Let us talk about what underlies and Underpins every transaction at carlisle Every transaction of president biden And that is a financial system where it Is priced down yield up if i take the Lehman index the bloomberg total return Aggregate index Essentially david we've never seen this How does the financial system adapt To such losses in bonds Well the financial system will adapt it Always does uh markets uh correct and The markets will correct now i think We've had a time of enormous ebullience In the markets low interest rates uh Very high growth rates and now it's Changing you can't go on forever as it Was so now it's slowing down a bit i Don't think it's a calamitous situation But clearly the growth market right now Is not great and i would say interest Rates are going to come up for a while And probably put us into what somebody In the carter administration used to Call a banana uh he didn't want to use The word recession so carter said don't Use the word recession use some other Word and fred khan the inflation advisor Said all right i think we might be in a Banana so i don't want to say we're in a Recession i don't know if we're in a Banana but it's some something close Between a recession and a banana okay so Then biden this morning when he was
Asked about it should have said banana Because you think that's the more Realistic outcome There are many different definitions of Recession so i don't want to be quoted Saying we're in a recession nobody Really knows yet for sure but clearly The economy is not as robust as it was The last couple years in part because of Covet the the effects of that in part Because of the war in in ukraine and in Part because interest rates are going up Again and so if all those things come Together it's not a great economic Environment on the other hand if you're An investor prices have come down to the Point where there's some really good Bargains now and i think a lot of people That buy at the bottom are looking Pretty happy now do you think that right Now this is a bottoming out that you see In other words from the conversation That you're having is there more Optimism about investing now than Pessimism about the recession or banana Well it depends um if you own a lot of These assets and they've gone down You're not so optimistic but if you Don't own those assets and you now have Some fresh capital to invest it's a lot Better now than it was a while ago Because prices are low a price with your Own assets the ones you own may not be Worth as much but you don't have to sell
Those assets these prices but right now People are going to make a lot of money Buying at these prices i believe because Prices are pretty low now relative to Where they've been but david to andrew Mellon in another time in place Are we going to see the elites do a National roll up Of our assets While with inflation the middle class is Flat on their back and to get specific Blackstone take taking the heat but Private equity private money is going After residential housing as a sound Investment there's a raging debate about That is this is this a shell game of the Elites where the middle class beleaguer Doesn't get to participate first of all Blackstone and carlisle and other firms They basically represents pension funds The large extent which are teachers Firemen policemen so forth so it's not Exactly the elites who are buying it for Themselves they're buying it for pension Funds to a large extent secondly um the Economy is much different than andrew Mellen's period of time then a few People did control the economy so now There it's a much bigger economy and It's a global economy it wasn't when Andrew mellon was secretary of treasury Meanwhile we are looking at the turmoil And i do wonder whether you think that Davos still has the same relevancy that
It once did Davos i think is relevant because people Are still coming if people didn't come It wouldn't be relevant people are Coming because when you can go in one Place and see the ceos and the heads of State of so many different places it's a Good thing it's very convenient so if i Wanted to see some of the people here i Would have to spend six months going Around and meeting all these people now I can meet them in a couple days here so It's very relevant now are we going to Solve all the global problems in the World in the next four days probably not But i don't see anybody that comes here And says you know i wish i was somewhere Else people come here because they think It's actually a good chance to meet Other people and because we've been in Covid environment for so long some of These people haven't been seen by others For three or four years in person i Haven't seen some of these people for Three years robert horomance a couple Days ago was heated with us about the Rebuild of our relationship with the Pacific rim What can private capital do To assist our government in projecting a New america vision There you know i think of the iowa Family in the philippines and other Large pools of capital
Don't we assist our nation by projecting And advancing capital to the pacific rim We we do and we are i mean a lot of the Private equity firms and other large Corporations are investing enormous Amounts of money in asia asia has grown Dramatically in the last 40 or 50 years Since nixon went to china it's Incredible incredibly different world We aren't pulling back dramatically i Think the investment in china is pulling Back a bit because of some of the Regulatory concerns there and the Economic concerns and covet but money is Flowing into other countries india is a Good example japan is a good example Korea is a good example a lot of western Money is going in there now so i don't Think we're pulling out from the pacific Rim and i think biden is when he's there Now as he is he's talking about american Capital coming in i think american Capital is coming in
