Under the big candlesticks of the International Ball hall of the Beverly Hilton hotel, in the bars on the roof and during private holidays of billionaire hotels, there was a mixture of emotions among the financial titans gathered in Los Angeles this week.
Many thousands of participants in the World Conference of the Milken Institute – a who’s who of finance and America of companies – have remained anxious in the midst of volatile markets, continuous trade tensions and deep cuts in the federal government.
“I am CEO, I speak to a lot of CEO, and there is nervousness there,” said Kamal Bhatia, president and chief executive management of the main assets, when he was sitting on the same scene that hosts the Golden Globes.
But there was also a palpable feeling of growing optimism after a three-month rocky start for President Trump’s second term: “I am optimistic about technology, I am optimistic about the direction of the economy, I am optimistic about cost reduction,” said Tony Minellela, co-founder and president of Eldridge Industries, an asset management company. “I think there is a lot of excitement in the world right now, and it’s a fantastic moment to live.”
The atmosphere of the annual Confab of the West Coast has echoed the mood on the financial markets.
Once Mr. Trump’s unexpected prices have sent tumbled actions, there has been a certain relief from the initial panic, because the administration offered concessions and promotion talks which, according to them, will reduce the prices.
The S&P 500 fell by almost 20% below its peak in February, but it has since rebounded, recovering about two thirds of its losses.
But despite recovery, uncertainty remains. The skeptics on the touch of the conference suggested that some fund managers simply painted a more pink perspective to avoid frightening investors in their funds. Others have described it as more hope than conviction.
“No one, myself, inclusive, can say how it will end,” said Ron O’Hanley, Chairman and Chief Executive Officer of State Street. “There may be pious wishes in all of this.”
Scott Bessent, the secretary to the treasure, set the tone on Monday morning, when he was trying to appease the concerns of the financiers. He had started his mission the previous night, organizing a private dinner for a handful of investors, according to some of the participants.
Much in the public on Monday, hope that the prices were relaxed as commercial transactions are concluded, shaken by more pro-corporate policies and pro-enterprise such as tax reductions and deregulation to come later in the year. But there was also an awareness that reality can still be very different. Business is pending, the business conclusion is dormant and the more it continues, the more the consequences could be worse.
With this doubt, many conference speakers have noted that they were more close to investing in Europe and other parts of the world, diversifying far from the uncertain future of the United States.
Pension funds, university allocations and insurance companies, which have been strongly invested in the United States in recent years, are starting the slow reassessment process where they put their money in the future.
Kim Lew, president of the Columbia Investment Management Company, the allocation of the University of Columbia, noted that even if there was a good reason for many fundamental managers to be strongly exposed to the American economy, “I think we all want that we have invested in the world more in the world,” she said.
Investors ariva in the US markets have fueled another largely discussed concern: the role of the dollar as a global reserve currency and its importance to support the $ 36 Billions of the Government.
The corollary of trade deficits is when international investors have more dollars that have been reinvested in American assets such as government debt. If investors are starting to go back, either due to prices or geopolitics, or down the confidence in the stability of the dollar, the government’s ability to continue to finance its debt could be called into question.
“I believe that the underlying foundation of the dollar and the treasure market has been eroded in recent years, and we will better pay attention,” said Alan Schwartz, executive president of Guggenheim Partners.
Late Tuesday afternoon, Michael Milken went on stage for a rare opening speech. Since the start of the conference in 1998, he only delivered two speeches – in 2000 and 2017.
Mr. Milken is largely credited as the father of the high -performance bond market, having designed a means in the 1980s to lend to risky companies that banks and other financial institutions had generally avoided.
In 1990, he pleaded guilty of fraud in securities and conspiracy. He has served a little less than two years of a 10 -year prison sentence and was prohibited from the life -secrecy industry. He was forgiven by Mr. Trump in 2020.
In his opening speech, Mr. Milken pleaded for the American dream and the importance of economic freedom, equality of opportunities, public health and broad access to education.
“One of the things that has differentiated America from almost all the other countries in the world is that you have a chance to try, and if you fail, you have a chance to try again,” he said, adding that “quite often, people in our own country have forgotten how lives are changed by freedom.”
Immigration – nor aggressive detention and deportations that upset immigrant communities in cities like Los Angeles – was not a great objective of official discussions during the collection of the Milken Institute.
But Mr. Milken chose to conclude his own remarks by celebrating immigrants and referring to the words of President Ronald Reagan’s final speech in the White House in 1989.
“When people think of this speech, they often think of it as an ode to our immigrants in this country and how they came to this country for the hope of a better life, and they each renew our concentration on the importance of freedom,” said Milken. “And they help us significantly.”
