@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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DiMartino Booth, Big Boys, CRE, Money Strong, Fed Up

The Big Boys of Summer

Do you feel it in the air? Is summer out of reach?

Many of us came of age, or thought we did, the first time we heard Don Henley’s mega-hit The Boys of Summer, released in October 1984. But can a song be reincarnated to mean even more? Can one brush with destiny change everything? This week more than any other, it’s right and true to look back and answer that question in the affirmative.

For those of us in New York 16 years ago, September 12th and 13th stretched on for many more than the 24 hours the clock conveyed. It wasn’t until the early morning hours of the 14th, when Dick Grasso announced the New York Stock Exchange would remain closed through the weekend, that many of us were released, on many levels. Walking the beach that weekend, looking for signs in the sand, Henley’s mournful song stopped me in my tracks. “Those days are gone forever” forever took on new meaning.

An old friend dropped me a line recently. His none-too-subtle message reminded me yet again of Henley’s song, but in yet a different way. It would appear the innocent boys of summer have departed the investing world as well, leaving in their stead conditions in which only “big boys” should engage, his words. Though this market veteran has been around long enough to know most asset classes are vulnerable, the article he shared spoke specifically to tail risks building in ccommercial real estate  (CRE), which we’ll get to in relatively short order.

Longtime readers of these weeklies know the two asset classes I foresee investors will grapple with the most in the next recession are high grade corporate bonds and apartments. The math and logic backing this warning are simple as they most resemble that which supported the explosion of subprime mortgage issuance during its heyday. Accept credit quality as a given, so long as it brandishes an investment grade rating, and green light record levels of issuance at just about any price. No, this will not end well.

But what about other CRE subsectors? After all, rent declines throughout the three most recent recessions were the deepest in office and industrial markets. Multifamily, meanwhile, was the least distressed sector. Retail is a unique case in point:  rent declines were near nonexistent during the 2001 recession, but worse than office and on par with industrials during the Great Recession thanks to pricing pressures accelerating the rise of ecommerce.

Since then, things have gotten mighty interesting in what has, by all accounts, been the lesser manipulated of the two types of domestic real estate markets. Hint: it isn’t housing. The Federal Reserve’s misguided policies and interest rate suppression tactics are manifest in residential real estate, where Morgan Stanley figures prices have recovered 90 percent of their peak-to-trough values (‘Peak’ is defined as 2007-2008 highs, while ‘trough’ reflects 2009-2010 lows).

As for CRE, it’s recouped nearly double that of residential – peak-to-trough prices are up 168 percent. Critically, these are the ‘headline’ figures that catalyze concerns among the superficialists. But it’s the subsectors that serve up the real smokin’ hot spice factor. A quick perusal of the nearby table highlights how haywire things have become in multifamily, which we already know, and about which you should consider yourself amply forewarned.

But look just beneath manic multifamily and you see that in any other world, what’s happened in major market and central business district (CBD) office properties would be garnering plenty of angst if not for apartments hogging the overvaluation limelight. And that’s purely through the prism of price behavior.

Factor in what’s driven those price gains and you really start to get worried. We’re talking the zero interest rate policy that the Fed has facilitated. At the extreme, we’re talking about $60 billion in 2015 CRE sales…in Manhattan alone, a record high and 14 percent above 2007’s prior peak.

Lending standards, of course, played their part and dutifully tanked, hitting their most lenient laxity in mid-2015. Foreign investors, in this cycle more than any predecessor, clocked record transaction volumes, which topped out at 18 percent in late 2015.

This highly favorable dynamic was most visible in capitalization, or cap rates, which is the net operating income of any given property divided by its price. The less in the way of income a buyer is willing to accept for a given price, the lower the cap rate. In 2015, cap rates sank to lower levels than they did at their 2007 lows. Valuations were, in other words, at unprecedented peaks, with the key word being ‘were.’

Since peaking, quarterly transaction volumes have slumped to around $100 billion from late 2015’s briskest pace, when sales hit $160 billion. In the meantime, standards have tightened for eight consecutive quarters and foreign investors’ share of transaction volumes has declined to 13 percent. And finally, as has been broadcast widely, the Fed has been in a tightening mode.

What happens when the favorable dynamic that drove cap rates into the ground reverses? The only answer is rents will have to increase to justify keeping cap rates down.

