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Peter Boockvar

lines on the record: 101
first: 2024-07-15
most recent: 2024-07-15
sittings or episodes: 1
sources: podcast

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“They can check out legally.com and learn more about our services and the book report I have on Substack so they can go there and check out my daily missives.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Yes, and there is some shadow leverage in the shadow banking system. I don't know exactly the details, but I mean, the IMF has noted it. So, you know, private credit, oftentimes those deals are levered. They're using borrowed money to then make loans. And I'd agree with you. The regulars are starting to pay attention, but they're in the stage, I would say, of writing very compelling and detailed and well-researched reports about them. They're not in actually regulating them.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So, this is all a world that we really need to pay attention to if rates stay high, notwithstanding some rate cuts on the short end, and if the economy rolls over.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So, I think in terms of the financial system like 08, it's not like that, I just think that it's going to be a further, if this unwinds, you know, it's going to be a problem. It gets to my worries about a death by a thousand cup type economy as we continue to transition to this higher rate world. This transition is not over in one to two years. It's a multi-year process past that because every year there's a lot of debt coming due that was priced pre-2022. The regulators are finally paying attention to this shadow world, this non-banking world. But I don't think people appreciate the amount of money. And the non-banking exposure actually has spills over into the banking exposure. Because a lot of the big banks are providing financing to the non banks.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Was prior in case of an economic downturn. Make sure that the sponsor is not taking that loan and paying themselves a dividend. Because then that company is even more levered.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Correct. There are these NAV loans. As a perfect example. Luckily, there's some investors and private equity that says we will not invest in any private equity fund that has the potential for an NAV loan in the covenants. So yes, their private equity deal at the end of the day is a levered law. Let's just be clear. For better for worse, it's a levered law. They buy an asset, whether it's a public company they take private, or they buy a bunch of private companies, roll them up, or they buy an individual, and they buy with equity, and they buy it with debt. It's a levered loan. That's what it is for better, for worse. So if you want to lend to that levered long, just make sure that what they do with that money and how much equity is in that deal. And make sure right now in today's environment there's more equity than there.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So I actually think I read it in an IMF report that actually sponsored deals where you're lending private credit is lending to a private equity-backed company, a sponsor-backed company, they actually have a lower default rate because if you're lending to prospected private equity company, they're not going to screw you because they know that's bad for your reputation, but that might not work in a recession. However, it is funny, like Peter, when you're making a loan to this company that's backed by the private equity company, oftentimes it's not going to the company. It's going to the private equity. So the private equity company can take money out and pay a dividend to its other investors”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So, private equity deals, the economics are less attractive because interest rates are higher, and now we're potentially going into an economic recession. I just think that anybody who's going to invest in this space needs to have eyes wide open. But your point, I've just recently read this week about those valuation marks being very different depending on where that loan lives. BDC is going to market here. Some firm is going to market here. Another firm is going to market here. Who's right?”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Well, the interesting thing is that a lot of, you know, we have direct lending where one entity will own the whole loan. And whatever they market at, it's marked. But a lot of private credit, I think I read a stat that 85% of private credit is financing private equity deals. So, yes, you're going to have a situation where a lot of these private credit firms are not going to be all sympathico on where should we should mark these loans. And then the private equity firm itself, you know, those equity, whoever owns those equity slices, will have to see where they market at. So there's going to be divergences on where these marks take place. But I also want to emphasize again about 85% of private credit is funding private equity deals”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“I don't want to downplay this because also part of the pitch is well, the banks are retrenching, so we're going to fill that gap. There is a funding gap that's needed. There's no doubt about it. There's a real estate landlord that needs a loan. There is a business that needs a loan. There is a need for private credit. All I'm saying is right now with the flood of money coming in, with the economy looking very vulnerable, it's just now for me is not the time to own that. Maybe at some point there will be. Maybe coming out of a recession, private credit could be really attractive. But going into one, I'm less enthused.