THEME: Surprise, disbelief, and not quite April Fools’

Michael’s CIO (Check It Out) Report on the week just past — events, sarcasm, and global macro reflections

Photo and graphics by Michael Ashley
  • DeciMNation: Russia continues to invade and decimate a country of 44 million individuals. Over 3.5MM Ukrainians are now refugees in Europe and 6.5MM are displaced within their own country — The humanitarian and economic outfall will be wide and long-lasting
  • I have a need”: Ukrainian President Volodymyr Zelenskyy, by words and actions, has become the symbol of democracy and freedom for the world
  • Proxy: The invasion of Ukraine is already a proxy war between the West and Russia — It is also, unfortunately, turning into a proxy standoff between the U.S. and China😤
  • Theater of war: Russia bombed an art school and a theater filled with women and children sheltering in the basement; over a thousand may be awaiting rescue from the rubble — and Arnold Schwarzenegger taped an impassioned plea to Putin and the Russian people to terminate the war
  • Surprise: German Chancellor Olaf Schulz pushed through a 100 billion euro rearming plan to help create Europe’s largest military and the third-largest defense force in the world (behind the U.S. and China) — Ironic how situations flip🤸🏽‍♀️ — Security is such a fragile thing and the world is infinitely complex
  • Recession: With higher energy prices, slowing growth, and a humanitarian crisis on its doorstep, Europe should fear recession this year — nuff said
  • McNFT: McDonald’s launches NFTs (unique digital tokens) to celebrate the Triple Cheeseburger in Italy — It sounds like an April Fools’, but isn’t — Can I add truffles to that?😏
  • UP🎈 The Federal Open Market Committee (FOMC) raised the federal funds rate (FFR) target range from 0.0–0.25% to 0.25–0.50% last week and hinted at more increases to come — no surprises there — The Fed will try to get in at least 6 more rate hikes this year, but with the economy slowing, they likely won’t achieve them all
  • Flat like the earth🌍 The U.S. Treasury yield curve continues to flatten and invert (when shorter maturity bonds yield more than longer maturities). Flattish and inverted yield curves are thought to portend economic problems or recessions. As of Friday, the 3-year Treasury yields slightly more than the 5-year, the 7-year is above the 10-year, and the 20-year is greater than the 30-year yield
  • April Fools’ gold seemed to arrive a couple of weeks early when AMC (the movie theater chain) announced a partial acquisition of Hycroft gold and silver mining company — Am eager to see how this movie plays out🍿
  • Time stands still: In another rush to get taken seriously before April 1, a bill with bipartisan support passed the senate to make Daylight Savings Time⏰permanent
  • Miso Robotle: Chipotle is testing Chippy, a robot tortilla chip fryer; SciFi meets nachos! Meanwhile, Michelin rated White Castle will install burger-flipping Flippy 2 in 100 restaurants — examples of how low-interest rates help companies invest in technology, increase supply, and fight inflation
  • StayFlation: Rents of single-family homes have increased +12.6% nationally (up +38% in Miami, +16% in Vegas, +9% in L.A., and up +6% in D.C.). Apartment rents are up +12% to +17% nationally, depending on the source — Good news for real estate owners
  • Homer: Average 30-year fixed mortgage rates are up at 4% to 4.5%, but still significantly less than the 5% to 6% handles of the mid-2000s housing bubble — Maybe potential buyers will balk at higher monthly dollar payments, maybe fresh listings will hit the market, but barring a recession, there is still much to support home prices [see our previous Game of Homes]
  • Fast food: A Whole Foods Market with “just walk out” technology opened in Sherman Oaks, California
  • Supreme: Hearings start this week for Ketanji Brown Jackson’s confirmation to the U.S. Supreme Court
  • Breeze Airways will expand this summer with direct flights from LAX to Providence, Norfolk, and Savannah
  • NFTs: Mark Zuckerberg said that Meta would add non-fungible tokens to Instagram🐱‍👓
  • Apish: Ape Coin went live on major crypto exchanges following its initial release to Board Ape Yacht Club (BAYC) NFT members — it peaked and then fell -80% within an hour🦧
  • Don’t leave home: American Express is moving into the metaverse/Web3 with financial services, fraud detection, travel, transport, and entertainment services — I can hardly wait🙈
  • Skechers signed a metaverse lease in Decentraland’s Fashion District and filed international trademark applications to sell virtual footwear and apparel — also not an early Aprils Fools’
  • Amazon closed its $8.5B acquisition of MGM studio — the “value behind this deal is the treasure trove of [intellectual property] in the deep catalog”
  • Privates: Find me this week at the ALTSLA alternative investment conference in downtown Los Angeles — organized by CFA, CAIA, CalAlts, and Markets Group
  • Secondaries: Also find me this week at Carmo’s Private Markets Secondaries Meeting in Santa Monica

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Avid traveler and art fan, also Partner & Chief Investment Officer @Running Point Capital, a multifamily office and ultra high-net-worth money-management firm

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Michael Ashley Schulman

Michael Ashley Schulman

Avid traveler and art fan, also Partner & Chief Investment Officer @Running Point Capital, a multifamily office and ultra high-net-worth money-management firm

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