Fed Dead Redemption! Blackstone’s $69 Billion Real Estate Fund Hits Redemption Limit (Equity REITs DOWN -23.6% In 2022, Mortgage REITs DOWN -28.6%)

Confounded Interest ^ | 12/03/2022 | Anthony B. Sanders

[Kaiser8408a]

As The Federal Reserve continues its assault on inflation by raising their target rate, Blackstone Inc.’s $69 billion real estate fund for wealthy individuals said it will limit redemption requests, one of the most dramatic signs of a pullback at a top profit driver for the firm and a chilling indicator for the property industry.

Blackstone Real Estate Income Trust Inc. has been facing withdrawal requests exceeding its quarterly limit, a major test for the one of the private equity firm’s most ambitious efforts to reach individual investors. The news, in a letter Thursday, sent Blackstone stock falling as much as 10%, the biggest drop since March.

You can see the problem facing commercial real estate. Since December 31, 2021, NAREIT’s all-equity REIT index has fallen -23.6% while NAREIT’s mortgage REIT index has fallen -28.6%. It looks like Blackstone’s Real Estate Income Trust has a decline coming.

If I look at NCREIF’s commercial property index, we can see that The Fed helped boost CRE values. But what will happen if and when The Fed actually shrinks its balance sheet.

I call The Fed’s attempts at cooling inflation “Fed Dead Redemption” since it resulted in redemptions from real estate funds.

[Kaiser8408a]

Biden/Pelosi/Schummer's insane green energy policies and reckless Federal handouts have created mayhem in markets.

[SaveFerris]

BidenDepression II 2023

Obama’s death to the USA by 10,000 cuts

[PGR88]

Who will be the Long Term Capital Management or Lehman Brothers of the next crisis?

The crypto bankruptcies are just an appetizer. Who on Wall Street will be the main course?

[SaxxonWoods]

This is nothing. The fact that the economy refuses to slow down after multiple .75% rate hikes is the big news right now.

[Soul of the South]

“The crypto bankruptcies are just an appetizer. Who on Wall Street will be the main course?”

The federal government under President George W. Bush in 2008 had a decision to make regarding the “too big to fail” Wall Street investment banks. The government could have allowed them to go into bankruptcy restructuring (like the airline industry went through in the 1990’s and early 2000’s), paid off the depositors of any liquidated banks up to the FDIC limits, and let the bondholders, stockholders, and executives incur the losses. Second step reinstall the Depression era Glass Steagall law which separated investment banking from retail banking and kept investment bankers from speculating with retail accounts. Then begin enforcing anti-trust laws to keep the big New York banks from buying up regional banks and thereby becoming “too big to fail” in the future. If the investors, bondholders, and executives had absorbed the financial loss, instead of the taxpayers, future investors in banking and investment firm stocks and bonds would have been extremely demanding that the banks be financially sound. Government backstopping of businesses is an incentive for taking on risk, not an incentive to manage assets conservatively.

The second option was to bail out the big banks. This is the option President Bush, his Goldman Sachs treasury secretary, and the Federal Reserve chose. Within a year the bailed out banks were paying multimillion dollar bonuses to executives and easing back into the activities that resulted in failure. In addition, Wall Street financiers gave heavily to Democrat candidates in the 2008 election to ensure government had their backs.

It is beginning to appear that our failure to allow capitalism to work and sweep away the bloated insolvent firms in 2008, will result in another financial crisis caused by greed, excessive risk taking, and payoffs to politicians. Both political parties are completely complicit in the coming travesty.

[unclebankster]

It is beginning to appear that our failure to allow capitalism to work and sweep away the bloated insolvent firms in 2008, will result in another financial crisis caused by greed, excessive risk taking, and payoffs to politicians. Both political parties are completely complicit in the coming travesty.

***********
I like your first option, but ever since the deflation of the 1920’s & 1930’s, where you had multi year deflation the PTB have decided to error on the inflationary side.

There will be a high price to pay for the bailout and cheap money policies of the last 14 years.

Great post, Soul of the South.
Well done.

