Great interview,, I shorted blackstone back in March ‘23 after see that some of their C-suite was selling and watching the Holiday videos they did back then. They just didn’t seem like a serious firm. Combined with their chart it just seemed like a good move. Maybe I’ll give it another shot
Carson Block's ability to speak off the cuff with respect to details in the financials is something I rarely see. Most interviewees would speak in generalities about such things. But he's seemingly got BXMT's entire financial situation committed to memory.
He's correct about the circa 2021 vintage CRE acquisitions and corresponding devaluations. As Carson said, it's an open question as to the extent investors will be willing to sufficiently answer capital calls. However, if investors do answer capital calls to refinance, extend variable rate loans with newly purchased interest rate caps or to increase NOI through value add work allowing fixed rate financing due to stabilized occupancy, then bxmt will be fine. My guess is, bxmt will suffer but probably not as much as Carson and crew think it might.
It's hard to say. For all the discussion, it's basically about the value of the mortgage assets. Operating and as collateral. Looks like BXMT, by the latest 10-Q, has a run rate working cost of debt, int exp/debt liabilities, of around 7.3%. That's up from around 4% 3q 2022. Question is how much of the loan book can handle that burden, plus? Then as a levered spread play, these assets are also used as the collateral on the company's borrowing. Guessing the true value of the loans are noticeably less than booked. Question is how able and eager are BXMT's lenders to push for a potential collateral adjustment? BXMT looks like it's holding it's own at the moment. Didn't see any OREO. Accrued interest steady in 2023. But clearly risks. Just tough to tell how much with these levered black-box situations.
I have no idea what Blackstone was thinking with that recent Holiday video. Who were they trying to appeal to - TikTokers? They just came off as unprofessional fools.
Aren't there a lot of pensions vested with blackstone. Won't the fed just backstop pension losses like they did with the 2008 financial crisis or SVC. Pension losses may have too much moral hazard.
He makes a compelling argument. The rate caps are of little use if they reset when SOFR is at 4.5%. As loan servicers, we noticed that a lot of borrowers were shocked by the expense on the premiums of the rate caps; to add insult to a deal that already can't pay its debt service. The one aspect I wished he would have talked about was the loan guarantors who are required to prove capital liquidity and net worth in event of default. The idea that people could just hand back the keys and leave the bag with Black Rock Mortgage Trust didn't seem reasonable to me, but I'm not a seasoned vet in the industry. He certainly referred to investors needing to kick in equity to cover shortfalls month to month, but how is it that these same investors would not also have personal assets/collateral tied to the deal? If you caught that part, please feel free to comment.
Every crisis/collapse/inflation/recession provides an equal market opportunity if you are properly prepared and knowledgeable. I've seen people amass up to $800,000 during crises and even with ease in a bad economy. Someone has undoubtedly become extremely wealthy as a result of the crash.
I agree that there are strategies that could be put in place for solid gains regardless of economy or market condition, but such executions are usually carried out by investment experts or advisors with experience
A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k
Nicole Desiree Simon deserves credit as one of the finest portfolio managers in the industry. Her reputation precedes her, and I highly recommend looking her up to locate her online if you are internet-savvy
Thank you for sharing, I must say, nicole appears to be quite knowledgeable. After coming across her web page, I went through her resume and it was quite impressive.
The problem is there is still a massive building boom underway across the USA and for every type of real estate imaginable so this is driving value of current *EXTANT STOCK* physical property of say "manias of yore"(remember 2008?) to literally *FREE.* So as people *ABANDON* properties wholesale...other properties are in fact booming in the meantime. Worse still the US economy *CONTINUES* to hyperinflate so equity valuations now in the *TRILLIONS* for select individual names...well, what is the demand for real estate for Google, Microsoft, Facebook...all excepting Tesla and Amazon real estate demand is in fact de minimus right now if not nil as why lease when in fact can outright own the property instead as McDonalds does? What happened to Sears is dispositive.
Hi, BXMT = Blackstone Mortgage Trust (what Carson's firm is short) BX = Blackstone "the mothership" CLO = collateralized loan obligation if there is anything else that is confusing, please let me know and I will share info on what it means, if I can. -Jack
Its good to end this year knowing how profitable trading has been so far and mostly when it comes to bitcoin day trading....... I would boldly say this here, you can't be profitable and successful hoping on hodling alone and waiting for the market to skyrocket......"Day trading" still remain the very best way to accumulate and grow a strong portfolio when it comes to crypto.. All praises goes to Dario daily signals and guidance for the well analyzed predictions given to me!!!
Carson Block, what a great catch Jack.
Love Carson Block, we need to build him a statue for doing this God's work. Short sellers are so important to the market.
Wow .... 2 words ... weight loss ... looking good Carson, looking healthy! Congratulation!
That's the 1st thing I noticed too 😆
Love that we got the pro CLO argument and the bear's take on the matter. Great job Blockworks keepi g the discussion healthy and multiperspective!
Great interview,, I shorted blackstone back in March ‘23 after see that some of their C-suite was selling and watching the Holiday videos they did back then. They just didn’t seem like a serious firm. Combined with their chart it just seemed like a good move. Maybe I’ll give it another shot
Carson Block's ability to speak off the cuff with respect to details in the financials is something I rarely see. Most interviewees would speak in generalities about such things. But he's seemingly got BXMT's entire financial situation committed to memory.
He's correct about the circa 2021 vintage CRE acquisitions and corresponding devaluations. As Carson said, it's an open question as to the extent investors will be willing to sufficiently answer capital calls. However, if investors do answer capital calls to refinance, extend variable rate loans with newly purchased interest rate caps or to increase NOI through value add work allowing fixed rate financing due to stabilized occupancy, then bxmt will be fine. My guess is, bxmt will suffer but probably not as much as Carson and crew think it might.
