A recent PunchLine Presentation

1. ABRAHAM GULKOWITZ
abe@gulkowitz.com
917-402-9039
2017 issue 19October 22, 2017
Seeking Magic…
Despite a string of unusual natural disasters, U.S. growth remains on a solid trajectory. Indeed, world growth has picked up and for the first
time since the Great Recession and Global Financial Crisis, all 45 industrialized OECD and related emerging-market countries are on a
synchronized expansion path. Financial markets have applauded this renewed potential and even more is likely if Washington finally proves
able to deliver on meaningful changes in taxes and other key agenda items. Inflation remains muted in the traditional sense, though many
wonder whether asset inflation is the real concern. One has to be leery of current benign financial conditions, an extraordinary run in the
markets, with the alternative scenario in which all these could be gone in a heartbeat. In many ways the current environment is
unprecedented, with high policy uncertainties and hair-trigger geopolitical tensions; accordingly, serious policy missteps could take a toll on
market confidence.
Storms, earthquakes, Nkorea, Vegas, wildfires... 'What's next?'
Federal Reserve does little to shake ‘buy the dip’ mindset
US central bank raises expectations for December rate rise
without rattling markets
Federal Reserve policymakers had a prolonged debate about the
prospects of a pickup in inflation and slowing the path of future
interest rate rises if it did not, according to the minutes of the U.S.
central bank's last policy meeting on Sept. 19-20…
Major automakers posted higher U.S. new vehicle sales
in September as consumers in hurricane-hit parts of the
country rushed to replace flood-damaged cars.
Will winning run for US equities continue?
Cash pours out of Spanish equity funds amid crisis
Despite the Hurricane Disasters, US Oil Exports are Breaking Records
Exports had risen to a 1.1 million barrel a day level by the time Hurricane
Harvey hit the Texas coast. The hurricane slashed exports dramatically for a
brief period… Record levels were reached in each of the last two weeks.
U.S. Oil Imports From Saudi Arabia Hit a 30-Year Low
NO JOKE
US 2018 midterms may yet weaken Democrats' clout
Sears Canada to Shut Down,
Leaving 12,000 Out of Work
Kurdish Oil Is a Wild Card for Markets
As crisis at Kobe Steel deepens, CEO says cheating engulfs 500 firms
The cheating discovery just got bigger…
Wal-Mart sees 40 percent online sales growth next year
Saudi Arabia’s economy is in recession
Disaster recoveries to boost sales
Senate Passes Budget Proposal
Passage of budget blueprint clears hurdle
in GOP push to overhaul U.S. tax code

2. The PunchLine...
2
October 22, 2017
In This Issue
Headlines and data appearing in The Punch Line came from widely available publications including
national and international newspapers, trade journals, economic and industrial bulletins and news websites.
• The Future Ain’t… (pg 8)
• Households… (pg 9)
• Household Perspectives (pg 10)
• The Likelihood of Unlikely Events... (pg 11)
• Credit (pg 12)
• The DNA of Business… (pg 13)
• Tech and Business Cycle (pg 14)
• The Market Roar… (pg 15)
• Real Estate and Construction… (pg 16)
• Select Real Estate (pg 17)
• Will Life Ever be the Same? (pg 18)
• Seeking Magic. . .
Despite a string of unusual natural disasters, U.S. growth remains on a solid
trajectory. Indeed, world growth has picked up and for the first time since the
Great Recession and Global Financial Crisis, all 45 industrialized OECD and
related emerging-market countries are on a synchronized expansion path.
Financial markets have applauded this renewed potential and even more is
likely if Washington finally proves able to deliver on meaningful changes in
taxes and other key agenda items. Inflation remains muted in the traditional
sense, though many wonder whether asset inflation is the real concern. One
has to be leery of current benign financial conditions, an extraordinary run in
the markets, with the alternative scenario in which all these could be gone in a
heartbeat. In many ways the current environment is unprecedented, with high
policy uncertainties and hair-trigger geopolitical tensions; accordingly, serious
policy missteps could take a toll on market confidence. (pg 1)
• In This Issue (pg 2)
• Dislocation, Dislocation (pg 3)
• A Fuller View… (pg 4)
• You Can’t Handle the Truth ! (pg 5)
• SuperVision… (pg 6)
• Engines of Growth
Despite a run of global statistics offering relief, confusing stress signals are still
emanating from around the globe . Uncertainties -- particularly from natural disasters,
terror and geopolitical concerns here and abroad, Brexit, and now in Spain, dangerous
issues regarding N Korea, China, Iran and others - - continue to confound investors and
contribute to intermittent bouts of haven seeking investment moves. But let’s not forget
that the political agenda in Washington is a significant one and much of the political
bickering may not be resolved easily or quickly… (pg 7)
Contact information:
Abraham Gulkowitz
phone: 917-402-9039 email: abe@gulkowitz.com