Some caveats to the caveats. Financial conditions are actually easing as sabre rattling, DC stagnation and Mother Nature collude to suppress interest rates. And while sales volumes are well off their peaks, they did recover somewhat in the second quarter and are down just five percent over 2016 levels.

It should be added that Chinese investors would rather have their cash escape to our fair shores; they just can’t get past the state-imposed controls put in place to staunch capital flight. The Saudis and other crude-export-dependent countries would also prefer to have the resources to keep investing were it not for that sticking point of the lowly price of that sticky fluid they pump out of the ground. In all, Middle Eastern investment is down 73 percent over last year; Saudi investment in particular has crashed by 96 percent.

And so, you have sellers thinking their still- nosebleed prices could be validated and buyers thinking recent trends will deteriorate further and thus refusing to budge. That brings us to where we are today – a virtual standoff.

To bring the extreme back into the picture to prove a point, CRE volumes in Manhattan are expected to end the year at $19.8 billion, matching levels last seen in the dark year of 2008. Not surprisingly, expectations for commercial leasing and the future rental market in New York both hit four year-lows in the second quarter.

The good news is the froth coming out of the market should reintroduce rationale among owners. Let’s just say that’s not exactly how the outcome appears to be evolving, which brings us to that article referenced at the outset, the one that disturbed and inspired at the same time.

The Bloomberg article is easy enough to Google, which you should: “NYC Landlords That Can’t Find Buyers Turn to Borrowing Instead.”

The gist of it speaks to the intersection of easy financial conditions not being reflective of the Fed being in a tightening mode, which actually speaks to the disconnect plaguing many asset classes. As it pertains specifically to CRE, think in terms of how cash-out refinancings increased investor losses in securities backed by subprime mortgages way back when.

Recall it wasn’t until John Thain attached a price tag of 22-cents-on-the-dollar to Mother Merrill’s subprime book that anyone truly knew the Street value of the toxic waste. Though things are certainly not nearly so bad, it is the spirit of owners’ behavior that resonates.

This from Bloomberg, per CBRE: “In a building where building sales are few and far between, it can be challenging to find a comparable transaction to get a reading on prices for an appraisal. There are other ways to calculate a property’s value, but it’s impossible to account for changes on a real-time basis.” (Let their painfully diplomatic wording plant its own seed next time you’re contemplating going long or short CRE on a macro level.)

Pardon the digression. Back to the matter at hand of what exactly entrapped owners should do? Why not seek out buyers for your property and simultaneously take out a mortgage on the property. That way you’re effectively refinancing at an inflated value, what my old friend who’d just as well stay in the private domain for, like, ever, terms the “perfect crime in CRE,” assuming you’ve cordoned said property into its own little LLC.

“If things go well, the property value goes up, no harm, no foul,” he observed. “If the market tanks, you hand the keys to the lender, but you still have the cash from the recapitalization.”

Let’s be clear, we’re not talking traditional lenders here. Indeed, second quarter originations fell two percent for life insurers and a steep 21 percent for commercial banks. The flip side is they rose by 26 percent for government sponsored enterprises and an eye-watering 126 percent for commercial mortgage backed securities.

For the record, retail was the only sector to see a decline in quarterly originations, so that’s something. As for multifamily, Morgan Stanley warns that, “investors are more willing to purchase and lenders more willing to finance, resulting in less deleveraging.” Cue the understatement considering the Bloomberg story referred specifically to apartment landlords though the cash-out contagion is sure to spread to other overvalued sectors by yesterday.

Notably, the Morgan Stanley data did not elaborate on the behavior of the most go-go cowboys in the land of lending, that is, private equity (PE). Disregard for a moment, as difficult as it is, the near trillion-dollar pile of dry powder PE sits atop. Ruminate rather on the quarter of that pile earmarked for real estate, some $255 billion, a record if there ever was one.

The beat looks set to go on and on. According to Canaccord Genuity’s Brian Reynolds, in the five-week period through mid-August, pensions directed an incremental $9 billion into some form of private equity fund. A few tasty offerings illustrate a particular penchant for that hard asset which, by the way, has become one of retirees’ most crowded trades, as you, but not they, can see:

  •   Boca Raton Police and Fire Pension allocated $10 million into distressed real estate fund
  •   Vermont state pension $30 million into value-added real estate fund
  •   Illinois Municipal Pension put $75 million into a value-added real estate fund
  •   Wisconsin state pension sank $395 million into real estate funds
  •   Kansas Public Employees’ Pension allocated $50 million to a real estate fund

And that’s just pensions. All manner of investors continue to herd into the divine diversification on offer with PE funds. As for the founders of PE funds, they’re taking buyouts and getting the heck out, at least according to the Wall Street Journal. Lovely.