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Credit like risk, and you're senior in the capital structure, blah, blah, blah, blah, blah. And I think to myself, Who is the entity on the other side of that 13% loan? GDP growth is 1.5%, I believe. And who is borrowing a 13%? I want to lend money to that person, that business. You can be seen you're secured, but if there's nothing below you, you're the entire capital structure and your recovery rate is not going to be much. So I'm just worried about the piles of money piling in, promising those returns. a slowing economy and that money being fickle. Because again, a retail client has a much different time horizon regardless of what they say, have a much thinner skin than that endowment, insurance company and pension fund, which were the historical investors in private equity because their time”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Yes, it saves them, it's smart for Black Smart to have that covenant, call it. It was 2% a month maximum of 5% per quarter that you can redeem. But it doesn't stop the problem of constant redemptions. And if the economy rolls over and the real estate portfolio starts to generate less rental income, well, they're buying less properties. They're having to issue shares in lieu of actual preferred return dividends. Like it becomes self-fulfilling in a way. And yes, Blackstone can control those redemptions via those gates, but it does alter the entire strategy. And you can imagine with the private credit side, I get probably five to ten private credits. Emails every day”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Wow, and just to explain that for the audience. So in 2008, obviously on the asset side, horrible quality loans that were made, but a real problem was they were funded with short-term money and in the wholesale money market and banks could pull their money at any time. And that's what they did. An advantage of the private market space over the past 20 years, and it has been branded as such, is you don't have that. It's not being funded with, you know, money that could be pulled overnight. It's financed with long-term money. You're saying that now that's no longer the case or it's less becoming the case and it is being financed with money that can be pulled. But tell us about those gates because on the Blackstone real estate product, B-RET, clients are pulling the money, but it's being gated. There's a redemption limit. Wouldn't that save them? Because if Lehman Brothers had a redemption gate, they probably might still be here, right?”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I thought maybe I would hold it for seven years. I know it's only seven months later, but can I have my money back? To me, that is a huge, massive risk if interest rates stay high for a while and it eventually puts us into recession, which I think it will.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“The retail investor, that fickle retail investor, instead of long-term money, which was an endowment, an insurance company, a pension fund that can say to Blackstone, here's my money for 10 years, call me back in year nine ahead of year 10. That retail investor is much more fickle. And I think that's where private equity, private credit made a mistake. They started to tap into fickle money for illiquid assets. And that imbalance, I think, is going to get exposed. It has started to with Starwood property and the gates that they had to put up. We saw obviously with BREP, but that is a major worry of mine is all those wealth advisors start to get calls. Oh, I'm worried about that private credit investment.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“And a similar question was raised to the table, and I raised my hand and I said, what's a potential canary in the coal mine here? And I said Blackstone. And I said that because number one, with higher interest rates relative to 15 years of zero, the economics of that business is much different. The returns on that investment in terms of what they make is much different. And the illiquidity issue, and we talk about BRIF, for example, of owning illiquid assets With your financing stream. Being able to take their money out with limits and gates whenever they want. And if we go into recession, Which I think we will Now that private credit, private equity has become so reliant that”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Helpful either. So I think there are parts of the economy where they're going to directly impact. And most of the economy, they're not going to impact. Spending wise, they'll both be the same because the entitlements, defense spending, and interest expense are only going to go up regardless of who wins. So the debate and the discussion of when does all these debts and deficits actually matter? That's not going to change that debate depending on who's going to win. Either president potentially is going to have to face that.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Needs to focus on because Medicare and Medicaid dominate the healthcare industry, he needs to focus on who's going to be the next president because of how policy will be affected. If Trump wins, I need to be focused on what kind of tariff battle are we going to have? What's that going to need for inflation? What's that going to mean for manufacturing? Trump's tariffs sent U.S. manufacturing into recession in 2018. It killed off thousands of trucking businesses because there was less stuff moving around. But on the other hand, if Trump wins and he's able to extend the corporate tax cuts and, well, he's going to because that's permanent. The income tax cuts, well, that'll be good, I believe. Because who wants higher taxes? So now Biden didn't put on any tariffs.