3. The PunchLine...
3
October 22, 2017
Dislocation, Dislocation, Dislocation
U.S. retail sales recorded their biggest
increase in 2-1/2 years in September likely
as reconstruction and clean-up efforts in
areas devastated by Hurricanes Harvey
and Irma boosted demand for building
materials and motor vehicles. The
Commerce Department said on Friday
retail sales jumped 1.6 percent last month
also buoyed by a surge in receipts at
services stations, which reflected higher
gasoline prices after Harvey disrupted
production at oil refineries in the Gulf
Coast. Retail sales increased 4.4 percent
on an annual basis.
US lumber futures have surged to a 13-year high as
disaster rebuilding looms and in light of the many
obstacles in the NAFTA negotiations… The cost of new
home construction (as well as renovation) will climb.
Lumber increased 427.60 USD/1000 board feet
Shares of US homebuilders are soaring despite
the slowing residential construction activity.
Short interest in the retail sector remains elevated

4. The PunchLine...
4
October 22, 2017
A Fuller View… Data Insights
The Catalan crisis poses a
threat to the European order
Fed must hike rates in face of hot U.S. labor market:
(Fed Official Rosengren)
The Federal Reserve must respond to "very tight" U.S. labor
markets by gradually raising interest rates or risk halting the
economic recovery, a hawkish Fed official said
U.S. employment fell in September for the first time in seven years as
Hurricanes Harvey and Irma left displaced workers temporarily unemployed
and delayed hiring, the latest indication that the storms undercut economic
activity in the third quarter.
U.S. nonfarm payrolls declined by 33, 000 in September, the
first negative reading in seven years, largely reflecting the
effects of hurricanes Harvey and Irma. Nonfarm payroll
growth for August was revised up from 156,000 to
169,000. The unemployment rate fell 0.2 percentage point
to 4.2 percent in September, the lowest since 2001, while
labor force participation rate rose to 63.1 percent from
62.9 percent in August. Meanwhile, average private hourly
earnings increased 2.9 percent (y/y) in September, up from
2.7 percent in August.

5. The PunchLine...
5
October 22, 2017
You Can’t Handle the Truth…
Let'sTake the “Con” out of Economics
Bankrupt U.S. retailers begin to
catch a break
An unexpected helping hand from creditors,
landlords and vendors is allowing more U.S.
retailers to stay in business following
bankruptcy with most of their stores and
employees in the fold. The new approach
marks a turning point for the beleaguered
sector, which has seen at least 19 brick-and-
mortar retail chains shut down the bulk of
their operations since 2014. Until this
year, most bankrupt retailers, including
American Apparel, Sports Authority and
The Limited, were dismantled during their
bankruptcy process. Investors and
companies acquired their intellectual
property and other assets, but refused to take
on their business as a going concern because
they saw little value in assuming costly store
leases. Instead, they often opted to revamp
some of the battered brands online
The U.S. consumer price index (CPI) rose 2.2 percent (y/y) in
September - - up from 1.9 percent in August . The pickup in
inflation reflected a surge in gasoline prices after Hurricane Harvey
disrupted production in several major refineries.
The core CPI, which excludes food and energy, rose only 1.7 percent
(y/y), the same pace as in the previous four months.