“A majority of aggressive CRE recap deals are with real estate funds chasing yield,” my friend further added. “Banks can’t touch their rate and terms, so big boy rules apply.” Lovelier.

In the event you think some egregious omission has taken place, safe assured, the $300 billion in hurricane damages will indeed make a different kind of impact. But no one is sure how prominent that role will be just yet.

What can be said of Houston in particular is nearly a fifth of office space in the city stood vacant as of June while 11 million square feet were free for sublease pre-Harvey, the most since at least 1998. Oh, and the vintage of loans with the greatest exposure? That would be 2015.  For any of you vultures out there, can you please get back to me with a stronger word than ‘emptor’ to put after ‘Caveat ______” before you go off half-cocked?

In the meantime, this chart from Hoya Capital Real Estate highlights office real estate investment trusts (REITs) that have largely been given a pass vis-à-vis their brethren in the battered retail (mall) and massed multifamily spaces. You’ll note one REIT found its niche in low quality properties in Houston.

OFFICE REITS

 

Don Henley’s song reminds us that we can never look back. Perhaps it’s best to then look forward, knowing that time as we know it often compresses and that any summer can come to an abrupt end. With any luck, unforeseen events make us stronger in the end. As investors, the best we can do is be positioned for the likely and unlikely outcomes, those that arrive after even the big boys of summer have gone.

 

DiMartino Booth

“Okay, Houston, we’ve had an opportunity here.”

Who doesn’t know that past perfect verbs are passé? Especially where drama is concerned.

Hence the thrice-taken artistic license in recanting the fateful conversation that took place April 13, 1970. An onboard explosion had just rocked those manning the Apollo 13 mission to the moon. In the pitch-blacked-out module, some 200,000 miles from home, the astronauts radioed mission control. You know what happened next – ‘Houston, we have a problem.’ Except it didn’t.

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Bonfire of the Vulgarities, Danielle DiMartino Booth, Money Strong, Fed Up

The Bonfire of the Vulgarities

Among other historic Wall Street milestones, this October marks the 30th anniversary of the release of Tom Wolfe’s Bonfire of the Vanities.

If you’d prefer, it also marks the 520th anniversary of the original Bonfire that took place in Florence, Italy. Back in the late 1400s, the powerful city was under the rule of the Dominican priest Girolamo Savonarola, who like Wolfe, was taken, though not in the best way, with the outward ostentatiousness of the local glitterati. The good father thus ordered the burning of sinful vices such as books and arts deemed devilish and even cosmetics and mirrors that vaunted the vulgars, at least in his eyes.

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Sasquatch Syndrome

Commercial Real Estate: Sasquatch Syndrome

Things were tough for Moscovians back in the Ice Age day.

The Trans-Siberian Railroad was still about 20,000 years from construction completion. And dinner in the form of wooly mammoths had this nasty habit of migrating east, as in so far east, it landed in what would one day be the United States’ Pacific Northwest. Passage was arguably simplified via the Bering Land Bridge, which hypothetically connected the two continents.

Folklore has it that the mammoths were not alone, but were accompanied by the Gigantopithecus. In that Gigantopithecus fossils have yet to be found outside Asia, stalwart believers maintain that a small population managed to flourish in their new home.

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ECONOMICS101, Danielle DiMartino Booth, Federal Reserve

Economics 101: Divining a New Mouse Trap

If only we had more rhabdic force to go around.

Not familiar with the term? It is the Greek derivative for the word ‘rod,’ as in the ones used by Diviners to direct them to riches of the mineral or water variety in ancient days of yore. The key is placement, into the right hands, that is. Before the gifted few were scientifically overanalyzed out of existence or persecuted as witches and subsequently burned at the stake, Diviners were romanticized as the rainmakers of their day.

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Danielle DiMartino Booth, Money Strong, Writing on the Wall

The Writing on the Wall

“Mene, Mene. Tekel, Parsin”

Appearing from nowhere came a disembodied hand. To the disbelief of a petrified King Belshazzar, the hand began to write words of unknown meaning on his wall. ‘Harried’ can’t begin to describe the king’s state of mind. He just had to know and promised the position of the third highest ruler in his kingdom to whom among his enchanters, astrologers and diviners could unravel the riddle of the seemingly indecipherable words. No such luck.

