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Trump’s infrastructure plan 'fake fiscal news’?
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Pelle Svanslös
Jul 3, 2017, 5:03:39 PM7/3/17
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Short seller Jim Chanos recently explained why President Donald Trump's
infrastructure spending plan will not lead to big economic growth
because of the way it is structured.
Chanos is founder and managing partner of Kynikos Associates, one of the
largest short selling investment firms in the world. Chanos is lauded
for his prescient negative calls on Enron and Tyco.
"That's just another sort of fake fiscal news, if you will. It's going
to be public-private partnerships," Chanos said.
"Because private investors need high rates of return, these deals
generally haven't been good deals for anybody. ... We're told that the
private sector will be able to do this better. Well, they might be able
to do it better and faster, but only for a small number of projects," he
added.
The investor cited his experience with Macquarie Bank, a company he was
short in the past, which was a pioneer in infrastructure as an asset
class trend. He noted the company only focused on projects with "clearly
definable cash flow" such as parking structures and toll roads.
"Real projects that we need — repairing, refurbishing, whatever — are
tougher. You're not going to get private investors to sign up for those
without definable cash flows," Chanos said. "It's something that sounds
good but when we actually start looking at projects that make sense for
private investors leveraged up with state-backed or federally-backed
bonds to do a project, we're going to find that it winnows down the list
dramatically."
The White House website said Trump's infrastructure plan will rebuild
U.S. cities and states by "unleashing private sector capital." The
proposal will leverage $200 billion of government funds into $1
trillion, according to the page.
In addition, Secretary of Commerce Wilbur Ross co-wrote a white paper in
Octobver 2016, when he was a senior policy advisor to the Trump
campaign, which said "for infrastructure construction to be financeable
privately, it needs a revenue stream from which to pay operating costs,
the interest and principal on the debt, and the dividends on the equity."
http://www.cnbc.com/2017/07/03/jim-chanos-calls-trumps-infrastructure-plan-fake-fiscal-news.html
infrastructure spending plan will not lead to big economic growth
because of the way it is structured.
Chanos is founder and managing partner of Kynikos Associates, one of the
largest short selling investment firms in the world. Chanos is lauded
for his prescient negative calls on Enron and Tyco.
"That's just another sort of fake fiscal news, if you will. It's going
to be public-private partnerships," Chanos said.
"Because private investors need high rates of return, these deals
generally haven't been good deals for anybody. ... We're told that the
private sector will be able to do this better. Well, they might be able
to do it better and faster, but only for a small number of projects," he
added.
The investor cited his experience with Macquarie Bank, a company he was
short in the past, which was a pioneer in infrastructure as an asset
class trend. He noted the company only focused on projects with "clearly
definable cash flow" such as parking structures and toll roads.
"Real projects that we need — repairing, refurbishing, whatever — are
tougher. You're not going to get private investors to sign up for those
without definable cash flows," Chanos said. "It's something that sounds
good but when we actually start looking at projects that make sense for
private investors leveraged up with state-backed or federally-backed
bonds to do a project, we're going to find that it winnows down the list
dramatically."
The White House website said Trump's infrastructure plan will rebuild
U.S. cities and states by "unleashing private sector capital." The
proposal will leverage $200 billion of government funds into $1
trillion, according to the page.
In addition, Secretary of Commerce Wilbur Ross co-wrote a white paper in
Octobver 2016, when he was a senior policy advisor to the Trump
campaign, which said "for infrastructure construction to be financeable
privately, it needs a revenue stream from which to pay operating costs,
the interest and principal on the debt, and the dividends on the equity."
http://www.cnbc.com/2017/07/03/jim-chanos-calls-trumps-infrastructure-plan-fake-fiscal-news.html
calim...@gmx.de
Jul 3, 2017, 5:26:04 PM7/3/17
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Really? You are being sarcastic, I hope ...
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