6. The PunchLine...
6
October 22, 2017
Super Vision - Select Signals
OPEC Secretary General urges U.S. shale oil producers
to help cap global supply
OPEC's Secretary General Mohammed Barkindo on Tuesday called on U.S.
shale oil producers to help curtail global oil supply, warning extraordinary
measures might be needed next year to sustain the rebalanced market in the
medium to long term.
⁎ But the number of US drilled but uncompleted (DUC) wells continues to
climb, especially in the Permian Basin. At higher prices, many of these
will be activated
Mexican vehicle exports have been trending
higher… This trend could get disrupted if the
NAFTA negotiations fall apart.
SPAIN
Catalan business exodus signals deep corporate concerns
China’s export growth picked up from 5.5 percent (y/y) in
August to 8.1 percent in September in U.S. dollar terms,
but still market expectations. Meanwhile, import growth
accelerated from 13.3 percent (y/y) in August to a stronger-
than-expected 18.7 percent in September (Figure 2). China’s
trade balance narrowed from $41.9 billion in August to $28.5
billion in September, the lowest level since March.
China’s 10yr government bond yield
hit the highest level since late 2014

7. The PunchLine...
7
October 22, 2017
Engines of Growth…
The Italian unemployment rate is
drifting lower but remains above 11%.
Major auto makers posted mostly solid sales gains in September
amid heavier consumer discounts and surging demand to replace
hurricane-damaged vehicles, giving the industry relief from months
of declining results.
Japan's Tankan survey turned out much stronger than
expected. The closely-watched manufacturing gauge for large
enterprises in Q3 soared to a reading of 22, up from 17 in Q2
which in turn had risen from 12 in Q1. The Tankan has been
making great strides. The quarterly manufacturing reading's
q/q gain ranks as in the top 21st percentile of all quarterly
changes back to 2004. The four-quarter change ranks in the
top 16th percentile. The level of the reading for the large
enterprise gauge in Q3 2017 stands in its 72nd queue
percentile and is the highest reading in 40 quarters making it
last higher before the onset of the global recession and
financial crisis in late-2007.
Connecticut Towns Grapple With Big
Funding Cuts Amid Budget Deadlock
European airlines face more cuts and consolidation
Panel finds U.S. washing machine makers hurt by LG, Samsung imports
The U.S. International Trade Commission found on Thursday that surging
imports of large residential washing machines harmed domestic producers, a
major step toward the imposition of broad duties or quotas on foreign-made
Samsung- and LG-brand machines.
Firmer data and brimming optimism over tax cuts
have powered renewed market momentum
Thyssenkrupp sees 'gigantic' demand for new-generation elevators
Thyssenkrupp is seeing strong demand for its new generation of elevators that
operate without steel cables or ropes, the unit's chief executive said on Friday.
The Fed chief is going to find 2018 hard going
Tax cuts will only complicate a difficult picture
for the Federal Reserve next year
the Caixin manufacturing PMI,
which tracks smaller private comp
anies, dropped from 51.6 in August
to 51 in September, pointing to
softer activity in China’s smaller
businesses.
The latest World Economic Outlook (IMF) has upgraded its global
growth projections to 3.6 percent for this year and 3.7 percent for next—
in both cases 0.1 percentage point above our previous forecasts, and well
above 2016’s global growth rate of 3.2 percent, which was the lowest since
the global financial crisis. The current global acceleration is also notable
because it is broad-based—more so than at any time since the start of this decade.
Christine Lagarde already has thrown down the gauntlet to urge countries not to
waste this opportunity of ongoing growth to make some of the needed changes they
postponed during recession and in the weaker portions of the recovery.
S Korea’s Kospi closed up at an all-time high as
investors expect strong third-quarter earnings from
local companies such as Samsung Electronics.
The U.S. central bank said the "continued effects of Hurricane
Harvey and, to a lesser degree, the effects of Hurricane Irma
combined to hold down the growth in total production in
September by a quarter percentage point."
Chinese exporters at the country's
biggest trade fair are more optimistic
about global demand now than six
months ago but Beijing's crackdown on
pollution is ramping up costs and product
prices, hurting smaller factories and
foreign buyers.

8. The PunchLine...
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October 22, 2017
The Future Ain’t What It Used To Be
US oil rig count still isn’t growing. Deliveries of new private jets are forecast
to drop to 630 this year, from 657 last year
and 689 in 2015
Crashing Prices for Used Jets… A
five-year-old jet sold in 2016 was worth only
56% of its original list price, on average.
That’s down from 64% in 2012, according to a
report by plane broker Jetcraft. The value
retention was as high as 91 percent in 2008.
Luxury jet buyers think resale value in
tough market
Members of the elite private jet set are
customizing their planes with full-sized
showers, beds and windows - but when it
comes to decorating, an increasing number are
steering clear of gold panels and gaudy
features, opting instead for the airborne
equivalent of beige.

