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Cheap Trillion Dollar Insurance

stimulus Cheap Trillion Dollar Insurance

I’ve been pleasantly surprised so far with regard to how well our rent collections have held up since the onset of COVID and the corresponding economic carnage. On average, we’ve been collecting across our portfolio about 98% of what we have billed.

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A Brutal Dichotomy: Time For Another Meaningful Stimulus?

Brutal Dichotomy: Tightening Fed Stimulus

Fiscal stimulus has now started to contract while the Fed’s monetary support for the economy has tightened quite significantly over the last three months. See what the following charts show:

U.S. Fiscal Thrust Policy Expansionary Policy Contractionary Stimulus

Fed Balance Sheet Impulse 10-2020 Stimulus

The following is from The Washington Post and shows how significant the support for the unemployed has been and how it will drop materially if no stimulus package is passed.

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Don't Flip Out, Flip a Coin Instead

flip a coin

I know this may shock some people, but I have to admit that it’s not always obvious what I should write about each week and there are even some weeks where the motivation to do so is less than what it should be. I’m human,

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The Fed's New Inaction Function

Federal Reserve inaction

Fed Approves Shift on Inflation Goal

Federal Reserve Chairman Jay Powell officially altered the Fed’s reaction function during his virtual speech given for the annual Jackson Hole conference. More accurately he articulated its inaction function. Rather than being trigger happy to tighten monetary policy and raise interest rates as inflation reaches 2%,

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Who Would Have Thunk it?

COVID 19 in Texas

Texas becomes the first state to reimpose restrictions after lifting stay-at-home order April 30

I can’t say I’m surprised that states that had itchy trigger fingers to reopen (e.g. Texas, Arizona, Florida) are seeing a surge in new COVID-19 cases and a higher positivity rate among those tested. The following graph from the Wall Street Journal shows how the number of new cases is hitting a new peak after having come down.

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Interest Rates: Lower for How Much Longer?

variable interest rates

“We’re not thinking about raising rates — 

we’re not even thinking about thinking about raising rates,” 

Jerome Powell during 6/10/20 press conference

With interest rates at record lows, this is a time when many people are strongly considering locking in long-term,

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The Positives of Being Negative

LIBOR Variable Interest Rates F

Ok, let’s get this out of the way first since this blog has a subliminal purpose of being a diary for major economic and financial milestones so this is one I can’t ignore.

April Unemployment Rate Rose to a Record 14.7 2020

Now to the subject at hand.

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I Have Nothing To Add

Warren Buffett Charlie Munger I have nothing to add

Charlie Munger can be extremely loquacious as he is one who loves to pontificate and definitely has something to say. He also knows when to stay quiet. When he and Warren Buffett hold court at Berkshire Hathaway’s annual meeting and a question is asked of Buffett and after answering it he turns to Charlie and asks him if he has anything to add.

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Follow the Herd: Why COVID19 End Game Needs Herd Immunity

Herd COVID_19

I’m not one to typically advocate following the herd but in the case of the coronavirus, I am having a hard time seeing an end game that doesn’t have herd immunity as the ultimate goal. And this could take a long time and lead to a lengthier economic contraction (to put it mildly) and even more massive federal intervention through government spending and Federal Reserve support of financial markets.

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A Leap Over Normality - Our New Abnormal

COVID-19 Abnormal

Last week was a crazy week preparing for rent collections this week as well as going through in great detail the safety precautions we are taking to do our best to keep our employees and residents safe. That is why this blog is shorter than normal.

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