What Would Zell Do If He Were Ben Bernanke? “Go to a deserted island so nobody could find me when the results of QE 27 come through” answered Sam Zell, Equity Group Investments chairman, smiling and discussing why he believes the Fed chairman’s policies are not working. He spoke about many other topics we have the videos for each.
On Ben Bernanke:
let’s get back to sam zell from equity group investments. we’ve talked a lot about the economy and interest rates and where things are going. i want you to put yourself in the shoes of ben bernanke. if you were ben bernanke, what would you do right now? go to aeserted island where nobody can find me when the results of qe-3 comes through. what would you consider the options now? if you were on the board and go to the meeting and say, ben, this is what we need to do, what would you tell him? stop. stop cold turkey. just think every one of these purchases, every one of these steps is leading to ultimately the question of exit. how’s the fed going to get out of all this stuff and at what cost? in thi think we’re creating the underpinning of a significantly inflationary environment. do you think, sam, the training wheels, if they came off, if the fed training wheels would come off w would continue along the same way, there’s any positive effects from the fed action right now? i’m not sure i understand what you mean by the training wheels. we had an economy that went into a deep recession. we came out and we needed help nor a while. there’s a lot of people that thought we had enough help, the big stimulus package and compare last year, it seemed like t economy is getting some traction and a lot of people are surprised when the fed even ramped up their efforts. do you know something we don’t know in the economy? isn’t an economy supposed to finally exist on itself? they seem to think that it couldn’t. do you think it could? i don’t think there’s any question it could. it has for 200 years. at 8% unemment, that’s not ing — i guess they think as long as there’s people that need jobs, we will stay in there. two years, three years ago mortgage rates were 7% and now they’re 3. have you seen any wild charging to buy houses? no. i don’t know that lowering the cost of capital is necessarily the determining factor. if interest rates were 3% instead of 2%, would that change buyers? i don’t know. the more question is what are we doing rowth in other parts of the economy. are we doing something, a, people say we’re not, we’re just recovering from the crisis. in the next three years in this administration will the economy get back to 3 to 4%? is that possible in spite of what people see as anti-business tendencies from this administration? it’s hard for me to believe we will get back to that kind of growth rate as long as washington continues to have a negative bias towards the business community. in the end, the business community basically is the job creator. ou malign the business