Apollo's Chief Economist, Torsten Slok, shares insights on the current banking crisis, stubborn 5% inflation, rising recession prospects, potential real estate subprime crisis, the Fed's role in inflation, and Danish optimism vs economic pessimism.
The current banking crisis and the potential shift towards a mutual fund banking model with equity finance discussed by Thorson Sloke.
Insights on inflation rates, Fed policy, and the Federal Reserve's role in balancing inflation control with economic growth dynamics.
Apollo's unique focus on private asset investments, financing strategies using external sources like annuities from Athene, and management of private credits, equity, and real assets.
Deep dives
Thorson Sloke's Background and Career Progression
Thorson Sloke, the chief economist for Apollo, shares insights about his background, academic journey, and career path. He expresses gratitude for the opportunities that have shaped his success, from obtaining his PhD at the University of Copenhagen to working with esteemed professionals like Michael Bordeaux and Barry Earten Green.
Apollo's Role in Private Asset Investments
Apollo distinguishes itself as a key player in the realm of private asset investments within the financial sector. With approximately $550 billion in assets under management, Apollo focuses on private credits, private equity, and real assets that are not publicly traded. This strategic emphasis on private assets sets Apollo apart in the investment landscape.
Financing Structure and Liability Management at Apollo
Apollo's financing relies on external sources, particularly annuities from an insurance company called Athene, which provides long-term financial stability. The investment decisions at Apollo are a blend of equity and debt finance, with around $400 billion in private credit, $100 billion in private equity, and $50 billion in real assets under Apollo's management.
Discussion on Banking System Evolution
The conversation delves into the evolution of the banking system, contemplating potential shifts towards a mutual fund banking model with equity finance. This transition reflects a move away from heavily leveraged financial intermediaries toward a more equity-based approach, fostering financial resilience and growth.
Inflation, Fed Policy, and Economic Outlook
The discussion covers various facets of inflation, Fed policy, and their implications on the economic landscape. Insights suggest that while inflation rates may be currently elevated, they are expected to moderate over time. The Federal Reserve's approach to balance inflation control with economic growth dynamics like employment and financial stability remains critical for navigating the evolving economic landscape.