Stocks, Economy at Beginning of Good Times: James

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Sept. 26 (Bloomberg) -- Tony James, president/COO at Blackstone, talks with Erik Schatzker in an exclusive interview about his positive outlook for stocks and the U.S. economy, how big Blackstone can get and offers an insight into Blackstone’s succession plans. He speaks on Bloomberg Television’s “Market Makers.”

I think interest rates are as low as they are going to get.

I am not so sure the stock market does not have a long way to run still.

The stock market is 15 times next year.

For many years, it has been over 20. where else will you put your money?

I think the stock market still looks like an appealing place to be.

So it is not so clear to me that the stock market does not have a long way to run.

The economy certainly has a long way to run.

We have come back, but it has been slow.

Picking up speed and i think it has further to grow -- go.

I do not see the good times coming to an end for some time.

I think europe is stabilized and should be coming back a little bit.

China seems to have found its footing and getting stronger.

Same with brazil.

Commodity prices are restrained.

We have a massive energy dividend.

We have constructions starting at home that we can add to the economy.

We are still at the beginning stages of good times.

Does it help to have money flowing in?

There are a lot of boards that if they worry about anything, they worry about the activists.

It is not so much causing merger and acquisition activity generally, but causing american businesses to be pretty sharp.

Having an interesting effect on the economy.

They are holding management accountable in a way that would not have been true 25 years ago.

Is that a business we can ever say blackstone getting into?

I do not think so.

Five years ago -- five years from now, how could it be?

Could ever be a trillion dollar firm ? hard to see today.

Bank of america has more than 2 trillion.

Our businesses around the liquid businesses are smaller.

We are trying to find runoff idiosyncratic investments.

We will never have those kinds of institutions, nor do i want it.

Them of those that have come blackstone's way and the other firms have been the result of an exit by those very same banks.

Either because they were deleveraging or raising capital or because of the capital requirements.

Is that still happening?

Which opportunities are still there?

That is still happening, and more than just that.

Used to be the hedge funds also had side pockets.

Again, with the meltdown and people wanting their money back, the hedge funds not able to meet the redemptions are for the most part gone.

Those things have created a vacuum for a a lot of oddball assets that do not fit naturally in any of the big funds.

We have set up two large funds.

One reason and one 4.5. all kinds of interesting things.

Spectrum, royalties, physical assets mortgage servicing rights.

All kinds of things i do not fit anywhere else.

That has been our most active and best thing area and the returns have been spectacular.

Lacks down -- blackstone, just like every other in the business, at some point will face the need for generational position.

You have been running the firm for about 10 years.

At what point does blackstone think about taking the lead?

Blackstone has been through succession.

Some of the other firms you mentioned have not.

The senior founder of blackstone, pete herder said in -- pete peterson no longer involved at all in the firm.

He brought me in and that was a courageous thing to do and it worked out for both of us, i hope you think so.

We are up public company.

We have been through this.

We are on our third head every with tape -- real estate.

So i think we have a lot of experience with succession ended the management team.

Every single position of blackstone, whether it is mind or steve or any of the group heads, we have a succession plan and succession plans for their successors.

I think we are blessed by having fantastic heads that are young.

Head of real estate is 42. head of private equity is 42. head of strategic earners in his early 40s. goes on and on.

Lights what about you?

-- what about you?

You have artie built in one -- have alredyady built and run one firm already.

I love my job and i have the best job in the world.

What i worried about in a got out of college was not being able to use my creativity.

I would be very careful were reluctant to let that go.

I am stretched every day and can be created and people listen to me.

You have been running nonstop since 1972? that is true.

It would take a job where i could use all of my brainpower.

I do not have ego needs and financial needs, but if i thought i could do something good for the world, i might consider that.

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