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Financial Markets: Lecture 11 Transcript February 20, 2008 << back Professor Robert Shiller: I believe that we still have on, for Friday, Stephen Schwarzman. He said he would do it. I always worry about people who have such important businesses because some big deal may become in crisis or something; people like that have trouble sometimes adhering to a schedule. As far as I know we're getting him, so I hope that you will all be able to come this Friday, here, at the usual time. If there's any problem with his appearing I will email you. As you know, Stephen Schwarzman is a graduate of Yale College and he's one of the great stories of our century. He created just about the biggest private equity firm from scratch in 1985 and I guess they just went public and they have a huge market cap. They're comparable to one of the biggest old line investment banks in New York. He just--he and Peter Peterson--just created it so I think it will be very interesting to hear him. Again, you'll have a chance to question him about what he's done. I put on the reading list The New Yorker article that's out right now. Well actually, I guess it came out a couple of weeks ago, but it's up on our syllabus. I think I might want to take it down before he comes. I'm going to turn--I'm going to reflect on this because he may not be pleased with the article. It's a very hard-hitting critical article. He had to be a tough businessman to arrive where he is. The New Yorker article talks about the price of his condo--or co-op--in New York, which set some record, and so they tell things like that. I was just yesterday in London and people like to gossip about things like that. The limo driver was driving me to the airport and was pointing out the scenes in London. He said, you know that building? Some Arab Sheikh just paid one hundred million pounds for that apartment--that penthouse apartment--in that building and the same Sheikh is ordering a Airbus for his--one of these big Airbus airplanes--for his personal plane and he's having it plated with gold leaf. Did you hear this story? Does anyone--is this true? This limo driver told me this yesterday; he said it's going to cost him five hundred million pounds or something like that to do this. These are gossip. The real substance is what the man does--or woman does--for the world. So, I gleaned here a list of some of the charities that--Stephen Schwarzman is a major philanthropist. He set up something called The Blackstone Foundation from the Blackstone Group and he's a major donor or collaborator with the Frick Collection, The Whitney Museum, Phoenix House, The Red Cross, The Inner City Scholarship Fund, New York City Outward Bound, and the Asia Society. I think that's the real thing we should talk about, not the size of his penthouse. So, I might try to find a more even-handed account and put that up on the website. Incidentally, there's sort of a resemblance between him and David Swensen in the– well, first of all, they're both phenomenally successful, but they both are emphasizing alternative investments. They're not straight-laced old-fashioned; they're willing to take experiments. I think he should
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