Diversified Digest: September 5

September 5th, 2017 | posted in: Insights

by: R. Samuel Fraundorf

Diversified Trust’s investment team brings you headlines of note for the week. Click on the links to access the articles.

The economics of natural disasters are very hard to predict, in large part because there are two chapters to the story.  Initially, there is a negative impact on overall economic growth due to loss of workers, earnings, and other contributions.  This is followed by the redeployment of resources from other parts of the economy as the rebuilding process begins, which can often outpace the initial slowdown.  AQR does a nice job of summarizing the different moving parts and explaining why markets tend to discount the impacts Harvey will also make things hard for the Federal Reserve, which needs to continue to watch inflation and growth, both of which will be impacted by the storm, sending the former lower and the latter, due to gasoline prices, much higher.

In a Bloomberg article that is receiving national attention, we are introduced to a billion dollar problem at 666 Fifth Avenue for Jared Kushner, the president’s son-in-law, and his family’s real estate business.  The need to address the money borrowed on the property and limited sources in the world that can actually be considered for something so large has led a very big problem as the business hunts for cash.

The jobs report out on Friday showed yet another positive increase in employment in the U.S., marking the 83rd straight month, the longest streak on record.  The actual numbers were a little disappointing, but the little economic engine that could seems to continue to create jobs despite the forecasts that things have to slowdown.