HOW TO ESCAPE THE CENTRAL BANK BOOM/CRASH TRAP In today's @markets newsletter, I wrote about our latest podcast with Viktor Shvetz and Seth Klarman's claim that the Fed was "infantilizing" markets, and how there's a grain of truth to what he sees
If Seth Klarman is right about the future dominance of labor over capital, then we'll be seeing lower corporate margins. Earnings growth will turn into treacherous decline. Margins were one of the biggest sources of earnings growth.
Seth Klarman: These companies are like Schrödinger’s cat – both alive and dead at the same time. They are closed for business, the operating model rendered uneconomic, the customers scared away, but their shares tell a story of viability.
Seth Klarman, not everything will mean revert: "At this moment, it’s hard to imagine Amazon’s online business collapsing or J.C. Penney’s retail operations being fully restored. "
Seth Klarman on why he didn't join Goldman Sachs after graduating from HBS in 1982. "the partners were basically 100% male, almost a 100% divorced, almost a 100% fat and almost a 100% bald, and that didn't seem like something to give away your 10 or 15 years.."
So Seth Klarman buys $1 billion in Puerto Rico debt (breaking news from The ). But there's more: Klarman showers pols/candidates w/$2.9 million (per Open Secrets) & stops giving 1 month before Congress passes creditor-favored PROMESA Act.
The investor Seth Klarman is worth $1.5 billion and has $30 billion under management. But he tells that there are things far more important than making money. Specifically: helping the Democrats take back the House and the Senate.