News

Landmark Links September 3rd – All Inclusive

Must Read: Companies are securitizing everything not tied down as investors’ ravenous  search for yield continues to ramp up and so-called “Whole Business Bonds” catch on:

Franchised companies like burger restaurant Jack in the Box Inc. and massage provider Massage Envy are increasingly selling unusual bonds backed by most of their business. By pledging key assets like royalties, fees, and intellectual property to bondholders, companies can win investment-grade credit ratings on their debt and slash their financing costs, making their bonds higher quality even if their overall companies are still relatively risky.

Economy

Out Front: 2019 is shaping up to be the first year that women make up the majority of the college-educated labor force.

Not as it Seems: Despite a lot of talk to the contrary, interest rates are actually on the high side from a historical standard once inflation and taxes are taken into consideration.  See Also: Can the US resist the pull of negative interest rates around the world?

Trickle Down? The rich have cut their spending on everything from homes to jewelry, sparking fears of a trickle-down recession that starts at the top. (h/t Steve Sims)

Overburdened: Oil and gas bankruptcies are growing as investors lose their appetite for shale and smaller drillers, which account for sizable part of U.S. oil production, are struggling to pay off hefty debt burdens.

Commercial

Where the Rubber Meets the Road: Opportunity zones launched with high expectations about investment in under-served communities.  However, a lack of clarity caused the program to stall out early on.  The rest of 2019 will be critical to the program’s success or failure.

Pullback: For the first time in seven years, overseas investors in office buildings and retail space became net sellers of properties, according to a new report from Real Capital Analytics, which tracks the sector.

Residential

Snap Back? Goldman Sachs is projecting somewhat of a housing rebound for the second half of 2019.

Market Shift: Regulators are moving to allow a majority of U.S. home purchases to be conducted without licensed appraisers as algorithms take over.

Profiles

Black Market: Traditional drug dealers are still formidable competitors in U.S. states where cannabis is legal. Local regulations and huge markups from high taxes are leading to less revenue than initially projected.

Low Barrier to Entry: LaCroix won the bubble water battle but larger competitors are stepping up their marketing in the sparkling water space and present a serious challenge.

Playing the Long Game: LeBron James’s choice of Nike over Reebok – even though the latter offered $28MM more initially – could result in him making $1 billion.

Chart of the Day.

Self Fulfilling?

Source: Goldman Sachs, @Amdalleq

WTF

Royal Flush: A man was arrested for brandishing a machete and threatening to “chop” another man after he didn’t flush the toilet because Florida.

Holster It: Residents are being warned not to shoot guns at hurricane Dorian because Florida.

Hey Ladies: An obese Iowa man was arrested for following a woman around a Walmart on a scooter with his genitals exposed.

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

Visit us at Landmarkcapitaladvisors.com