The Blackstone Grp. L.P. Common Units Representing Limited Partnership Interests (NYSE:BX)
5年 : から 10 2013 まで 10 2018
Byron R. Wien, Vice Chairman, Blackstone Advisory Partners, today issued
his list of The Ten Surprises for 2011. This is the 26th year Byron has
given his predictions of a number of economic, financial market and
political Surprises for the coming year. Byron defines a “Surprise” as
an event which the average investor would only assign a one out of three
chance of taking place but which Byron believes is “probable,” having a
better than 50% likelihood of happening.
Byron started the tradition in 1986 when he was the Chief U.S.
Investment Strategist at Morgan Stanley. Byron joined The Blackstone
Group in September 2009 as a senior advisor to both the Firm and its
clients in analyzing economic, political, market and social trends.
The Surprises of 2011
The continuation of the Bush tax cuts coupled with the extension of
unemployment benefits has put all working Americans in a better
mood. Real Gross Domestic Product rises close to 5% in 2011 driven
by improved trade and capital spending in addition to stronger
retail sales. Unemployment drops below 9%.
The prospect of increasing Federal budget deficits and rising
government debt finally begins to weigh on the bond market. The
yield on the 10-year U.S. Treasury approaches 5% as foreign
investors become more demanding. Spreads with corporate fixed income
Encouraged by renewed economic momentum the Standard & Poor’s 500
rises close to its old high of 1500. A broad range of sectors
participate, but telecommunications and utilities lag. With earnings
improving, valuations seem low and individual investors return to
equities for the first time since the financial crisis. Merger and
acquisition activity becomes intense and the market reaches a
blow-off euphoria. Stocks correct in the second half as interest
Although inflation remains benign, the price of gold rises above
$1600 as investors across the world place more of their assets in
something they consider “real.” Sovereign wealth funds of countries
with significant dollar reserves also become big buyers. Hedge funds
keep thinking the price rise is becoming parabolic and sell their
positions and some even short the metal but gold keeps climbing and
they scramble back in.
Worried about inflation and excessive growth, the Chinese decide to
use their currency as a policy tool. They manage the value of the
renminbi aggressively to keep the growth of the economy below 10%
and to prevent consumer prices from increasing above the 4%–5%
range. The move is viewed as a precursor to the world-wide adoption
of a basket including the renminbi as an alternative to the use of
the dollar as the principal reserve currency.
Rising standards of living in the developing world seriously
increase the demand for agricultural commodities. The price of corn
rises to $8.00, wheat to $10.00 and soybeans to $16.00. Commodities
become a component of more institutional portfolios.
The housing situation improves. Although the inventory of unsold
homes remains high, the oversupply is drawn down substantially,
contrasting with an increase in 2010. The Case-Shiller gradually
heads higher and housing starts exceed 600,000.
Continuing demand from the developing world and a failure to bring
onstream new supply causes the price of oil to rise to $115 per
barrel. The higher price at the pump fails to discourage driving,
increase sales of hybrid vehicles or cause Congress to initiate
Frustrated by the lack of progress against the Taliban and the
corruption of the Karzai government, President Obama concludes that
whenever American troops return home, Afghanistan will once again
become a tribal state ruled by warlords. He accelerates the
withdrawal of most military personnel to the end of 2011. Coupled
with the pullout of forces in Iraq, this will leave the Middle East
without a major Western presence in the face of rising fears of
Under duress Angela Merkel leads the way in European financial
reform. The weaker countries, having pledged to cut their budget
deficits in half by 2014, are provided additional transitional aid
by the European Union (with Germany’s backing) and the International
Monetary Fund as long as they implement their austerity programs,
increase some taxes and still show modest growth. The European
financial crisis becomes less of a concern. The policies put in
place prove psychologically satisfying to the financial markets but
harmful in the longer term because they are palliative and do not
While Afghanistan and Iraq cool down as trouble spots, Pakistan and
North Korea flare up. The former continues to be a troublesome
breeding ground for terrorists and the latter initiates further
hostile attacks on South Korea. China does not become involved in a
major way and the international community seems helpless.
The broad international sanctions on Iran finally begin to work.
Mahmoud Ahmadinejad enters into negotiations to scale back the
country’s nuclear weapons development program in exchange for
financial aid and foreign investment. Pressure from the country’s
youth to provide more economic opportunity is the key factor in the
change in policy. Talk about bombing by Israel or the U.S. subsides.
Rising interest rates and a strong economy allow the dollar to
strengthen against the euro and the yen. Although the European
financial crisis abates as austerity programs and higher taxes are
put in place and Japan avoids falling back into recession, America
becomes the developed market of choice for global investors.
Sarah Palin announces she will seek the Republican nomination for
President amidst the cheers of Tea Party supporters. More moderate
Republicans fear her candidacy will diminish the chances of their
party winning in 2012 and try to blunt her efforts. Rick Perry,
governor of Texas becomes a contender. Mike Bloomberg is mentioned.
On the Democratic side, liberals feel Obama has betrayed them and
desperately try to find a challenger. With the economy improving the
prospect of a second term for Obama becomes more likely.
The Russian government decides it is the laggard of the emerging
markets and steps up its efforts to become more investor friendly.
The Kremlin agrees to further nuclear weapons reduction and provides
assurance to companies willing to invest there that the rule of law
will prevail. The Russian equity market soars.
Laws related to marijuana usage are liberalized in more states.
Recognizing that the drug may not be addictive, the public’s
attitudes have evolved over the last thirty years, and this, along
with a desire to alleviate the over-crowding of jails, causes state
legislatures to take a more liberal position. Drug abuse groups are
Infrastructure problems in the United State become serious. New York
subways are inoperative for days as a result of an electrical
problem in the signal system. Gridlock snarls Los Angeles freeways,
and to encourage cooperative commuting, high-occupancy vehicles are
required to carry three or more people. State and local governments
complain they lack the funds to deal with the problems and
Washington refuses to help.
A major state fails to pay interest on a municipal bond issue
because of a lack of funds, causing havoc in the municipal bond
In spite of fears of tenth anniversary terrorist attacks, 9/11/11
becomes a peaceful non-event because of excellent intelligence and
While climate change activists remain shrill, the issue recedes in
importance in the United States. Cold weather prevails during the
winter and the summer heat is not oppressive. Support increases for
a broader use of natural gas by utilities and public transportation
and its price rises to $6.00 per mcf. In Europe and Asia however,
environmental initiatives continue to move ahead.
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