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The Smell of Dry Paint in the Morning, Danielle DiMartino Booth, Money Strong LLC

The Smell of Dry Paint in the Morning

Irish Playwright Oscar Wilde defied Aristotle’s memorable mimesis: Art imitates Life. In his 1889 essay The Decay of Lying, Wilde opined that, “Life imitates Art far more than Art imitates Life.” Jackson Pollock, the American painter, aesthetically rejected both philosophies as facile. We are left to ponder the genius of his work, which in hindsight, leaves no doubt that Art intimidated Life.

Engulfed in the flames of depression and the demons it awakened, Pollock’s work is often assumed to have peaked in 1950. The multihued vibrancy of his earlier abstract masterpieces descends into black and white, symbolically heralding his violent death in 1956 at the tender age of 44. Or does it? Look closer the next time you visit The Art Institute of Chicago. Greyed Rainbow, his mammoth 1953 tour de force, will at once arrest and hypnotize you. As you struggle to tear your eyes from it, you’ll ask yourself what the critics could have been thinking, to have drawn such premature conclusions as to his peak. Such is the pained beauty of the work. Rather than feign containment, the paint looks as if it will burst the frames’ binding. And the color is there for the taking, if you have the patience to slow your minds’ eye and see what’s staring back at you.

Perhaps it was the being written off aspect that drove Pollock to embark upon the final leg of his tour de force. We’ll never know. Renaissances to sublimity are the preserve of those with gifts beyond most our grasps. Hence the curious hubris driving so many pensions to reinvent themselves to full solvency by taking on undue risks. Heedless of what should be so many warning signs, so many managers continue to herd blindly into unconventional terrain hoping to find that perfect portfolio mix. The more likely upshot is their choices will drive them straight off a rocky cliff.

For now, the craggy landscape of pension canvases continue to be painted. Or in the case of the country’s largest pension, the stage continues to be set. This from Ted Eliopoulos, chief investment officer of the California Public Employees Retirement System (CalPERS): “We will be conducting quite elaborate choreography, looking at asset allocation, our liabilities and the risk tolerance of our board in conjunction with our expected rates of return for our various candidate portfolios.”

Oh, but for the days of antiquated notions such as matching assets to liabilities. But that’s so 80s. Today, a given public pension’s portfolio is anything but dominated by the Treasury bonds once held to satisfy its future liabilities. Rather, half of a typical portfolio’s assets are invested in stocks, a quarter in bonds and cash, and the balance in ‘alternative investments,’ including private equity, hedge funds, real estate and commodities. (Yes, we are still on the subject of matching current and future retiree paychecks to appropriate investments.)

To CalPERS credit, this ‘elaborate’ mix turned in stellar performance in its most recent fiscal year ended June 30. The $323 billion fund generated a net 11.2 percent return buoyed by a 19.7 percent return on its stocks. Returns of 14 percent on its private equity holdings and 7.6 percent on real estate rounded out the outperformance.

Eliopoulos stressed that, “as pleased as we are with this one-year return, our focus is always on the long-term. We invest for decades, not years.”

As pointed out in Barron’s, it’s been touch and go for the past few decades. CalPERS returned 4.4 percent compared to the S&P 500’s 7.1 percent, and over the past 20 years, 6.6 percent vs. the market’s 7.1 percent. Neither achieved return, it should be pointed out, exceeds the fund’s currently assumed rate of return of 7.5 percent or the assumed rate to which it will be lowered, seven percent, by the end of 2019.

The ultralow interest rate environment engineered by the Federal Reserve and unattained return goals leave CalPERS 68 percent funded. That puts it just about in line with Wilshire Consulting’s most recent calculations, which found the average aggregate funding ratio for state pension plans to be 69 percent.

So very few pensions are where they need to be. And fewer still will ever get there. Pension managers are deluding themselves into believing creativity in asset allocation holds the key to greatness in the after-working-life.

Afraid to say the miracle of alternative investments cannot make up for the average four-percent differential required to make pensions whole – just this year. How so on the math? A blended portfolio of cash, investment-grade and junk bonds today earns 3.5-percent; this compares to pensions’ average assumed rate of return of 7.5 percent. Of course, this gap has been widening for years care of dim-witted central bankers who excel at calculus but can’t manage simple math.

