DANIELLE DiMartino Booth, Commercial Real Estate, Federal Reserve, Restaurants

Congestion Indigestion – The Future of the Restaurant Industry in America

Oh how Mrs. Howe’s heart burned. Literally.

And so, her dutiful hubby descended to his basement where he concocted a remedy of calcium carbonate and sugar for his bride, much to her relief. And much to Jim Howe’s financial delight, his made-at-home remedy caught on like wildfire, extinguishing heartburn, neutralizing acidity and digesting indigestion far and wide. Could it be that the excesses of the Gilded Era were just what the pharmacist ordered in 1928? Or perhaps it was the hangover that set in the following year?

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Destination Reformation — The Dawn of a New Era in Central Banking

Combine contraband coffee, paralytic guilt and a gift for translating Greek and you too can change the world. Such was the case with a young, deeply devout Catholic by the name of Martin Luther in the year 1516.

A decade after he traded academia for the priesthood, Luther found himself disturbed by the quid pro quo nature of Catholicism. Sin expunged via penance in increasingly pecuniary form struck Luther as graceless at best. A field trip to Rome only served to dial up his unease as the ornateness on vivid display communicated dishonesty and even vice. That this epiphany coincided with the first trickles of coffee into Germany was fitting given what was to come.

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Jay Powell – A Quiet Leader

The sheer breadth of Powell’s experience is refreshing compared to what we’ve had for the past 30 years. Powell has a deep understanding of the law and politics. He worked in the Treasury Department under Nicholas Brady and was confirmed as Undersecretary of the Treasury under George H.W. Bush. His background in politics and the experience he has had at the Fed thus far have prepared him well for his role as liaison to Congress and the White House.

Powell’s experience as an investment banker was critical in his carrying out the investigation and sanctioning of Salomon Brothers. Understanding the entirely different type of politics that exists in big banks will bode well for his capacity to regulate the banks. This attribute especially will dilute the power traditionally exerted by the NY Fed in recent years, a District that has a long history of conflicts of interest vis-à-vis the banks it regulates. A stronger regulator as Fed chair in the years leading up to the financial crisis would have been able to recognize many of the markers the economists missed.

At the Carlyle Group, Powell founded and ran the Industrial Group within the Buyout Fund. A separate missing characteristic among Fed leaders for the past 30 years has been a woeful lack of understanding as to how Fed policy effects corporations and the decisions CEOs and CFOs make driven by Fed policy, the most obvious of which has been debt-financed share buybacks at the expense of capital expenditures.

Some in the media have questioned Powell’s being the wealthiest individual at the Fed. That is actually a strong suit. In his work between 2010 and 2012 at a bipartisan think tank, Powell worked for a salary of $1 per year to carry out his mission to raise the debt ceiling. His wealth affords him the luxury of having no preset agenda. His history of working for his country exemplifies that he is at the Fed because he truly believes he is doing a greater good in servicing his country.

Powell’s work on Too Big to Fail banks also speaks to his ability to be independent and objective in his approach to regulating big banks with deep-pocketed lobbyists who hold huge sway over politicians. If he is willing to go up against the biggest banks, he will hopefully prove to be a leader cast in the mold of William McChesney Martin, the longest serving Fed Chairman famous for testifying to Congress that it was the Fed’s job to take away the punch bowl just as the party gets going.

His being a member of the Republican party is a sign he will be less apt to encourage further mission creep at the Fed in its fulfillment of its second mandate to maximize employment. Dovish leaning Fed chairs have induced financial instability time and again in their efforts to bring marginal workers off the sidelines. The busts that have followed though have done greater damage to the labor market. His experience in the financial markets suggests he will be less apt to keep rates too low for too long as has been the case with his three predecessors.

Powell was not in favor of the third round of QE, but voted for its nevertheless. This is his biggest black eye and why market participants perceive him to be as dovish as they do. One can only hope that the quiet leader will have the strength to not only act more independently, being faithful to his convictions, but also to encourage dissent on the Board of Governors which has been absent since 1996 save two dissents.

I lean towards the Bloomberg Intelligence Fed Spectrometer which rates Powell as neutral rather than a hawk or a dove. Or as the man I used to call boss, Richard Fisher, would say, Powell is a (wise) owl. The notion that an intelligent man who has studied economics assiduously since joining the Fed is unfit to lead because he is not a PhD in economics is naïve and utterly preposterous. His not being an academic is possibly his best attribute given he will be battling the next recession and the financial markets disruption that is sure to accompany it.

 

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FINDING NEOM, DiMartino booth

Finding Neom: The Future of Black Gold

Sometimes you have to lose nearly everything to focus your attention on what’s most important, even if you’re a clownfish.

But then it’s not every day a barracuda massacres your entire family, save one damaged egg. Lucky for all us moviegoers, it was Nemo who eagerly emerged from that egg, the big screen’s most beloved orange-striped fish, damaged right fin and all. Not surprisingly, such trauma drove Nemo’s father to helicopter parenting, to the extent such proclivities are possible…underwater…on the Great Barrier Reef. On the other hand, anything is conceivable in animated features. Such was the case nearly 15 years ago with Disney’s release of Finding Nemo.

