Wall Street executives who attended the annual Riyadh meeting mostly demonstrated a wary attitude and apprehension for the coming year. Harvey Schwartz, the CEO of Carlyle Group, insisted that there were still profitable prospects even amid the presence of high interest rates and international strife.
At the Future Investment Initiative in Riyadh, Saudi Arabia, many of Wall Street's biggest players discussed the risks and potential for investors and the global economy. The bankers agreed that, in the short term, there are numerous headwinds to contend with, such as wars, an economic slowdown, and high inflation and fiscal deficits. Carlyle Group CEO and former president of Goldman Sachs, Harvey Schwartz, was asked about the risk outlook. He urged caution but pointed out that there are still alpha opportunities to be had. He attributed the shift in rate regimes to the heavy Covid-19 stimulus that caused inflation to surge, and noted that the resulting increased credit risk makes it harder to borrow. He also stressed the importance of remaining liquid in times of war, as it is the best way to prepare for any unforeseen circumstances.
I believe that you ought to consider this when evaluating your risk exposure... If you are comfortable with taking greater risks, then one approach might be suitable, but if you are more risk averse, you should be ready to deal with outcomes that are more turbulent and difficult to predict. At the same event, JPMorgan's CEO Jamie Dimon discussed the current threats such as the threat of nuclear weapons and armed conflicts, along with the substantial budgetary deficit in the United States in peacetime. Bridgewater's founder Ray Dalio showed concern on the global economic conditions, showing that rising disparities in wealth together with increasing divides in society form a major obstacle.
Schwartz conveyed his optimism regarding the future, citing multiple motivating factors such as advances in health, technology, and Artificial Intelligence. He acknowledged the importance of large investments, brilliant leaders, and international partnerships as essential for realizing the potential of these drivers. He went on to express his enthusiasm about the opportunities present in Saudi Arabia, linking this to his earlier statement.
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