How unfair is it to leave out portfolios’ spice girls of equities and alternatives? Hate to turn down the party music, but starting points do matter. So do fees (hold that thought).

There’s nothing to say pensions won’t eke out another exceptional year of stock gains. The Fed could well be tantalizing investors with chatter of QE4 if the economic data continue to soften. But there’s no silver lining in that potential outcome. Remember that rocky cliff over which current reckless allocations can drive returns? Let’s just say the cliff gets taller, and the fall longer, for every year into which this aged-bull-market rally stretches.

As for those alternatives, for better or for worse, commodities are passé. Meanwhile, pensions have been abandoning hedge funds for years as passive investing takes victim active managers who dare value an asset and invest accordingly. And real estate is on fire. As in, valuations have never been this steep in the history of mankind. You can draw your own conclusions on that front.

That leaves us with private equity, that darling of asset classes and the issue of those pesky steep fees. According to the Pew Charitable Trusts, states bled $10 billion in fees and investment-related costs in 2014, the latest year for which data are available. Not only is this lovely line item funds’ largest expense; fees are up by about a third over the past decade, which conveniently coincides with the greater adoption of alternatives. Gotta love being a taxpayer!

But surely pensioners are privileged to have access to these tony private equity funds? Over the long haul, PE always outperforms those stodgy asset classes every Tom, Dick and Harry can buy online. So what if they’re illiquid. Right?

It’s hard to imagine the shivers sent down the spines of many pension fund managers when they heard the news that EnerVest Ltd, a $2 billion PE fund, had lost all its value. “Though private-equity investments regularly flop,” the Wall Street Journal reported, “industry consultants and fund investors say this situation could mark the first time that a fund larger than $1 billion has lost essentially all of its value.”

Well at least the oil bust is long over. Ill-fated, ill-timed, ill-valued energy investments are to blame for EnerVest’s demise. And surely that’s a comfort. It positively proves the fund’s evisceration is an isolated idiosyncratic incident.

Those other Wall Street Journal (WSJ) headlines don’t mean a thing. Why worry that, “Shale Produces Oil, So Why Doesn’t It Produce Cash, Too?” To wit, over the past decade, eight of the most established shale players have generated a respectable $414 billion in revenue but nary a penny in free cash flow. In fact, this eightsome has had negative cash flow of $68 billion.

Still think EnerVest will be a one-off event? Try this other WSJ headline from early July: “Wall Street Cash Pumps Up Oil Production Even As Prices Sag,” an article that went on to cite one analyst’s observation of, “insufficient discrimination on the part of sources of capital.”

Why, the question must be posed, bother discriminating when you’re sitting on $1.5 trillion in dry powder? Wait, are we still talking about energy? Well, no. That’s the point.

Go back to that last WSJ article for a moment, to what the reporters wrote: “Wall Street has become an enabler that pushes companies to grow production at any cost, while punishing those that try to live within their means.”

Set aside the fact that the analogy strikes closely to that of a drug dealer. Now nix the word, ‘production’ and fill in the blank with whatever your heart desires. THAT is the power of $1.5 trillion in private equity dry powder in all the forms it has the capacity to assume.

Again, starting points matter. That is, unless you are a deep-pocketed price agnostic buyer, one that collects fees for assets under management, regardless of how well the investment decisions fare. Being valuation-insensitive, however, also means you can incinerate your investors, especially pensions, and still walk away all the richer for it.

To its credit, Pew expressed particular concern with respect to desperate pensions playing the game of returns catch-up, as in those that have most recently plowed headlong into alternatives. No surprise, they happen to be one in the same with those sporting the weakest 10-year returns.

Ever heard someone tell you to not put all of your eggs in one basket? This rule of thumb applies in spades to pensions, or at least it should. While alternatives may provide a degree of diversification, Pew reports that that the use of alternatives among the nation’s 73 largest state-sponsored pension funds ranges from zero to over 50 percent.

Arizona tops the far end of that range, with 56 percent of its assets in alternatives. Missouri and Pennsylvania are not far behind with over 50 percent in this ‘basket,’ and Illinois, Michigan, Ohio, South Carolina and Utah stand out as having close to 40 percent in alternatives. Click for link to PEWTrusts.org report.

In the weeks to come, many pensions will excel in the back-slapping department, reporting double-digit returns for the fiscal year ended June 30th. Please keep your salt shaker handy.