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Think if Biden or Harris is against Trump, Trump wins hands down. If it's a Democrat other than Biden and Harris, it's going to be much closer and it's a coin toss. I think from an investor standpoint, There are only a couple things that I'm focused on. We have a healthcare PM here”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“The US and Europe, have you seen any attempt at trying to deal with all the success of spending and blow outs of debts and deficits? Absolutely not. Yes, we're all suffering from the same disease, but the Chinese are trying to manage through this, while the rest of us are not. And we're just still driving that truck at very high speeds down an icy road, wondering whether we're going to get into an accident. Potentially we will, but it hasn't happened yet.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“And their local governments are choking on debt. So the world is suffocating in debt. It's just a matter of what shell you sort of stick that debt under. So I agree. Now, China is trying to address this debt. They've obviously tried to address it at the residential developer side as we discussed, but they're also trying to address it at the local government side. And they're trying to be more transparent. They're telling these local governments, you got to bring all this debt on balance sheet. And if you do, you know, we'll help you out. We'll let you term out your debt like Greece did in 2011. Yeah, you got a lot of debt, but we're going to term it out for the next 50 years. So they're trying to deal with this.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So that is a very important point for two reasons. In order to buy back stock, in order to pay a dividend, you have to generate free cash flow, assuming the companies are not borrowing money to do that, which in today's capital markets in China, they're unlikely doing. They have to do that through cash flow. So we as well, if we're going to invest over there and take the risks, you have to invest in companies that are generating free cash flow that in the meantime are paying you back in some way. So that was a great point.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So they're dirt cheap as well. And the interesting thing about those names is their growth rates going forward are not in China. It's the rest of Asia. So it gets back to my growing Asia story. Again, half the world's population for 10 cent and Alibaba and Pindua Duo and JD. I mean, there's an entire region of the world that our customers are there. There's potential customers over there. So I find those names also highly attractive.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“The stock market has already to me discounted a lot of this distress. I mean, well, the Shanghai composite is still 50% below its 27 high. The Hang Sang has just gotten destroyed. At its lows, it was trading at eight times earnings with a 4.5% 5% dividend yield. I could argue that the markets have discounted a lot of this stress.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“It is the lowest in decades and the lowest I've ever seen. Going back the last call 30 plus years. So there is a credit crunch and that also has to do with the distress in residential real estate and less demand for loans. There's a credit crunch going on in China. I don't want to discount the situation there. Banks are going to get hurt. There's going to be distress. But I guess my point is that we're already in the process. We're already trying to When I say we, they're trying to get through this process. And it's going to be a drag for what? But it's going to be a drag. There's no doubt. I don't want to cherry code this.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So the Chinese banks, that's also another debate. The assets in the Chinese banking system is enormous. It is like 2x, 3x GDP. Compared to when the US at its peak, it was just this much smaller percentage. Yes, we have to focus on the exposure of these Chinese banks, but because they're state owned, The state is going to back us. Problem with all these issues with the Chinese banks is going to be just more of access to credits going to be tough. We just saw Chinese loan data and it shows a continued slowdown in the pace of loan growth. M2 money supply grew 6.2% in June. I have data going back to the 90s and it's never been this slow.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Been experience on the developer side, you know, and again, the subprime bubble in the US in 2008, a lot of the leverage was taken on by people who are buying the homes and those loans were made by banks. This time the leverage was taken on by the builders of the apartment buildings, Evergrand, Country Garden and the like, Evergrand has gone bust. But the loans are still made by the banks. And so I haven't been paying that much attention to if the Chinese banks taking losses on these loans, because presumably if you lend, I think Evergrand had hundreds of billions of dollars of debt, most of which, as you said, went bad, you know, is collateralized by the building, but at the building went down in value, then you're not getting 100 cents on the dollar back. I mean, do you own any Chinese banks? Let me put it to you that way.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“20% off in an already existing home, those sales are actually doing okay. So just as like the Indians like to buy gold, the Chinese still like owning real estate. And they're dealing with some pain right now, but there's still demand. There's still a massive amount of urbanization that still is going to take place. So I guess my point is that there are many years, a few years into this, that a lot of pain has already been experienced.