9. The PunchLine...
9
October 22, 2017
Households – Brave New World
GREAT?
Holiday spending expected to increase
More than last year…
Walmart buys Brooklyn startup for same-day NYC deliver
There’s still no Walmart anywhere in New York City, but that hasn’t stopped the
superstore from trying to get its goods to your doorstep. The retail giant — in a move
that looks like a direct swipe at Amazon — will soon offer same-day delivery to certain
Big Apple customers, thanks to its acquisition of Brooklyn-based startup Parcel
In a broad display of economic optimism, for the first
time in six years, a majority of respondents to
McKinsey’s latest survey on economic conditions say
their home economies are on the right track.1
Moreover, nearly as many respondents expect their
economies to continue improving in the months ahead.
The buoyancy is especially pronounced in developed
economies, where respondents’ current views on
domestic conditions surpass by far what, earlier this
year, they expected would be the case now. Their views
on the world economy also remain more positive than
negative. But in respondents’ estimation, geopolitical
instability and asset bubbles have become more
pressing risks to near-term global growth in the time
since our previous survey.
Household reliance on credit is mounting…
Much of the increase comes from “nonrevolving” debt, which
is mostly auto financing and student loans
The NFIB's Index of Small Business Optimism in the US slipped to 103 in
September 2017 from a six-month high of 105.3 in August, and below
market expectations of 105.1. It was the lowest reading since November
last year, as 6 of 10 index components declined: Higher sales expectations
(-12 pp to net 15 percent); good time to expand (-10 pp to 17 percent);
plans to make capital outlays (-5 pp to 27 percent); expectations the
economy will improve (-1 pp to 30 percent); current job openings (-1 pp to
30 percent); and expected credit conditions (-1 pp to -3 percent). On the
other hand, earnings trends were flat (at -11 percent) and improvement
was observed for: Plans to increase inventories (+5 pp to 7 percent);
current inventory (+2 pp to -3 percent); and plans to raise employment (+1
pp to 19 percent).
The University of Michigan's
consumer sentiment for the United
States rose to 101.1 in October 2017
from 95.1 in September, way above
market expectations of 95. It was the
highest level since January 2004.
The current conditions index rose to
116.4 from 111.7 in September and
the gauge of consumer expectations
increased to 91.3 from 84.4.
Credit card delinquency rose for the third straight month in
September, data from JPMorgan Chase & Co and card issuer
Discover Financial Services suggested
US rent inflation seems to have leveled off, but is very
elevated, compared to other inflation components…
USA Is Smashing Its Clean Energy Targets

