lives matter. Lock and load boys. It’s comin. Weather you like it or not.

  12. Brian says:

    This is a critical time and our attention needs to be focused on the present. The forces that are out there are out there are probably too powerful to survive, no matter how much you prepare. All you can do is try.

  13. Warchild Dammit! says:

    That un garbage falls under the same idea as Warchild wants a Ferrari(but someone else to pay for it!),ain’t happening.

 

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