Tags: jeff greene | jamie dimon | lloyd blankfein | donald trump

Billionaire Jeff Greene: 'Irrational Complacency' Everywhere in Davos

By    |   Friday, 26 January 2018 11:02 AM

Jeff Greene, the billionaire real estate investor who once ran in Florida's Democratic primary for U.S. Senate, said investors are too optimistic about stocks and the economy.

"There are 2,000 people [here], and I don't think I've met one person who's been negative," he said in an interview with CNBC from the World Economic Forum in Davos, Switzerland. "Alan Greenspan talked about 'irrational exuberance.' What I'm seeing is 'irrational complacency' here."

President Donald Trump this week brought his “America First” message to the annual meeting, facing a somewhat skeptical audience of elites who are wary of his support for protectionist measures. Trump met with world leaders, attended a reception in his honor and hosted business executives at a dinner, according to the Associated Press.

Jamie Dimon, chief executive officer of J.P. Morgan Chase, and Lloyd Blankfein, CEO of Goldman Sachs spoke approvingly of Trump’s policies earlier in the week on CNBC.

"I think it's possible you're going to hit 4 percent some time this year," Dimon said of possible U.S. economic growth ahead. The first reading of U.S. gross domestic product was released Friday, showing 2.6 percent growth that missed the consensus forecast for 2.9 percent.

Greene said the excessive optimism is worrisome, especially if the economy overheats.

"Everyone just feels that we've got a perfect global economy,” he said. “We're all growing together at 3 percent-plus. Everything is going hunky-dory … That's where the game is over. You get some inflation. You get higher interest rates. What happens to real estate values, the art market? What happens to the stock market, the bond market?"

The S&P 500 stock index's total return is more than 24 percent in the past 12 months, outpacing the 15-year average of 8.3 percent. But company profits didn’t grow nearly as fast, meaning investors paid a higher-than-average price for those earnings.

The Shiller price-to-earnings ratio for the S&P 500 currently is 34 times, compared with the median level of about 16 times. As of last month, the U.S. market had the highest CAPE ratio among the 26 countries that Barclays Bank in London monitors.

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Jeff Greene, the billionaire real estate investor who once ran in the Democratic primary for Senate in Florida, said investors are too optimistic about stocks and the economy.
jeff greene, jamie dimon, lloyd blankfein, donald trump
Friday, 26 January 2018 11:02 AM
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