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Amount of financial pain that has taken place in the Chinese residential real estate market. We're years into this process. Now, yes, it can continue to be painful from a wealth effect standpoint. No doubt about it, that could last a couple more years. I can't discount that. But from the residential developer standpoint, China has tried to rip the band-aid off. And it's extraordinarily painful, but they're well into this process. And the interesting thing is that the discounting that's going on in residential real estate is actually existing home sales in China is actually doing okay. I specify existing because the Chinese home buyer or real estate buyer is still reluctant to buy that project that's only half built because they don't know if it's going to get finished.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Well, as long as G is in power, that geopolitical risk is with us every single day. As long as he is in interest of taking over Taiwan, we don't know how he'll do it kinetically or not, there is geopolitical risk. But he can drop dead tomorrow, and China decides, you know what? We're going to go back to a more pacifist approach. We don't care to take over Taiwan. We want to embrace capitalism and the free market again, like what worked for them over the prior 30 years to Xi taking power. On the residential real estate side, we are multiple years into this distress. We have seen the biggest real estate developers in China go completely bust with evergrand being the perfect example, where the equity holders have been wiped out, bondholders have been wiped out. There has been an extraordinary”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“That will benefit from that because don't count China out economically speaking. We'll have to see where the geopolitics go, but their political problems there, we're all screwed.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Exactly, and there's a huge market for that in the emerging world. So now I'm not a G fan. I understand the authoritarian nature. I am as libertarian capitalist as can be. So I have to sort of reconcile that when I look at China. But the amazing thing that I see about China is that there's still this incredible entrepreneurial culture. And people that wake up and work hard every day. And it's a shame that they're suppressed by this government and what goes on there politically. But it's, like I said, it's not going to stop this middle class from expanding. It's not going to stop the rise in the middle class and the rise in per capita income. And you can play China's growth, not just not by owning a stock in China. Like I said, you can own a company in Japan that does business in China.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Not only of Chinese traveling outside the country, but through a visa program, more people traveling to China. China spent $250 billion in 2019 in international travel. That consumer is now traveling again. If you look at manufacturing, China is still the manufacturing powerhouse of the world. And yes, they've experienced a recession in that area of the economy like everybody else. They're probably going to do less business with the US and Europe because of all these tariffs, but China's trade with the emerging world is growing by leaps and bounds. Okay, US, you don't want my EVs? Okay, you don't want my EVs? I got the rest of the world to sell my low-cost, higher quality EVs to.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So, residential real estate, obviously under distress from the developer standpoint. Prices are falling, which then impacts sort of the wealth effect for the consumer since a lot of consumer wealth is tied up in it. But on the other hand with the consumer, there's a very high savings rate. Just as we did in the US, consumers have shifted their spending from goods to services. I'll mention Macau again, the visitor numbers in Macau are still very good, domestic travel in China is above where it was pre COVID, international travel is now growing”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“The Hank saying after a recent rally is up about 7.5%, it's beating the equal weight SP, but it's certainly lacking the market capweighted S&P.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so if that happens, we're all screwed. So, I just thought that the bearishness was at such an extreme that the uninvestable Chinese stock market, let's bash China every single day that it just had reached such an extreme that the Hang Sang, which their companies on the Hang Sang that will benefit from growth in Asia, not just China, that that index had bombed out and were long parts of the market there. I mentioned Macau stocks, I mentioned trip.com, also long AIA group, which is one of the largest life insurance companies in all of Asia that happens to trade on the Hang Sang. So I would say that is probably my more controversial idea.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So I came into the year, and it's not working out so far, but not that bad, is that the Hang Sang was going to outperform the S&P 500 this year. And that the level of bearishness on Japan, I'm sorry, on China. Had reached such an extreme. Now, of course, if China invades Taiwan, it's bad for them, but it's bad for all of us. The whole world, the economic world's going to be turned upside down if they do that and we start slapping sanctions. But what do you think is going to happen to the S&P 500 under that scenario? What do you think is going to happen to Apple stock under that scenario?”