By Sam Zell
(to the tune of “Raindrops Keep Falling On My Head”)
Capital is raining on my head.
Everything is liquid, we’re awash with cash to spend –
The flood has drowned returns,
‘Cause assets keep liquefying, monetizing, raining…
So I just did me some Econ 101.
Seems like we’ve gotten out of Equilibrium;
But relative yields keep falling as more capital keeps raining
What lies ahead, we’re old
The western world is aging, we’ll need income
From our pension funds.
Where’s it coming from?
The yields we see won’t fuel no party.
Tho’ capital is raining on my head,
Interest and inflation rates are narrowing their spread
To half what textbooks said –
The ratios that we’re used to
Have been squeezed by so much cash flow.
The world is monetizing faster every day,
Illiquid assets alchemized
To currency in play
Competing for return,
Black gold prices rising, still more money changing assets…
Capital keeps raining on my head,
So much is out there that the world is out of whack.
When will we see balance back?
It’s gonna be a long time ‘til returns meet expectations.
We need to be prepared for slim annuities…