10. The PunchLine...
10
October 22, 2017
Household Perspectives

11. The PunchLine...
11
October 22, 2017
The Likelihood of Unlikely Events
Regulators Fret About Cyber Risk After SEC Hack
Can Germany Make an
Unwieldy Coalition Work?
► For weeks, the Brits and the Europeans have been
talking at cross purposes in the Brexit negotiations.
► EU toughens demands in draft conclusions ahead of
summit
Yahoo now says every single account was
affected by 2013 attack — 3 billion in all The jitters around Spanish assets persist
US cuts back visas after Turkish embassy arrest
Thousands blocked from travelling as diplomatic crisis escalates
Erdogan raises stakes in US spat with spies jibe
Turkish president challenges ambassador’s credentials after
suspension of visa process
Deutsche Börse intensifies efforts to pull euro clearing from UK
German exchange draws up plan to share profits from the business
with its members
PUERTO RICO
Puerto Rico’s Health Care in Crisis, Three
Weeks After Maria
Years of borrowing left the economy in a
precarious state.
Puerto Rico’s $74 Billion Burden… Helpless When Maria
Hit Now in need of multibillion-dollar aid, will it ever be
able to pay its debts?
Puerto Rico warns island on brink of 'massive liquidity
crisis'
RISKS
► Rough end to easy money in which investors and policy makers aren’t
prepared for shocks as central bank normalization unfolds…
► Asset bubbles…
► Surprising developments in new growth path as China slows…
► Disruption out of the rise of populism;
► Ugly BREXIT outcome with Britain’s move to leave the EU;
► Sectoral upheavals – retailing, auto sector , tech and media, etc…
► Severe consequences with debt problems in several regions – Hartford, CT
or Japan, etc
► A host of geopolitical concerns here and abroad entail dangerous
consequences… regarding N Korea, China, Iran and others - - and will
continue to confound investors and contribute to intermittent bouts of haven
seeking investment moves
► Financial markets that ignore these risks are susceptible to disruptive
repricing, and are sending [a] misleading message to policy makers
California Hepatitis A Outbreak
on Verge of Statewide Epidemic
THE NAPA FIRES OF HELL...
Tens of thousands of airline passengers have been told
their flights have been cancelled by the latest French
air traffic control strikes. The main air-traffic
controllers' unions are stopping work as part of a
national strike against the labour reform policies of
President Emmanuel Macron.
Spain's Catalonia crisis will likely
be be delayed, not resolved
How big is the risk of another Black Monday equities crash?
Thirty years on, the market is different but has some similar characteristics, from
high valuations to trading strategies that could accelerate a sell-off
Crude prices rose as Iraqi forces entered the oil-rich
city of Kirkuk, seizing territory from Kurdish fighters
and briefly cutting some crude output from OPEC's
second-largest producer.
Venezuela's deteriorating oil quality riles major refiners
Venezuela's state-run oil firm, PDVSA, is increasingly delivering poor
quality crude oil to major refiners in the United States, India and
China, causing repeated complaints, canceled orders and demands for
discounts, according to internal PDVSA documents and interviews
with a dozen oil executives, workers, traders and inspectors.
Americans are taking a knee on following football
We recently marked the 30th anniversary of the
stock market crash of 1987. October 19, 1987’s
massive one day plunge included a -20.5%
plummet by the S&P 500. It was also on October
19, 1987 that the 10-year Treasury yield was last
at or above 10%.
Moody's Warns of 'Likely' Hartford
Default, Decades of Deficits Ahead

12. The PunchLine...
12
October 22, 2017
Credit Matters - Know Risk
Many Excel in Strategy, Few in the Management of Risk
International Paper unloads $1.3 billion in pension liabilities
International Paper Co , a fiber-based packaging, pulp and paper
producer, said on Monday it would transfer $1.3 billion in pension
obligations to No. 2 U.S. life insurer Prudential Financial .
U.S. insurers have been buying corporate pension plans at a record
clip as rising interest rates and all-time high stock-market values
give companies an opportunity to offload them. Calculating they
can make more money from selling companies an annuity to cover
the cost of the pension plans, and then invest the proceeds in bonds
and other securities, insurers are competing to persuade corporate
America to sell them their pensions. Pension transfers of $13.7
billion were finalized last year, up 1 percent from 2015, according
to LIMRA, an industry trade group. The figure is the second
highest annual total ever recorded, LIMRA said. The average
corporate pension fund was 83 percent funded in May, according
to Mercer Investment Consulting. In June, consulting and
outsourcing services provider Accenture Plc transferred $1.6
billion in pension obligations to insurers American International
Group Inc and MassMutual.
National regulators in Europe have clashed over
whether asset managers should face more stringent
scrutiny after Brexit, as concerns mount that the UK’s
vote to leave the EU will trigger upheaval in the fund
industry.
Luxembourg’s financial watchdog, the Commission de
Surveillance du Secteur Financier, warned Brussels against
introducing stricter regulation of mutual funds on the back
of Brexit, arguing this could cause irreparable damage to the
EU’s position as a leading centre for asset management
globally. Its warning came after the European
Commission, the EU’s executive arm, put forward proposals
to beef up the powers of the pan-European financial
watchdog, the European Securities and Markets Authority.
Caesars Entertainment Corp has an eye on expanding its
Caesars, Harrah’s and Horseshoe brands in the United
States and abroad after its casino operating unit emerges from
nearly three years of bankruptcy with $10 billion less in
debt. Industry analysts said it may be too late to catch up
with rivals like MGM Resorts International, Wynn Resorts
Ltd and Las Vegas Sands Corp that have spent years
investing in high-growth Asian markets like Macau as U.S.
gambling has cooled. “Twenty-five years ago Caesars was
the premiere name internationally but they dropped the ball,”
said Greg Bousquette of investment banking firm G.C.
Andersen Partners, which advised unsecured creditors during
the Caesars bankruptcy. Caesars has spent years struggling
to manage more than $25 billion in debt, much of it taken on
in 2008 when Apollo Global Management and TPG Capital
led a leveraged buyout of the company. The operating unit
filed for bankruptcy in early 2015. Caesars emerges from
Chapter 11 with a simplified structure by merging with
Caesars Acquisition Corp and other affiliates, and former
creditors will hold a majority of the stock.
Bond ETFs have performed well, even under difficult market
conditions. That has fueled their growth even more with over $600bn
outstanding. This success, and the fallacy of composition that if each
ETF is liquid, the overall market is, may be a fundamental
vulnerability if a significant economic shock hits bonds.
Puerto Rico
The 8%-coupon bond “maturing” in
2035 is trading at 33 cents on the dollar
Venezuela’s longer-dated bond yield is approaching 35%
European junk bonds are yielding 2.2%.
India’s non-performing loan balances have
been rising quickly over the past few years.
“Dry powder” (uninvested capital or uncalled
commitments) for private debt funds hit a
new high.
China’s ratio of household debt to gross domestic product rose
to 45 per cent in the first quarter of this year — far beyond the
emerging market average of 35 per cent. And total debt,
including for companies, is now more than three times GDP

