A lot of people say a lot of things when markets get volatile. It's something of a parlor game to tailor a hot-take so scintillating yet digestible enough to make the shakers take notice of your opinion and then move things in your favor.
Volatility also begets media visits from the bold-faced names of Wall Street. And while they usually couch it in some kind of other reason (usually "a favorite charity") the biggest CEOs will always make their ways in front of a camera to pitch their reality book when things get scary. So it was hardly a surprise when Steve Schwarzman appeared on Squawk Box this morning and made Joe Kernen pretend for 7 minutes that he gives a solitary shit about public school funding. What did give our brow a raise however was The Schwarz's myopically tone-deaf choice of phrasing when he ultimately pivoted to talk about what he came to talk about...
Worries about the Federal Reserve hiking interest rates more aggressively to combat rising inflation should not overshadow the benefits of stronger economic growth, the billionaire co-founder of Blackstone Group told CNBC on Thursday.
"I think our growth is going to continue. And markets will move around with some volatility," Steve Schwarzman said on told "Squawk Box."
Try not to faint from shock, but the guy who made $1 billion last year and metaphysically held Trump's wrist when he signed a tax reform bill that benefits private equity billionaires like Steve Schwarzman in a comically unsubtle way, thinks that things are going to be just fine. And while the CEO of Blackstone should be going on TV to tell everyone to ignore the smoke and keep partying, he should also be careful about how he does it...
With economic growth and inflation on the rise after years of historically low levels, bond yields have been spiking and putting pressure on the stock market. When bond yields rise, investors often start weighing whether stocks are the only game in town for return.
However, Schwarzman encouraged investors not to lose sight of the big picture: "We have to look at what's going on in the world; the real world, not the markets."
Hmm, "the real world?" Is that the best place for Steve Schwarzman to posit a theory? We understand that he is speaking more in terms of macroeconomic realities that can't be changed by quants shorting VIX, but "the real world" has a pretty broad meaning these days and that CNBC camera has a glowing red light on it, so treading lightly would be the move here...
The stock market got ahead of itself in January, so the early February pullback was not out of left field, Schwarzman said. "When you go up 7 or 8 [percent] in the first month of the year, you have to imagine compounding that rate in the 80s or 90s."
"Markets get ahead of things and markets get behind things," he argued. "The real world looks like it's in fine shape at the moment."
If you're a Yale-educated Wall Street icon worth about $13 billion who is also a senior private sector advisor to the Trump White House, lives a notoriously ostentatious personal life and ostensibly just went on TV to talk about high school education, maybe don't fucking say that "The real world looks like it's in fine shape at the moment" when wealth inequality is at its highest rate ever, the middle east and Asia are riven with global conflict, American politics are at a dangerous level of partisan rancor and there are 17 body bags in a Florida high school.
Are we being unfair to Schwarzman since he was almost certainly just trying to talk about the economy? No...and shut up.
Whether he likes it or now, The Schwarz is a public figure, and he just attempted to use the power that comes with that notoriety to quell a market that he prefers to see acting like he wants it to. So when he doesn't choose his word carefully, he opens himself up to this kind of criticism. The "real world" - or as much of it as Steve Schwarzman cares to actually emotionally engage with - is a fucking mess, and he knows that quite well. He went to Davos last month and took every opportunity to get near a live mic or camera and manually pleasure Trump's ego. It's impossible to go to Davos and not hear at least a few crunchy European billionaires drone on about Syria, African pandemics or the existential threat of Brexit. And Steve also lives in New York City, so he's vaguely aware that this White House is not exactly sailing along on the seas of victory.
Steve is also apparently aware that wealth inequality is an issue since he talked about it during the very same CNBC appearance as part of his rap on how wealthy people should be giving money to public schools. That sense of grasping "real world" problems was somewhat muted by the reality that Steve himself has chosen to give $25 million to his alma mater, a well-performing high school in an affluent Philadelphia suburb. While we are loathe to talk shit about anyone writing a big check to a school, it's pretty peak Schwarz to talk about wealth inequality and then write a check to a school district with a median income of $70K.
Steve Schwarzman isn't going to stop being Steve Schwarzman, why would he? So he's not going to stop going on CNBC and offering market commentary. What he should stop doing altogether though is making any comments that involve "the real world." That should be left to people who perhaps have the faintest fucking clue.