Publications

- May 1, 2022: Vol. 9, Number 5

Talking Points: Quotations from people in the news

by

Lee Cooperman, U.S. billionaire and hedge-fund manager: “Sometimes the most painful asset is the right asset to hold, so given everything going around in the world, I don't mind having some cash.”

Alexis Ohanian, venture capitalist and founder of Reddit: “It’s been shocking to me how much time I spend on Twitter personally in the last few years. It has become the epicenter of work — at least in the tech industry. I’ve watched people go from total random people on the internet to, within a couple of years, having real voices, real followings.”

Tom Edwards, global president of valuation for CBRE: “As the U.S. heals from the pandemic, investors’ demand for real estate has grown to new heights. Low cap rates for industrial and multifamily properties reflect solid fundamentals and rent growth prospects that characterize these sectors. Conversely, lingering uncertainty in the office sector suggests there is upward pressure for yields in this asset type.”

Lawrence Summers, former U.S. treasury secretary: “Recent research that I conducted with my Harvard colleague Alex Domash shows that overheating conditions of high inflation and low unemployment are usually followed, in short order, by recession.”

Mellody Hobson, chair of the board at Starbucks on CEO Kevin Smith’s decision to step down: “It’s not a surprise to the board. Over a year ago, Kevin signaled to us that he was starting to think about his future and starting to think about retiring, and he told us he thought the waning days of the pandemic might be the perfect bookend to his five-year career as CEO.”

Peter Buttigieg, U.S. secretary of transportation, on the nation’s supply-chain: “There are some real gaps in how data is shared. You might assume the different players in our supply chain know where everything is and where it’s moving and when it’s going to get there. But because there are so many different players, it doesn’t actually work that way. What we’re finding is there are gaps in knowledge between the truckers, the warehouses, the ultimate owners of the cargo, the shippers, and even different parts of the port.”

Larry Fink, CEO, BlackRock: “The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades. A large-scale reorientation of supply chains will inherently be inflationary.”

Andrew Ross Sorkin, co-host of the Squawk Box, on stock buybacks: “Buybacks are used to up compensation, up the value of that stock, so that CEOs can sell. There’s clear evidence that is the case. What we don’t want is people goosing the stock. The number of shares that are sold by executives in the process of a buyback program are five times and, in certain studies, 10 times higher within days, weeks, months of that period. It’s irrefutable what’s going on.”

Ruchir Sharma, chairman of international business at Rockefeller Capital Management: “About 25 percent of gross domestic product and 40 percent of bank assets in China are tied to the property market, where estimates of the effective default rate on high-yield bonds are close to 25 percent, a record high.”

Frank Luntz, political consultant and pollster: “Tax policy is less important to people today than it has been in any time since I’ve been doing polling. When you ask people what matters most, it’s not raising taxes on the wealthy, it’s stopping inflation, and stopping American dependence on oil and foreign governments.”

Mike Bessell, head of global strategic analytics at Invesco Real Estate: “We’ve had perfectly good remote-working capabilities for some time, and even pre-COVID no one needed to attend the office just to sit at a computer connected to the network. COVID simply forced a massive remote-working experiment.”

Dan Ives, research analyst at Wedbush Securities, on Elon Musk spending $2.9 billion for a 9 percent stake in Twitter: “This is just a starter. He’s not going to do this just to take a passive stake, he’s going to ultimately try to either really change Twitter with a more active stake, or, eventually, it could lead to a buyout. I think that’s how he’s going about it.”

Mary Kay Henry, international president of the Service Employees International Union: “When 30 percent of the American workforce was bargaining in the ’70s, wages were rising for all working people and economic inequality was shrinking. We’ve got to decide as a nation whether we’re going to tackle the grossest racial and economic inequity in this period. We believe that unions-for-all is a key lever against that inequality.”

Jamie Dimon, CEO of J.P. Morgan Chase: “If the Fed gets it just right, we can have years of growth, and inflation will eventually start to recede. In any event, this process will cause lots of consternation and very volatile markets.”

Aneta Markowska, chief economist at Jefferies: “It’s easy to construct a very negative narrative, but when you actually look at the magnitude of all those impacts, I don’t think they’re significant enough to push us into a recession in the next 12 months.”

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