Billionaire, David Rubenstein, Says Nobody In US Knows How Bad The Economy Is
Speaking to a global audience via the FT’s ‘Global Boardroom’ event, David Rubenstein, billionaire Co-Founder and Co-Executive Chairman, The Carlyle Group believes nobody in the US knows how bad the economy is currently, or how long the impacts having 30 million Americans out of work will be.
Just how bad is the US economy and how bad will it get? Rubenstein didn’t mince his words when speaking with Gillian Tetthair, Editorial Board, and Editor-at-large; “I think nobody in Washington, or in New York or any part of the United States, really knows how bad the economy is, because we don’t know when we’re going to come back out of the shutdown and people are going to go back to work, go back to school. Right now, the economy is as bad as anything I’ve seen in my lifetime of course and not since the Great Depression have we had numbers as bad.”
Speaking about timelines, Rubenstein is talking years and not months for some semblance of changed normality; “So I think, opening up the economy doesn’t guarantee, and all of a sudden, we’ll get the GDP back to where we want, and all of a sudden, every restaurant will be open fall and every, every movie house and concert hall LIFO. It’ll take a while to reopen this, I suspect at least a year, or maybe a year and a half before you get back to anything close to what we have, before this happened.”
Estimating that the GDP for the second quarter might be down as much as 20% from the previous quarter, (which was down 4.85% from the previous quarter of that quarter notes Rubenstein), Rubenstein is somewhat bullish on the rebound; he’s just not sure what will rebound “It’s not good. But, you know, we’ll soldier on and I don’t think the world will fall apart, but there are a lot of a lot of suffering is going to occur and there were a lot of deaths that’s going to occur, and have already incurred. But I think the economy will come back at some point I just think it’ll be a different economy that comes back.” said Rubenstein.
What would he invest in? Rubenstein isn’t backing the media industry and nor does he believe there will be a technology created during this time like Bitcoin was in 2008. Instead, Rubenstein suggests doubling down on industries at the bottom like hotels and entertainment-related industries. His best advice is to ‘stick to what you know” and not to start speculating.
Politically speaking, Rubenstein has worked with and interviewed White House administrations over many decades. Again, he didn’t mince his words and believes a bad economy is bad for Trump and that both camps will be planning the term after the first one now and not when they get into office. Rubenstein did caution any speculation saying; “We should recognise that three months ago President Trump was seen by many people as having a pretty good chance that we’ll be elected, three months from today, he might be seen the same, right now it’s a difficult thing for anybody to get reelected in this situation, but I wouldn’t underestimate his ability to get reelected because you can never predict exactly what going to happen with presidential elections.”
Rubenstein was also bullish on tech stocks, Amazon and telemedicine before ending with two of the leaders he most admired – Winston Churchill and Abraham Lincoln.