Despite the shaky economic climate, world-renowned billionaire and private-equity CEO David Rubenstein of the Carlyle Group sees good investing opportunities in the US market.
Although Rubenstein, in the Carlyle Group podcast last August 16, discussed the potential resurgence of a recession with the latest economic downturns, he said that it’s still a great opportunity to invest because America is still the most economically sustainable country in the world.
While the “Brexit” improved some aspects of the economy by lowering mortgage rates and equity, the consumer market is still hesitant to increase their expenditure.
“There is little the Fed can do to counter this, because interest rates have been at record lows since December 2008. In short, we believe spending has already been borrowed from the future,” says Joe LaVorgna, Chief US economist at Deutsche Bank.
A Distinctive Positive Outlook
Indeed, the current economy is bleak in all sense of the word due to the fact that the key readings have already aligned with the consumers’ feeling of being in a stuck economy. But, Rubenstein accepts the fact that recession is a challenge and it’s only a matter of prioritizing the order of investment.
“Right now I’m excited about the fact that after the great recession, the US came back in a reasonably good shape. It wasn’t perfect, but we’re now in a situation where the US economy is doing better than any other developed economy in the world.”
America has fought and won over several breakdowns and the most recent one was last year’s manufacturing and corporate recessions. “We’re probably growing at 1%, inflation would be about 2%, unemployment would be under 5%. The budget deficit is going down. As a result of that, I think it’s a pretty attractive place to invest. Obviously, we prefer 5% growth, 3% unemployment and other things we probably can’t achieve in the near term, but given how deep the recession was, and given how long it took to get to this point, I’m actually excited about where we are and the opportunity to invest in this economy.”
The Huge Contrast
Rubenstein’s remarks about the US economy and the state of the market are in a huge contradiction. Most, if not all CEOs and investors in the country, are looking at the condition in a negative way. The recent earnings and data charts showed no decrease, but a gloomy standstill.