[unclebankster]

“This is nothing. The fact that the economy refuses to slow down after multiple .75% rate hikes is the big news right now.”
**********

The central bankers have no reason to not continue their interest rate hikes.
Much to the chagrin of commercial operations that are dependent on cheap money.

My eardrums can already imagine the screeching going into 2023 & 2024. Fortunately I won’t hear them as a manufacturer.

“I’ll be wearing earplugs.”

[SunkenCiv]

This is Blackstone, curiously similar name, anyway, here's all of the "Blackrock" search results:

• 'I Don't Trust BlackRock's Ability to Deliver': Florida's CFO to Divest $2B in Investments [12/02/2022]
• BlackRock, Schroders hit property investors with restrictions to stem pension client exodus [12/02/2022]
• Florida pulls $2 billion from BlackRock in largest anti-ESG divestment [12/01/2022]
• Do BlackRock, Vanguard & State Street Have the Power to Crush Elon Musk because He Lets Twitter Break the Info Monopoly? [11/21/2022]
• ESG Boomerangs on BlackRock [11/06/2022]
• BlackRock Stock Downgraded Over Investments in ESG [10/19/2022]
• BlackRock Downgraded by UBS Over Growing ESG Investing Risks [10/18/2022]
• Louisiana Hits BlackRock With Massive Multi-Million Dollar Divestment For 'Blatantly Anti-Fossil Fuel Policies' [10/07/2022]
• Louisiana to Divest from BlackRock over ESG Green Energy Activism [10/06/2022]
• Louisiana divests from BlackRock over ESG policies: 'Would destroy Louisiana's economy' [10/05/2022]
• The Annual Summer WEF Meeting (Or How Blackrock Learned to Stop Worrying and Love the CCP) [09/10/2022]
• Bad news for stocks: Fed will be surprised how hard rate hikes hit economy, says BlackRock [09/07/2022]
• Texas Bans BlackRock for Anti-Oil Agenda [08/26/2022]
• Jeff Bezos and Amazon joining Blackrock and other Hedge Funds Buying Up Single Family Homes Making us a Rental Nation [08/20/2022]
• Wise States Begin to Push Back Against BlackRock, Larry Fink [08/13/2022]
• Revealed: Brian "Liberal World Order" Deese Is BlackRock's ESG Plant in the Biden White House [07/03/2022]
• BlackRock CEO Larry Fink Sees Potential for 'Big Shock' From Inflation [06/02/2022]
• Wake-up Call: BlackRock and Vanguard Are Nearly in TOTAL CONTROL of Food Production and Distribution in America [05/02/2022]
• "Put On Your Seatbelts": BlackRock CEO Warns Over 'Scarcity Inflation' [03/30/2022]
• President of BlackRock investment firm warns an 'entitled generation' needs to brace for shock of shortages and higher inflation: Experts warn Americans will pay an EXTRA $433 a month [03/30/2022]
• The Powellenburg Omen! Will Powell Pop The Asset Bubble Created By The Fed's Repeated Policy Errors? (Blackrock Rises, NVR Homes Gets Crushed) [03/30/2022]
• You need to be paying VERY close attention to BlackRock right now... [03/25/2022]
• Blackrock CEO Advances Proposal for Global Digital Payment System and Digital Currency [03/25/2022]
• BlackRock CEO Larry Fink says Ukraine war spells end of globalization [03/24/2022]
• BlackRock Chief Says Ukraine War Marks End to Globalization (this is a hallelujah moment) [03/24/2022]
• BlackRock just lost $17 billion due to its Russian exposure. That's just the tip of the iceberg, as Western banks are owed $121 billion from Russian entities [03/11/2022]
• World Economic Forum Board: Former VP Al Gore, Canada's Deputy Prime Minister, BlackRock CEO & More [02/26/2022]
• Former Blackrock Portfolio Manager Exposes the Pfizer Fraud [02/21/2022]
• State Lawmakers Are Waking Up To BlackRock's Dangers To Americans, And Taking Action [02/18/2022]
• I Divested in BlackRock (Vanity) [02/16/2022]
• BlackRock Investment's CEO is forcing wokism on American corporations [02/13/2022]
• BlackRock Planning to Offer Bitcoin Trading: Report [02/10/2022]