13. The PunchLine...
13
October 22, 2017
The DNA of Business
Reconfiguring Industries to Define Growth
Safran hopes new fuel-efficient jet
engine can reshape air travel
French aero engine maker Safran unveiled a new engine
prototype on Tuesday that would radically cut fuel consumption,
potentially reshaping air travel from 2030. The Open Rotor
engine, which places previously hidden whirring parts on the
outside to capture more air, was developed with European Union
backing and is being tested in specially built facilities at a
French military base near Marseille. Shaped like an elongated
egg with two rows of blades at the back, the engine aims to burn
15 percent less fuel than current conventional turbofan engines,
which have also improved significantly in recent years. Clara
de la Torre, a top European Union research official, said the new
type of engine could help airlines cut air fares because it requires
less fuel. Whether the engine enters service, however, depends
on the strategies of airplane makers such as Airbus and Boeing,
whose best-selling single-aisle planes are expected to be
renewed in around 2030.
Ford to cut costs $14 billion, invest
in trucks, electric cars: CEO
Ford Motor Co plans to slash $14 billion in costs over the next
five years, Chief Executive Officer Jim Hackett told investors on
Tuesday, adding that the No. 2 U.S. automaker would shift
capital investment away from sedans and internal combustion
engines to develop more trucks and electric and hybrid cars.
Hackett told investors that Ford will be open to more partnerships to
spread the costs and risks of simultaneously developing new technology
while still churning out profits from its legacy business of selling trucks
and sport utility vehicles in North America. He cited a partnership with
ride services company Lyft to develop technology to deploy self-driving
cars. Hackett, former CEO of office furniture maker Steelcase Inc, took
the top post at Ford in May, after his predecessor Mark Fields was pushed
out. At the time, Hackett promised investors a statement within 100 days
as to how he would improve the "fitness" of Ford to compete as the auto
industry becomes more digital, more electric and less wedded to selling
one vehicle at a time to individuals.
Thyssenkrupp is seeing strong demand for its new
generation of elevators that operate without steel
cables or ropes, the unit's chief executive said
US autos’ average fuel efficiency remains
stuck at around 25 mpg since 2014
Amazon’s potential foray into the prescription
drug market is pressuring US pharmacy shares
Costco’s entry into the grocery delivery
business wasn’t helpful for the stock price
Wal-Mart sees U.S. online sales
soaring 40 percent in fiscal year 2019
The Nordstrom family has suspended efforts to take the department-
store chain private after struggling to raise enough financing for the
leveraged buyout, in the latest sign of how much investors have soured
on the retail industry.
The Kobe Steel problems have expanded… with hundreds of
companies effected globally. As an example, Boeing may have
to swap out falsely certified aircraft parts. Kobe Steel’s stock
continues to tumble, and the company’s bond yields have spiked
Netflix Inc added more subscribers
than expected around the world in the
third quarter and projected growth in
line with Wall Street forecasts, saying
it had a head start on rivals as internet
television explodes globally
Ford to recall about 1.3 million vehicles in North America
The No.2 U.S. automaker said the safety recall is due to frozen door latch
or a bent or kinked actuation cable in the affected vehicles, that may
result in a door not opening or closing.
GE Slashes Outlook, Will Exit Businesses Totaling $20 Billion