It's hard to say. For all the discussion, it's basically about the value of the mortgage assets. Operating and as collateral. Looks like BXMT, by the latest 10-Q, has a run rate working cost of debt, int exp/debt liabilities, of around 7.3%. That's up from around 4% 3q 2022. Question is how much of the loan book can handle that burden, plus? Then as a levered spread play, these assets are also used as the collateral on the company's borrowing. Guessing the true value of the loans are noticeably less than booked. Question is how able and eager are BXMT's lenders to push for a potential collateral adjustment? BXMT looks like it's holding it's own at the moment. Didn't see any OREO. Accrued interest steady in 2023. But clearly risks. Just tough to tell how much with these levered black-box situations.
Blackstone would be another epic center of Financial Crisis
There are hundreds of private lenders in this same position. And those do not have the deep pockets of a Blackstone.
I have no idea what Blackstone was thinking with that recent Holiday video.
Who were they trying to appeal to - TikTokers?
They just came off as unprofessional fools.
Aren't there a lot of pensions vested with blackstone. Won't the fed just backstop pension losses like they did with the 2008 financial crisis or SVC. Pension losses may have too much moral hazard.
Don't think they can. $34T in debt.
Very educational. Thank you!
I wish I had the cash to even step into this arena.
Can we please get Henrik Zeberg as a guest? Would be so happy if you bring him on.
Interesting. I watched to see what the short thesis was on BXMT and found out our CLOs were investing in CRE loans 🤷♂️
He makes a compelling argument. The rate caps are of little use if they reset when SOFR is at 4.5%. As loan servicers, we noticed that a lot of borrowers were shocked by the expense on the premiums of the rate caps; to add insult to a deal that already can't pay its debt service. The one aspect I wished he would have talked about was the loan guarantors who are required to prove capital liquidity and net worth in event of default. The idea that people could just hand back the keys and leave the bag with Black Rock Mortgage Trust didn't seem reasonable to me, but I'm not a seasoned vet in the industry. He certainly referred to investors needing to kick in equity to cover shortfalls month to month, but how is it that these same investors would not also have personal assets/collateral tied to the deal? If you caught that part, please feel free to comment.
Every crisis/collapse/inflation/recession provides an equal market opportunity if you are properly prepared and knowledgeable. I've seen people amass up to $800,000 during crises and even with ease in a bad economy. Someone has undoubtedly become extremely wealthy as a result of the crash.
I agree that there are strategies that could be put in place for solid gains regardless of economy or market condition, but such executions are usually carried out by investment experts or advisors with experience
A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k
Please can you leave the info of your investment advisor here? I’m in dire need for one
Nicole Desiree Simon deserves credit as one of the finest portfolio managers in the industry. Her reputation precedes her, and I highly recommend looking her up to locate her online if you are internet-savvy
Thank you for sharing, I must say, nicole appears to be quite knowledgeable. After coming across her web page, I went through her resume and it was quite impressive.
Excellent content !!
The problem is there is still a massive building boom underway across the USA and for every type of real estate imaginable so this is driving value of current *EXTANT STOCK* physical property of say "manias of yore"(remember 2008?) to literally *FREE.* So as people *ABANDON* properties wholesale...other properties are in fact booming in the meantime. Worse still the US economy *CONTINUES* to hyperinflate so equity valuations now in the *TRILLIONS* for select individual names...well, what is the demand for real estate for Google, Microsoft, Facebook...all excepting Tesla and Amazon real estate demand is in fact de minimus right now if not nil as why lease when in fact can outright own the property instead as McDonalds does? What happened to Sears is dispositive.
Thanks
Wow. Blackstone's desperate advertising video to encourage uninformed investors to trust their expertise seems to make more sense now.
Carson has lost a lot of weight
Hitting the weights too, looks like he could bench press a car
19:13 “Some Sponsors”
Universities like Berkley & Stanford 😏
excellent
Bx behind them is big Dont underestimate that
So the fed is going to buy blackstone I guess. Kewl.
If some of this leads to #Blackrock Failure ... I'm in.
Blackrock is not Blackstone
@@emphyrio lol, secod cousin once removed. #Derivatives
Different in every city. Dont trust Talking Head
Would really appreciate if you didn’t hide your personal ads in the videos. Just put them in the beginning tagged as intro. It’s hurting your channel
too niche for me
23:00 how much you wanna bet big wang ain’t gonna be there? Tisk tisk tisk
carson looking good, did he have a gastric bypass?
Wow, this interviewer is clueless.
He asks questions which Carson has already told us. This embarrassing
Your guest speaks in acronyms and jargon. He is not comprehensible and I am a retired CPA.
Gotta be a CFA to understand this discussion.
Hi,
BXMT = Blackstone Mortgage Trust (what Carson's firm is short)
BX = Blackstone "the mothership"
CLO = collateralized loan obligation
if there is anything else that is confusing, please let me know and I will share info on what it means, if I can.
-Jack
SOFR = secured overnight financing rate, replaced LIBOR
@@BlockworksHQ Go get'em Jack!
Its good to end this year knowing how profitable trading has been so far and mostly when it comes to bitcoin day trading....... I would boldly say this here, you can't be profitable and successful hoping on hodling alone and waiting for the market to skyrocket......"Day trading" still remain the very best way to accumulate and grow a strong portfolio when it comes to crypto.. All praises goes to Dario daily signals and guidance for the well analyzed predictions given to me!!!