• Long Funeral Homes, Short Life Insurers? Ex-Blackrock Fund Manager Discovers Disturbing Trends In Mortality: The Majority of Deaths are Not Classified as Due to Covid-19. [02/04/2022]
• Blackrock, Vanguard and Pharma Executives Are Making a Killing from A Crisis They Helped to Create [12/21/2021]
• BlackRock adds diversity target for U.S. boardrooms (Huge Asset manager to force anti-white discrimination climate change mayhem) [12/16/2021]
• Consumers' Research Warns US Governors About BlackRock's Retirement Fund Investments in China [12/05/2021]
• Consumer Group Exposes BlackRock's Ties to Chinese Communist Party [11/16/2021]
• 4 Things to Know About Politically Connected, Activist BlackRock and Its China Investments [11/11/2021]
• How The Massive Money Manager BlackRock Endangers U.S. Prosperity And National Security [11/03/2021]
• Eco-Extremist Bill Gates Gets $100M to Fight 'Climate Crisis' from Fossil Fuel Investment Giant BlackRock [09/23/2021]
• BlackRock's China Blunder. Pouring billions into the country now is a bad investment and imperils U.S. national security. [09/07/2021]
• BlackRock: One Company to Rule Them All [07/26/2021]
• The Great Reset: COVID-19, Cyberattacks, China & BlackRock [07/03/2021]
• Who runs the World? BlackRock,Vanguard and State Street [06/30/2021]
• With $20 trillion between them, Blackrock and Vanguard could own almost everything by 2028 [FLASHBACK 2017] [06/27/2021]
• BlackRock in The White House [06/21/2021]
• BlackRock in the White House [06/20/2021]
• BlackRock, other investment firms 'killing the dream' of home ownership, journalist says [06/14/2021]
• Blackrock owns America's homes – and a whole lot else, People are expressing concern that companies are buying up America's housing stock, but the problem may run much deeper th [06/12/2021]
• 'Allahu Akhbar!': Pro-Palestinian protesters chant as they BURN Israeli flag in march through NYC that left diners shocked and saw 'blood' thrown at BlackRock offices [06/12/2021]
• Yes, BlackRock's Home-Buying Spree Should Concern You [06/11/2021]
• Blackrock Is Buying Every Single Family House They Can Find, Paying 20-50% Above Asking Price And Outbidding Normal Home Buyers [06/09/2021]
• BlackRock's Investment in Blacklisted Chinese Surveillance Companies [04/29/2021]
• What Does BlackRock's Prominence in the Biden Administration Mean for Investors? [12/17/2020]
• Why BlackRock's Larry Fink isn't happy about the work-from-home trend [09/17/2020]
• Replacing the Wisdom of Crowds With the Wisdom of Fink. [01/20/2020]
• Larry Fink Defends BlackRock's New Emphasis on Climate Change. What Investors Need to Know. [01/17/2020]
• World's largest asset manager BlackRock joins $41 trillion climate-change investing pact (only 11.10 years left) [01/10/2020]
• BlackRock is hot for Atlanta, plans hiring spree (1,000 jobs) [10/26/2018]
• David Hogg tells Twitter followers to boycott BlackRock and Vanguard [04/18/2018]
• Student activist David Hogg calls for boycott of Vanguard and BlackRock over gunmaker ownership [04/17/2018]
• Here's why BlackRock is throwing in the towel on human stock picking and using robots [03/29/2017]
• BUSTED! Twitter Caught Manipulating Tweets Of Former BlackRock Fund Manager Critical Of CIA and NSA [03/23/2017]
• Gold ETF Market Breaks: BlackRock Suspends ETF Issuance Due To "Surging Demand For Gold" [03/04/2016]
• BlackRock, Obama Campaign Donors Stand to Benefit from Cuts to Military Pensions [08/26/2015]

[Toddsterpatriot]

The second option was to bail out the big banks. This is the option President Bush, his Goldman Sachs treasury secretary, and the Federal Reserve chose.

They shoveled out the short-term loans.

Within a year the bailed out banks were paying multimillion dollar bonuses to executives and easing back into the activities that resulted in failure.

Not only that, they also repaid all those loans. And made tens of billions in profits for the US Treasury.