For the third time, starting points matter. In late June, Moody’s ran some figures and scenarios to quantify where pensions are today, and where they’re headed. In 2016, total net pension liabilities (NPLs) surpassed $4 trillion. Looking ahead, Moody’s expects reported NPLs to fall one percent by 2019 in an upside scenario, but rise 59 percent in a downside scenario.

Perhaps the fine folks at Moody’s have contemplated what happens when, not if, pensions’ liquid equity and bond holdings lose 20 percent. Maybe they’ve even taken their scenarios one step further and envisioned the return implications for all of these elegant alternatives when a liquidity freeze takes hold amid plummeting valuations.

What’s a pension to do? Fraught managers are apt to throw more of your money at alternatives as tax revenues rise to compensate for what pensions cannot make up in returns. Know this: the more that $1.5-trillion store of dry powder grows, the more it devolves into that much napalm in the morning. The conflagration that spreads will not be containable, and you won’t be able to tear your eyes from it. As the tragic Pollock said of his paintings, and we will one day say of pensions, they have no beginnings or endings, they have lives of their own.

ICYMI.ddb, In Case You Missed It — August 4, 2017

In Case You Missed It — July 15, 2017

Dear friends,
 
Janet Yellen headed for the Hill this past week for what could be her last appearance before Congress. Of course, that prompted me to grace sweltering Manhattan with my presence to chime in and opine on her viewpoint of the world. As you will see in more than a few of the links below, Yellen’s confusion left me scratching my head.
 
The job market continues to strengthen and wage growth still can’t get off the floor. The economy has withstood as much as it can in the form of interest rate hikes and it’s time to get busy shrinking the balance sheet ‘appreciably,’ to borrow her term? ‘Egregious and unacceptable’ practices have occurred on her watch and yet no action has been taken.
 
The sensation was akin to being swallowed whole by inconsistency itself. If you have a moment, enjoy my jaunt across media outlets. Some are longer than others. But those asking the questions had done their homework and that’s always a plus for the gal on the receiving end.
  
The TV Parade 

CNBC World Exchange — Janet Yellen returns to the Hill
  

Now that we’ve got your Saturday covered, add to your lazy afternoon at the beach Sunday reading the interview Economics Wire posted Friday. It’s a keeper.

In-Depth Interview
 
Economy Wire :  Is the Federal Reserve Bad for America? A Conversation with Danielle DiMartino Booth
 
 
Hoping your feet are in the sand and wishing you well,

Danielle

In Case You Missed It — July 10, 2017

Dear friends,

It is my hope that you received an email that looked like what I’ve pasted below. While it doesn’t resemble the communique you normally receive from me, I assure you I am the sender. Please login as directed and you will transition yourself onto new platform.

 

On 07/6/2017, you successfully activated your trial subscription to Money Strong written by Danielle Dimartino Booth. During your trial subscription, you will receive an email containing a link to the most recent issue of Money Strong published every Wednesday. You may also view recently archived issues of Money Strong at the subscriber website (Subscribers Home).

To access Money Strong, you may login via the link in our notification email or via the login button on our website. On the login screen, please enter the below username and password below for access. To avoid errors in the login process we recommend typing in your email address and then copying and pasting the password from this email:

E-mail Address (Username): _______________________

Password:___________________

 

In the meantime, we’ve got one more payroll report under our belt. The headlines made a splash with job growth appreciably stronger than expected as a surge of sidelined laborers rejoined the workforce. Wages remain soft, which is intuitive given the type of jobs created – home health care workers led the month’s gains, a demographic sign of the times we are in.

For more on the outlook for baby boomers’ retirements, please have a look at my latest Bloomberg column, which focuses on the implications of boomers’ increasing exposure to passive and so-called ‘alternative investments.’ Below the Blomberg piece are three of my earlier missives on the implications of the tremendous build in private equity dry powder and pensions’ prospects. Hard to believe I started writing on this subject two years ago.

 

Private Equity and Passive Investors Are on a Collision Course

Bloomberg View — Danielle DiMartino Booth, July 6, 2017

Money Strong Archive Pull

The Smell of Dry Powder in the Morning 

What if Charlie Munger is Right?

The Smell of Dryer Powder in the Morning

In other In Case You Missed It

The Lance Roberts Show — July, 6, 2017

FED Players Receive Special Treatment

FX Street — EUR/USD and Fed: Levels, Ranges, Targets

As many of you hit the road back home, wishing you well,

 

Danielle

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