14. The PunchLine...
14
October 22, 2017
Tech and the Business Cycle
Click on the Revolution
As part of its focus on virtual and augmented reality, Microsoft has
acquired Altspace VR, a struggling virtual reality social network that had
been set to shut down until Redmond came calling. Microsoft also
used a San Francisco event to show off the latest Windows-based virtual
reality headsets, including a new $499 model from Samsung and
announced a free Halo-themed VR game. Also at the event, Intel
announced it would broadcast some of the upcoming Winter Olympics in
virtual reality.
► VC companies have the money to stay private longer, delaying exits
Tech stocks have seen more upside
earnings surprises than the overall market
The e-commerce giant is asking cities to bid
to be home to its second North American
headquarters

15. The PunchLine...
15
October 22, 2017
The Market Roar…
History May Not Repeat, But It Often Rhymes
History Receipts Itself
The tax-reform expectations (and to some extent the
renewed strength in the dollar) have been helping small caps
The STLFSI measures the degree of financial stress in
the markets and is constructed from 18 weekly data
series: seven interest rate series, six yield spreads and
five other indicators. Each of these variables captures
some aspect of financial stress. Accordingly, as the
level of financial stress in the economy changes, the
data series are likely to move together.
Nikkei 225 Posts Longest Winning Streak Since 1988
Latest = 1509

16. The PunchLine...
16
October 22, 2017
Real Estate and Construction Outlook
Landlords of strip malls are trying to take the chill
out of the air by adding outdoor entertainment
programs, in hopes of attracting more shoppers in
an era of declining foot traffic
Canadian pension fund OMERS and U.S. buyout
group Madison (MCN.N) are acquiring Berlin’s
landmark property Sony Center from Korea’s
national pension fund NPS for 1.1 billion euros
($1.3 billion), the companies said on Monday.
The eight buildings at Berlin’s central square
Potsdamer Platz include BahnTower, the
headquarters of national railway company
Deutsche Bahn [DBN.UL], as well as office and
retail space used by tenants such as Sony, Sanofi,
Facebook and WeWork. They also house cinemas
and residential units. NPS had bought the
property for $767 million from Morgan Stanley in
2010. Ontario Municipal Employees Retirement
System (OMERS) will acquire the property
through its Oxford Properties unit, which recently
invested in Paris’ La Defense district and after the
Berlin deal will have 2.3 billion in continental
European investments. Most of its other assets are
located in London.
Retail vacancies are up 10%
in Manhattan and Brooklyn
US retail vacancies held flat in Q3 amid rampant store closures Fitch predicts
correction in
‘Highly
overvalued’
London office
market

17. The PunchLine...
17
October 22, 2017
Select Real Estate Reference Points…
Vacancy rate for apartments across the U.S. climbed to 4.5% in the
third quarter. The apartment market in the U.S. remained sluggish in
the third quarter as the vacancy rate climbed to its highest level in five
years. In all, apartment vacancy rates increased in 50 of 79 metropolitan
areas, with many major cities experiencing high levels of construction
that outstripped demand, according to data released this week by
apartment-tracker Reis Inc.
Even as apartment supply ticked up in many markets,
just six of 79 metro areas saw declines in effective
rents for the third quarter, writes Barbara Byrne
Denham at Reis. The multifamily sector is containing
the effects of increased supply on occupancy, as the
national vacancy rate increased by just 10 basis points
during the third quarter to 4.5%, a smaller-than-
expected uptick, Reis said Tuesday. Even as vacancies
rose during Q3, so did both asking and effective rents
on a national basis.
REITs have been on a tear in 2017
Through the end of September, REITs have
issued a record $37.7 billion in unsecured notes.

18. The PunchLine...
18
October 22, 2017
Will Life Ever Be the Same?
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