News

Landmark Links June 11th – Long Shot

Must Read: As golf struggles and clubs fall further into the red, some affluent home owners are taking matters into their own hands and self-funding courses in their communities to keep them from going bankrupt.

Economy

Stinker: The May non-farm payroll report was weak with only 75k jobs created, versus economist projections of 180k.  April’s report was revised down as well.  This will do nothing to dampen the expectation of a Federal Reserve rate cut in 2019.  See Also: The Fed has begun to debate on whether to cut rates as soon as June.

The Slog: This month marks the 10th anniversary of the US economic expansion that began in June 2009.  If the streak continues into July, it will be the longest since economists have attempted to date business cycles in 1854.  However, gross domestic product has expanded only half as much as it did in the 1991-2001 boom.

To Excess: In this credit cycle, households have retrenched except for student loans and bank leverage has been constrained by regulation.  However, corporate credit growth has expanded greatly, especially on the higher risk end of the spectrum.  As such, this is the area most likely to experience problems when the cycle turns.  Couple this with much of the debt being held by shorter term investors, and the liquidity mismatch could get ugly.

Commercial

Counterintuitive: For all of the interest and excitement, commercial activity in Opportunity Zones is actually declining since passage of the tax law that created them.

Residential

Headed for the Sidelines: Home flipping volumes are falling as softening price growth, waning demand and longer times to sell lead to declining profitability.

Filtering: Given a steady supply of new housing – even of the luxury variety, older homes and apartments gradually grow more affordable.

On the Hot Seat: The Department of Justice is taking an increased interest in realtor commissions from an anti-trust perspective.

Profiles

Validation: In its early days, at home fitness bike company Peloton (the greatest home fitness product in history, IMO) struggled to raise money from skeptical VCs.  Today it is booming as it heads for an IPO and has opened the door for a slew of other tech-based fitness companies.

Taking Flight: Amazon has new drones that they say will start delivering packages to customers in 30 minutes or less in the coming months.

Cut Off: FedEx is severing U.S. air contract with Amazon, says it wants to focus on other retailers as the eCommerce giant continues to build up its own logistics and delivery network.  See Also: From pharmacies to mortgages, here are the seven industries that Amazon could disrupt next.

Chart of the Day

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WTF

The Science is Settled: Alcohol is now being marketed as a ‘wellness’ drink and I couldn’t agree more.

Relatable: A 16-year-old caught driving 105 mph blamed hot wings and the  need for bathroom when pulled over by the police. This is probably the best excuse that one can give for a speeding ticket, assuming that the cops don’t call your bluff and hang around to see what happens next.

Kung Fu Grip: A woman was arrested for grabbing her boyfriend’s genitals so hard during a fight that they bled because Florida.  Side note: she’s now single if any of you are into that sort of thing.

Landmark Links – A candid look at the economy, real estate, and other things sometimes related.

Visit us at Landmarkcapitaladvisors.com