David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Powell Says Economy in Favorable Place, Faces Significant Risks

    This article by Craig Torres and Rich Miller for Bloomberg may be of interest to subscribers. Here is a section:

    “Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States,” Powell said in the text of his remarks Friday to central bankers gathered at the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming. “We will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective.”

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    NYU professor calls WeWork 'WeWTF,' says any Wall Street analyst who believes it's worth over $10 billion is 'lying, stupid, or both'

    This article by Scott Galloway for Business Insider may be of interest to subscribers. Here is a section:

    Adam Neumann has sold $700 million in stock. As a founder, I've sold shares into a secondary offering to get some liquidity and diversify holdings. Ok, I get it. But 3/4 of a billion dollars? This is 700 million red flags that spell words on the field of a football field at halftime: "Get me the hell out of this stock, but YOU should buy some."

    — Gross margins are a pretty decent proxy for how good or bad a business is. And this is a sh**ty business:

    — Adam has several family members working in the business who make "less than $200,000."

    — The ownership structure chart is similar to a hieroglyphic on a cave wall about the survival of the species: Harvest the crops when the sun is high in the horizon, do not venture over the hills, hostile tribes live there, and … don't buy this stock. The corporate governance structure of WeWTF makes Chinese firms look American, pre-big tech.

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    Cass Freight Index Report July 2019

    Thanks to a subscriber for this report which may be of interest. Here is a section:

    We acknowledge that: all of these negative percentages are against extremely tough comparisons; and the Cass Shipments Index has gone negative before without being followed by a negative GDP. However, weakness in demand is now being seen across many modes of transportation, both domestically and internationally.

    Although the initial Q2 ’19 GDP was positive, it was not as positive upon dissection, and we see a growing risk that GDP will go negative by year’s end.

    The weakness in spot market pricing for many transportation services, especially trucking, is consistent with the negative Cass Shipments Index and, along with airfreight and railroad volume data, strengthens our concerns about the economy and the risk of ongoing trade policy disputes. Weakness in commodity prices, and the decline in interest rates, have joined the chorus of signals calling for an economic contraction.

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    Hong Kong Retail Sales Plunge in August, Shop Association Says

    This article by Cathy Chan for Bloomberg may be of interest to subscribers. Here is a section:

    Most Hong Kong retailers have seen sales drop more than 50% in August, according to the city’s Retail Management Association, as the ongoing political protests take a toll on business and the economy.

    The association has urged landlords in the city to halve rents for six months to help tenants overcome difficult times, and has called on the government to provide relief measures to retailers, according to a press release. Retailers are facing large cash flow pressures and a few of them will cut jobs or even shut down if the situation continues to worsen, it said.

    The release didn’t explain what period it was comparing August’s sales with. Hong Kong’s government expects the city’s businesses to continue to suffer this year. The value of retail sales dropped 6.7% in June from a year earlier, the fifth straight month of declines, while the overall economy contracted in the three months through June from the first quarter. Embattled Chief Executive Carrie Lam said earlier this month that she saw “no room for optimism” for the economy this year.

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