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DiMartino Booth, China, Policy, Economy

Dim Sums: A Fork in the Silk Road

Two centuries before Christ and millennia before truck stops, there was Dim Sum along the Silk Road. What, after all, could possibly best tea houses with nibbles to break the monotony of a 4,000-mile journey from Xi’an to the Mediterranean and back?

The tradition of Dim Sum is rooted in the revelation that drinking tea helps the digestion process, which prompted the introduction of bite-sized dishes to stand as accompaniments. It’s easy enough to envision the warm feeling those beckoning tea house silhouettes over the horizon elicited, the same sensation stimulated by the Golden Arches today.

 

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THREEofTHREE, Danielle DiMartino booth, Money Strong

Pricing in Perfection: Three out of Three?

We know two out of three ain’t bad. Does that render three out of three perfection itself? The history of the number three certainly suggests that to be the case. Little did we know that three is the first number bequeathed ‘all-encompassing’ status.

True Triads come in many familiar forms including the Father, Son and Holy Spirit; the beginning, middle and the end; the heaven, earth and waters; the body, soul and spirit; and last but certainly not least — life, liberty and happiness.

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Danielle DiMartino Booth, Money Strong, Credit Markets

The Credit Markets: Casting Angels from Crowded Celestials

Mammon, Moloch and Mulciber have never had it so good. If your Paradise Lost is lost on you, a quick refresher. All three are former angels who have fallen on hard times, in Hades, that is.

Mammon is known as the “least erected,” as his eyes are always on the ground, faithfully foraging for gold. A pragmatist and capitalist, Mammon would have exploited the wealth of Hell to turn the heat down rather than bother with all that warring with God.

On the opposite end of the homicidal scale, sits Moloch, an idolatrous deity worshipped by some ill-fated Israelites. His penchant for child sacrifice went hand in hand with his council vote, which was all out war with God. And then there was Mulciber, inspired by Hephaestus in Greek mythology. He must have been the right brain among the fallen given he was the chief appointed architect for Pandemonium.

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Economy, Pensions, DiMartino Booth, Danielle DiMartino Booth, Money Strong LLC, Fed Up: An Insider's Guide to why the Federal Reserve is Bad for America,

Retirement in America: The Rise of the Velvet Rope

Before there was the One Percent, there was the velvet rope at Studio 54.

Gaining entry to the divine disco, with its adherence to a strict formula, was just as exclusionary. This from Mark Fleischman, the Manhattan haunt’s second owner in a memoir released to mark the 40th anniversary of the club’s opening:  “A movie star could bring unlimited guests, a prince or princess could invite five or six guests, counts and countesses four, most other VIPs three, and so on.”

Andy Warhol called it the, “dictatorship at the door.” Brigid Berlin, one of Warhol’s Factory workers and guests, once described to Vanity Fair how she, “loved getting out of a cab and seeing those long lines of people who couldn’t get in.” If beauty alone could sway the dandy doorman, famed for flaunting his fur, a different kind of cordon awaited you once you set foot inside the cavernous strobe-lit mecca, that is a screen hung across the dance floor to separate the chosen from the common. The scrim summarily dropped at midnight, but not a minute before, affording elites ample opportunity to make their escape to the VIP floors above.

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Investing Now & Then: A Panoply of Parallels, DiMartino Booth, Money Strong, Fed Up

Investing Now & Then: A Panoply of Parallels

So much for “ghoulies, ghosties and long-leggedy beasties” having a monopoly on “things that go bump in the night.”

No longer is this classification reserved for things that taunt, tantalize and toy with our terrors as that traditional Scottish poem first invaded our minds. Earlier this summer, some avid astronomers, tasked as they are with mapping out the infinitely capacious celestials, literally stumbled upon a distinctly different sort of bump in the night. A mysterious ‘cold spot’ sighted telescopically might actually be a bruise of sorts, “the remnant of a collision between our universe and another ‘bubble’ universe during an earlier inflationary phase.”

Such a discovery would strip the ‘uni’ right out of universe landing us smack dab in a ‘multiverse’ in which all conceivable outcomes are playing out at once in a layered rather than singular reality. In the event this panoply of parallel possibilities has left your brain in a painful pretzel, ponder not another moment. The jury is in and the verdict is parallel universes in quantum mechanics and the cosmos alike are unanimously unproven.

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@dimartinobooth, Danielle DiMartino Booth, Fed Up: An Insider's Guide to why the Federal Reserve is Bad for America, Money Strong LLC, economy, federal reserve, William Safire

Channeling Safire: “If it’s broke, fix it.”

Bert Lance must have left office thinking his legacy was in the soup.

Instead, the wise words of one of the country’s shortest-serving Directors of the Office of Management and Budget would go on to first merit inclusion in Random House’s Dictionary of Popular Proverbs and Sayings and then today, Google status. The expression, “If it ain’t broke, don’t fix it,” achieved such acceptance, conservative legend William Safire would go on to crown Lance’s idiom, “a source of inspiration to all anti-activists.”

For Safire, a gifted word spinner if there ever was one, his acknowledgement of pith perfected in no way implied admiration of the source. Indeed, Safire’s crowning glory as a New Yok Times columnist arrived with his 1978 Pulitzer Prize for “Carter’s Broken Lance.” …

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