Bill Ackman runs Pershing Square.
Shannon Stapleton/Reuters
Bill Ackman predicts more pain for regional banks and commercial real estate as interest rates bite.
The Pershing Square chief says the US economy looks healthy, but federal debt will weigh over time.
Ackman warns AI will be hugely disruptive, and predicts Elon Musk’s X will ultimately succeed.
Bill Ackman warned about excessive government spending, and predicted more pain for regional banks and commercial real estate on “The Julia La Roche Show” this week.
The billionaire investor and Pershing Square chief, who called the COVID crash and the Federal Reserve’s shift to hiking interest rates, said the outlook was less clear today.
He also trumpeted the strength of the US economy, cautioned that artificial intelligence will disrupt many companies, and suggested Elon Musk’s takeover of Twitter, now called X, will eventually be a success.
Here are Ackman’s six best quotes from the interview, lightly edited for length and clarity:
1. “We did go through a period where I felt almost like I had a crystal ball of what was going to happen. January 2020 with COVID, and then on interest rates, and a pretty strong view of what was going to happen with the economy. I would say the crystal ball has clouded a bit in the last period.”
2. “For two years, people have been saying that recession’s around the corner. We’ve had a very different view that I think people are coming around to, that the economy is actually still quite strong.” (Ackman attributed the resilience to monetary and fiscal stimulus, psychological relief after the pandemic, and the delayed benefits of infrastructure spending.)
3. “There are definitely some clouds on the horizon. I do worry about the amount of debt we have, and the enormous deficits at a time that the economy is strong. Ultimately it’s going to be a big drag on the economy.”
4. “The commercial real estate picture has not gotten better. You’re going to start seeing real defaults, particularly with office assets. The pressure on the regional banking system — you’re going to start to see more of it come now on the commercial real estate side.”
5. “You need to think about the implications of AI for every company you own. Is it an asset or liability? Is it going to enable the creation of a competitor that will make your lock on a business vaporize overnight? Does it somehow fill in the moat so that the army can storm the castle?”
6. “I think he’ll do quite well ultimately with Twitter.” (Ackman was referring to Elon Musk, whose acquisition of the social-media platform he supported with a $10 million investment from his family foundation.)