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Observing Dalio and Fink’s Conference Viewpoints

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viewpointThe DealBook conference held in New York City had financial and political luminaries on stage. Laurence D. Fink, the Chief Executive Officer of BlackRock Inc., during the conference stated that stocks may decline as much as 15% percent due to political risks in China, Japan, France and the United States. To top things off, Fink believes stocks can return more than 7% in the long-term under the assumption that the global economy grows at 4%. Fink believes that if investors are already 100% into equities, they should keep their money there. Fink is banking on a more resilient U.S. banking system, improving real estate market and America’s mega supply of natural gas.

Ray Dalio, the Founder of Bridgewater Associates LP, expressed a less positive view saying that equity returns will slow to 4% annually in the next decade. Dalio added some more bits of data, mentioning the Federal Reserve will not be able to raise interest rates for years. Dalio mentioned during an interview at the conference that most investors are not going to be able to produce alpha – saying alpha is a zero sum.

Institutional investors are concerned that quantitative easing (QE) policies are losing their effectiveness in reviving economic growth. Since interest rates hit zero percent, QE effectively replaced changing interest rates. The Federal Reserve’s purchasing financial assets has less of a material impact on the real economy.

SWFI First Read, September 19, 2018

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QIA Eyes Investment in Chinese Lender Lufax

The Qatar Investment Authority (QIA) is in talks about a possible investment into Shanghai-based Lufax, one of China’s largest online lenders. The seller of the possible stake is China’s Ping An Insurance (Group) Co. Ltd. Lufax’s official name is Shanghai Lujiazui International Financial Asset Exchange Co. Ltd.

Wealth Funds Back Hotpot Giant

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Japanese Government Capital Provides Initial Life for Texas Bullet Train

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Dallas-based Texas Central Partners, LLC is the developer of a proposed high-speed rail system, dubbed the Texas Bullet Train, between Dallas and Houston. Project costs are estimated between US$ 12 billion to US$ 15 billion. The developer secured US$ 300 million in project loans from Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN) and the Japan Bank for International Cooperation (JBIC). [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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DOJ Investing Tesla Over Musk Comments

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The U.S. Department of Justice (DOJ) is conducting a fraud investigation over Tesla as its CEO Elon Musk made public statements on twitter. This is a criminal probe. In addition, earlier, SWFI reported the U.S. Securities and Exchange Commission (SEC) is conducting a civil inquiry into Elon Musk regarding his statements.

This all surrounds Musk tweeting in August that he was thinking of taking Tesla private and had “funding secured” for the transaction. Both government authorities are seeing if Musk misled investors and violated federal securities laws with his public statements.

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