Friday, March 1, 2019

Update: Federal Reserve Balance Sheet




During Fed Chair Jay Powell's testimony this week, it was made clear that the Fed Chair is looking to walk back comments made in December 2018 that the balance sheet reduction was on 'autopilot'. This comes just months after Powell first made the ‘autopilot’ statement and equities responded with a torrid sell off, falling close to 20% before ultimately bottoming on Christmas Eve. 

This turn around can lead investors to a couple of conclusions. First, the FED clearly takes into consideration ‘financial conditions’ or more likely, equity valuation / stability. The FED put, initially thought lost during chair Powell’s first few months, is alive and well. Second, the financial sector and the economy as a whole are less able to absorb a tightening of monetary policy than previously thought. 

Throughout 2018, there was substantial discussion that the FED balance sheet runoff was going smoothly, that the economy was humming along, with some commenting that the global economy was expierencing ‘synchronized global growth’. The below chart shows how far the FED has moved, after growing the balance sheet by over $3 Trillion, just ~$400B has rolled off. Relative to the increases, this was nothing and yet markets roiled up, volatility spiked, credit spreads were widening, and liquidity all of a sudden was being talked about as a risk. Economic growth may have even slowed as result, as businesses and consumers, concerned at the equity volatility, delayed spending / business investment in Q4. Now, the FED appears to have backed themselves into a corner on the balance sheet. The party’s back on, so let’s get up and keep dancing.





Monday, January 8, 2018

Photo Post #9: Roosevelt Island, New York NY

Panoramic View of Manhattan from Roosevelt Island, January 2018. © Chris Besserer


© Chris Besserer

The view of Manhattan from Roosevelt Island. Temperature, 5 degrees Fahrenheit.
© Chris Besserer

© Chris Besserer





Wednesday, September 13, 2017

Photo Post #8: Montreal, Canada


Montreal street photo after New Years Eve snow, 2016.

© Chris Besserer

Wednesday, December 14, 2016

Google 2016 Year in Review


I find this video fascinating every year.... Enjoy.




And for reference, here is 2015 in review:




Tuesday, August 2, 2016

Amazon should purchase Ticketmaster or Live Nation

Amazon buying a ticketing service provider may seem odd at first glance. Yet, below I will explain why there are benefits to an acquisition of this kind. If Amazon were to purchase Ticketmaster (Parent company is Live Nation), it would be able to leverage the existing ticket distribution service to bring in more revenue and target more specific customer needs through the newly obtained customer data.


First, visitors to Ticketmaster and Live Nation sites will now redirect to Amazon.com/Ticketmaster or Amazon.com/Tickets. That way, additional traffic is directed towards the online marketplace. In 2015, Live Nation processed 530 million tickets, which is substantial traffic. Amazon.com is currently in the top 5 of sites visited in the USA. I am sure Jeff Bezos would like to see them as the #1 site. “The Everything Store” would gain an additional piece to that puzzle, a portal for live sporting events, concerts and more. Within the ticketing section, there will be links to merchandise for those same events. This leads to the next big benefit of the acquisition.

Customer Data. Amazon wants to know as much detail about its customers as possible. With the addition of a ticketing service, users will link their Amazon accounts to their ticket purchases. Amazon will now know what concerts, sporting events, or plays you like to attend. That information will enable Amazon to directly target products to individual customers based on music tastes, sporting tastes and so on. As time goes on, Amazon will understand who your favorite teams, what games you go to and when, and then be able to offer you deals on select merchandise heading into a football season, or into a game that they know you will be attending.

A scenario plays out where you log onto Amazon.com/tickets and purchase two tickets to the upcoming Knicks game. On the way to the cart, offers will pop for a Knicks hat, or a Carmelo Anthony jersey. Of course, free shipping is included with Prime. Certainly you are more likely to purchase that merchandise than someone that isn’t about to attend a game. This plays into Amazon’s strategy of being able to cater to customers on a personalized level. For the next two weeks leading into that game, Amazon can target specific products to you.

At a current market cap of $5.5 Billion, an acquisition of Live Nation will be a rounding error for Amazon. They could even purchase Ticketmaster from within Live Nation for less. This would be just another piece to the puzzle of becoming the “Everything Store” that Jeff Bezos has envisioned. Lastly, I haven’t mentioned the benefit of acquiring the ticketing business itself, a sector that has a long runway to grow considering the preference of live sporting/concert events that the younger generation has.