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Wednesday, June 07, 2017

Deja Vu Financial Crisis Pre-2008??? Over-Leveraged > Risk- Aversion, Caution

Two views to share from two Money-Men

Bill Gross Says Market Risk Is Highest Since Pre-2008 Crisis

by John Gittelsohn More stories by John Gittelsohn

and Erik Schatzker More stories by Erik Schatzker

‎June‎ ‎7‎, ‎2017‎ ‎7‎:‎10‎ ‎AM ‎June‎ ‎7‎, ‎2017‎ ‎9‎:‎14‎ ‎AM

Includes an upload of an interview

Source: Bloomberg News

U.S. markets are at their highest risk levels since before the 2008 financial crisis because investors are paying a high price for the chances they’re taking, according to Bill Gross, manager of the $2 billion Janus Henderson Global Unconstrained Bond Fund.

“Instead of buying low and selling high, you’re buying high and crossing your fingers,” Gross, 73, said Wednesday at the Bloomberg Invest New York summit.

Central bank policies for low-and negative-interest rates are artificially driving up asset prices while creating little growth in the real economy and punishing individual savers, banks and insurance companies, according to Gross.

Janus Capital Group and Henderson Group completed a merger May 30 to form Janus Henderson Group Plc, creating a global investment manager overseeing more than $330 billion. It seeks to use its combined size to compete with lower-fee rivals, such as Vanguard Group, at a time when costs are rising for compliance and technology.

Elliott's Singer Warns

System May Be More Leveraged Than 2008

by Beth Jinks and Simone Foxman

‎June‎ ‎7‎, ‎2017‎ ‎2‎:‎42‎ ‎PM

Includes an upload of an interview

Source: Bloomberg News

Billionaire investor Paul Singer said “distorted” monetary and regulatory policies have increased risks for investors almost a decade after the financial crisis.
“I am very concerned about where we are,” Singer said Wednesday at the Bloomberg Invest New York summit. “What we have today is a global financial system that’s just about as leveraged -- and in many cases more leveraged -- than before 2008, and I don’t think the financial system is more sound.”
Years of low rates have eroded the effectiveness of central banks to contend with downturns, Singer said at the event in an interview with Carlyle Group co-founder David Rubenstein. “Suppressive” fiscal, regulatory and tax policies have also exacerbated income inequality and led to the rise of populist and fringe political movements, he added.

Confidence “could be lost in a very abrupt fashion causing conceivably a ruckus in bond markets, stock markets and in financial institutions,” said Singer, founder of hedge fund Elliott Management Corp., which is known for being an activist investor.

. . . The New York-based hedge fund, founded by Singer in 1977 and carrying his middle name, invests globally. Elliott invests across strategies including long-short hedge funds, distressed credit, arbitrage, real estate, shareholder activism and private equity.

Singer’s fund, which manages about $34 billion, is probably best known for a battle with Argentina’s government over that nation’s 2001 bond default. Elliott is pushing for changes at South Korean conglomerate Samsung Electronics Co. and at the world’s biggest mining company BHP Billiton Ltd., among other campaigns.

How Do U Relax? Yoga? ...Here's What Elon Musk Does

According to a post today just after 15:00 ET
Here’s What Tesla’s Elon Musk Does to Relax
http://fortune.com/2017/06/07/tesla-elon-musk-ambien/
Between running Tesla (now large enough to join the Fortune 500 list for the first time), leading rocket startup SpaceX, and launching various other futuristic ventures, Elon Musk doesn't have a lot of time to spare. . .
Or so he said in this article by Jen Wieczner

Musk explained, he spends at least 90% of his time on either the electric car company or SpaceX; 3% to 5% on Neuralink, a venture aiming to create interfaces between the human brain and machine-learning technology; 2% on his new tunneling project called the Boring Company; and the remainder on OpenAI, a non-profit dedicated to artificial intelligence research.
Read more by going to the Fortune link above [

Insights: The State of The CRE Industry

Connect Media interviews Avison Young CEO Mark Rose
June 7, 2017 by Dennis Kaiser

Download on Avison Young website > http://www.avisonyoung.com/
Connect Los Angeles is coming up on June 21st at the newly-completed Hotel Indigo in DTLA. The Market Outlook and Industry Overview panel will explore how things look from the perspective of the C-Suite.
Connect Media asked Avison Young’s Mark Rose, who will be speaking at Connect LA, to share insights on the state of the CRE industry, his outlook for the rest of the year, as well as provide an overview of the key factors driving deals.

Q: What is the state of the industry today including the biggest trends, drivers and concerns?
A: Commenting on the state of the industry requires a country-by-country, state-by-state and province-by-province review.
The U.S. is going through a correction, but Canada is coming out of one.
The U.S. looks to be a leader in interest rate hikes this year, which is leading to a bid ask gap. This gap will continue until the direction of interest rates is more clear.
U.S. lawmakers are creating a pause as well. Stated objectives for healthcare, governmental regulations, business and tax policy are less scary than the environment of uncertainty. Business leaders and real estate occupiers and owners just want to know what the rules are. If this isn’t resolved soon, it could be a disappointing year.

Q: What is the outlook for the year ahead?
A: For the year ahead, more uncertainty, but a U.S. economy that is strong and growing. There is a wall of debt and equity to capitalize real estate.
It’s now a matter of price in the face of rising interest rates.
A repeal of Foreign Investment in Real Property Tax Act (FIRPTA) could create tremendous liquidity and offset higher interest rates.
This year and 2018 will look like more of the same, and will start and stop with every piece of legislation debated by Congress.
With that said, we are in the beginning stages of a cyclical correction that should work its way through until the end of 2018.
Other than fiscal and interest rate policy, technology trends=the big driver.
Trends to continue watching include

investors pivoting toward industrial at the expense of office and retail
premium rents paid for new high-performance assets as compared to second-generation office and retail.

This is about much more than squeezing bodies into less space.
It’s about cybersecurity, power resiliency and connectivity becoming top 5 relocation considerations.
Also watch for big service companies investing heavily in technology and technology companies.
Q: What are some of the ways companies are adjusting to the changes and challenges?
A: Change is inevitable.

Pricing expectations must narrow, and new money will underwrite for 5- to 10-year holds that will assume different growth rates, higher interest rates and increased cost savings driven by incorporation of renewable technology around the globe.
Retailers and office occupiers must face a changing world driven by technology.
Showrooms will shrink,
industrial — meaning distribution and omni-channel logistics — will continue to grow,
the workforce will be impacted by myriad technologies including automation, process engineering and implementation of clean technology.

CONNECT WITH AVISON YOUNG’S ROSE

BOEING, RAYTHEON, AND LOCKHEED SET TO DEVELOP BALLISTIC MISSILE DEFENSE ...

Kill Vehicles get multi-million dollar contracts

Published on Jun 6, 2017

U.S. missile defense experts are moving forward with three U.S. prime defense contractors to develop a future ballistic missile defense multi-warhead killer intended to detect, track, and kill several different incoming enemy missile warheads and decoys with only one counter-missile launch.