iPhones, IPOs, Interest Rates
Lots of random news today, none of which warrants a full post from me due to either lack of opinion or lack of expertise. However, here are some places that have worthwhile views on each of these subjects. Also, don’t forget about the Northeast Ohio PKD Walk on September 21st. Donate to my team so I can hold bragging rights in my house for the next year. My son William has his own fundraising page this year, too!
The WeWork IPO
It’s been hard to avoid news about WeWork. First as a tech disruptor darling. Now as fodder for gossip as their IPO plans look shaky. Personally, I think the founder’s actions and the structuring of the firm tell you all you need to know, but I’m not a stock picking expert. Professor Damodaran is, however, and he breaks down his view here along with some damning parallels to Theranos. We Work’s also got some competition from legacy real estate folks. In the end, I’m inclined to agree with real estate legend Sam Zell when he says “Every single company in this space has gone broke“. Yikes.
The Negative Interest Rates
Global interest rates are really low. This is great if you need to borrow money today, but not so great if you’ve got huge buckets of liabilities to meet (pension funds, etc). The US economy is doing well (see below), but President Trump wants the Federal Reserve to lower rates. Great takes on the interest rate topic from Mark Rzepczynski as well as the Demonetized blog. There are valid reasons to want rates to move in either direction (or stay the same). I like Brian Wesbury’s view that monetary policy no longer has the impact it once did (Wesbury says QE is actually a failed policy) and that fiscal policy (tax rates, regulation, and spending) is the key to unlocking true economic growth.