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“They had initially bad deflation in terms of these bubbles, this real estate and stock market bubble that collapsed, where I should say blew up. That was bad deflation. There's good deflation. Look at technology. History of technology is deflation. That's good deflation. So I guess it also depends on how you define the deflation of some of its bad, some of its good. But when it comes to inflation, to me, higher prices are usually just a tax.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Correct. So, I think the BOJ completely misdiagnosed their problem over the last couple of decades. They printed got so much money and they killed the banking system in Japan and the savings hopes of its aging population all to generate all to raise people's cost of living. To me, their low inflation was more of a symptom of slow growth rather than the disease.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Well, if you're a retiree, you're screwed because your cost of living is going up 3% and your savings is getting your return of 0.1%. So you're in fixed income. You're getting screwed. If you're working in Japan, you're not seeing any progress in your quality of life because inflation is running. Well, right now, inflation is running faster than wages. Wage growth is picking up finally, but it's still lagging inflation. So I'm not a believer that higher inflation leads to... Think higher inflation actually leads to slower economic growth.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“If you're a central bank, you're getting what you finally wanted. If you're a consumer, you're getting screwed. The ironic thing about Japan is if you look at Japan since the bubble peak in the late 80s, early 90s up until a year ago, CPI averaged zero. True price stability. You have an aging population. The last thing you want to see is inflation because it is destroying the standard of living of your citizens. So the fallacy of what the BOJ is wanting to do is they say, let's get higher inflation and then wages will follow. But if inflation goes up two to three and wages go up two to three you're no better off.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“And then, how are you thinking about Japanese inflation, which for 20 years, Japan had the problem of deflation or too low inflation, not stimulative? No one was pricing any growth. Now, Japanese inflation is kicking up to 3%, 2.8%, which is probably a good thing if you've an essential banker in Japan, then you've witnessed deflation for so many years.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Demographically, half the world's population is in Asia. And I think corporate Japan is going to benefit from that in terms of trade.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So, I think this yen rally has more legs to it, so we're still bullish on the yen. Now, what that will mean for Japanese stocks, well, you could maybe get a hit to some of their exporters. But I think a lot of their major exporters like Toyota is less sensitive to changes in the end because they've moved so much production outside of Japan. So I still find the Japanese stock market attractive on a valuation basis, a growing return on equity story, a greater governance story, a greater shareholder reward story. So I find it very interesting. And getting to my thesis earlier about this growing middle class in Asia, Japanese corporate Japan is going to be a big customer base that they're going to be able to sell into on that growing middle class. So Japan, while its economy itself has its own challenges.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“So, the yen is trading at around the lowest level versus the US dollar since 1986. It is by far the cheapest major currency relative to the dollar. It got a huge lift the day that the US reported CPI because we basically locked in a September Fed rate cut. At the same time, we're a few weeks away from the BOJ raising interest rates and widening yield curve control.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“About 75% of their stores happen to be in North America, 25% are in Japan. Now the ratio is not exact. There's a little less than that on either side because they have locations elsewhere, but they plan on adding 50,000 7-Elevens over the coming years in other parts of Asia and into Europe. So there's a growth story there. They just miss numbers because they're still highly sensitive to the U.S. consumer. We talked about the consumer early on. 7-Eleven's business has been negatively impacted by the U.S. consumer. It was a way for me to also get along the end because it was a USADR.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“We've also long a Japanese bank Sumitomo Mitsui Financial, that was on the BOJ finally getting out of negative interest rates and widening yule curve control. And my most recent purchase, which hasn't worked out as of yet, is Seven and I Holdings, which owns the 711 brand. In Japan?”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so we've been long in Japan. Luckily, we're long one Japanese ETF from Wisdom Tree that hedges out the yen, so we've benefited fully from the rise in the NICA.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“It's actually a particular ETF that we like that benefits from more volatility in the bond market and a steeper yield curve and potentially higher inflation.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT
“Right, as we saw at the end of 2023, when the short end priced in six cuts that didn't end up happening, the Fed did no cuts and the markets obviously adjusted to that.”
2024-07-15 · Forward Guidance · Peter Boockvar on an Overheated Stock Market, China’s Green Shoots, and the Private Credit Bezzle · IDENTIFIED FROM THE TRANSCRIPT