SOLD. You know who's on the other side of the trade when you buy Blackstone? I rather not take the trade.
Blackstone is essentially a REIT. If you look at their income, which is admittedly huge, the OVERWHELMING majority of it is CONCENTRATED in and DERIVED from real estate holdings. If you want to know when Blackstone will hurt, look no further than to the office and commercial real estate markets. There will always be cycles in these markets.
Quite possibly but there remains a small chance for a run to S&P 1510-21 if the old high near 1460 can be regained. Normally this would be near impossible but with the Blackstone IPO and Quarter End this next week, I wouldnââ¬â¢t bet too heavily against the Establishment. Downside remains 1350-1310. Here's what I find contradictive. The huge leveraged buyouts and mergers seem to demonstrate plenty of money around to speculate with, and yet two of the biggest most successful hedge funds have now decided to raise money through public IPOââ¬â¢s. you donââ¬â¢t borrow short to lend long. In other words you donââ¬â¢t borrow through 30-day commercial paper to fund a 30-year loan. These hedge funds have done exactly that having leveraged up their balance sheet with borrowed money, derivatives, and big politically active investors who can redeem their capital on 90 days notice. These funds must go public and sell while the money is still there. So last weeks rebound, was it the FED statement that led to a great 170 point Dow rally for Forty Minutes on the 21 or was it the putting a huge buy program on by shorting 20-30 thousand each of the 138 & 140 SPDR puts and buying 143 calls. I wonder who did that? That made everyone warm and fuzzy for a New York minute..err..40 minutes. This next week is the quarter end and year-end of several of the worldââ¬â¢s biggest mutual funds. At quarter end (and December 31st, year end) they legally canââ¬â¢t sell much since their SEC filed prospectuses show most all of them to be long term investors and not market timers so they need to show less than 5% cash balances on March 30th. The first of April, however, could see a rush to raise 20% cash, as the next public statement of cash levels wonââ¬â¢t be until June 30th. What will be happening next isn't hard to figure out. Monday 26 Market up 27 D 28 D 29 D 30 D 7.02.07 D 03 U 04 D 05 D 09 U 10 U 11 U 12 D 13 D 16 U
This is the entire problem with public equity markets. Thier raisonne d etre is as much the need for capital funding as the desire for an open spigot of cash for the original shareholders and the officers. The stock market has become an enormous wealth transfer mechanism, from the many to the few.