The United States has “a one-in-three chance” of a double-dip recession, Blackstone Chief Operating Officer Tony James told CNBC Wednesday.
But this “definition of recession here is sort of economist speak,” said James. “One percent growth is going to feel like a recession for most of America.”
But he added that if the U.S. did have another recession it would be mild statistically, because “you can’t fall far if you’re on the ground floor.”
The U.S. economy is “flat, sort of a stalled speed," added James. Blackstone tracks "this pretty carefully. We develop our own proprietary leading indicators. We watch them go from red a couple of years ago, to green, now to white," with white being neutral.
The rest of this year's message will be how to grow in a flat economy, he stressed. “The world is not going to be your friend. You have to be clever to drive growth,” meaning more creative research and development, more reaction to what the customer really wants and taking advantage of growth in emerging markets.
"About half the money we put to work last year went to emerging markets," he went on to say.
In terms of the credit markets, James noted they are "backed up a lot."
"First of all, Europe's pretty much shut down. About the biggest [leverage buyout] you can do in Europe today is about $1 billion dollars [in total] ... and in the U.S. you're going to have a hard time pushing much above $4 billion, with $2 billion of debt," James said.
Commercial real estate in the U.S., on the other hand, has been rallying for most of this year in occupancies and in rental rates, he added.
"But the truth is, in America there's been almost no new building for five years, and there's just no new supply. Even 1 percent growth may only hold unemployment flat because you have 1 percent new people coming in."
However, "you still need space and you still need seats for those people," acknowledged James."
Last year Blackstone increased its 300,000 employment level between 3 percent and 8 percent, he said. The firm's employment base “is a pretty good microcosm" of American gross domestic product.
“If the rest of America has done that, we’d be out of our recession," concluded James.
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