Saturday, July 4, 2015

Rubenstein: NY Billionaire Bubble vs. Greek Pensioner Debacle reported:

Rubenstein said The Carlyle Group is a large investor in Europe but the firm has not invested in Greece in recent years and has no plans to do so now. 
Carlyle's investor class includes public pension funds.  Elderly Greeks have been hit hard by this week's bank closures (BBC).

Reports said many pensioners waited outside branches from before dawn, only to be told withdrawals were being done alphabetically. Many were then asked to return on the following days.

Konstantinos Nikolopoulos, 70, was told by his bank that his pension was unavailable. "They told me they don't know when they will have the money and asked me to come again tomorrow just in case," he said.  "This situation is out of control."
Rubenstein sees a potential bubble in New York real estate:

"I suspect apartments built for billionaires in New York City might be a bit of a bubble. I'm not sure there's enough billionaires to fill all of them."
Billionaires are a growing class in the U.S. and globally.  Contrast their increased wealth with elderly Greeks:

Monthly pensions have gone down to an average of €833 ($924; £594) from an average of €1,350 in 2009
That's a 35% decline in monthly income over the last six years.  For some it could get worse.

Creditors want Greece to quickly phase out a top-up payment it gives to close to 200,000 of the country's poorest pensioners
The global race to the bottom on benefits includes pensions.  While some elderly have family members to support them others are not so lucky.

Zina Ravi, 79, relies entirely on her pension and says she is still in debt every month.  She is one of the high numbers of Greeks claiming a pension - and is having to help a middle-aged son who is now one of many unemployed Greeks.

It's not the right time for The Carlyle Group to invest in Greece.  There's no government to protect Carlyle's PEU investments or provide Carlyle risk reduced ways to make 30% annual returns. Rubenstein believes Greece could change.

The financial betting class voted thumbs down on Greece's government debt.

Current bets have the house wanting big premiums to insure Greek debt.  Watch the vote from Sunday's referendum.  Will Greeks celebrate July 5th as a new Independence Day? 

Update 7-5-15:  "No" voters have the early lead