Just to mix things up a bit this week I will send out my weekly piece on Wednesday instead of Thursday. Tomorrow I will be hoping on a plane to fly to Chicago as my daughter and her husband have come through with a World Series ticket for the old man. They moved to the city a couple of years ago and live in walking distance of Wrigley Filed and have become Cubs fans. All three of us still have the Orioles as out first baseball love but as I have said for years any real fan of the game has to root for the Cubs at least a little. I will be in the right field bleachers on Friday night with an Old Style in hand checking off a slot on the bucket list.
I could have just waited and written this on the plane tomorrow, but I hate working on an airplane. I prefer to sit back with a good novel and just ignore the world until we get where we are going. Digging around in my laptop bag and trying to work off notes and printouts while bouncing through the sky at 600 mph is just not my idea of fun.
It has been an exciting week so far. We are seeing a bunch of community bank earnings reports and do the most part we continue to see solid reports with excellent credit conditions and decent loan and deposit growth. Chris Marinac over at FIG Partners noted this week that Net Interest Income is rising at a majority of Banks and that tangible book value has advanced from 6/30 levels for 92% of the Banks thus far. Conditions remain excellent for the little banks and our Trade of the Decade portfolio continues to deliver market-beating results.
I was also delighted to see Barry Sternlicht of Starwood on CNBC this week saying that he is pretty bullish on US real estate. He told the network that “"I think you can see acceleration in spending, incomes are rising. I'm seeing that real estate markets, in general, have never been better in the United States." This is fantastic news for us as we not only own a lot of banks that have real estate as collateral for the bulk of their loan portfolios we own a lot of REITs and real estate related companies in all of our portfolios. We are not necessarily active buyers at current prices, but we are not selling any of our real estate related holdings either so the news that one of the largest owners of property in the world is bullish is happy news indeed.
I know Halloween is next week and all the spooks and goblins will be about and about along with children begging for candy but if you really want to be scared read this from Reuters this morning: “Britain said on Wednesday it will send fighter jets to Romania next year and the United States promised troops, tanks, and artillery to Poland in NATO's biggest military build-up on Russia's borders since the Cold War. Germany, Canada and other NATO allies also pledged forces at defense ministers meeting in Brussels on the same day two Russian warships armed with cruise missiles entered the Baltic Sea between Sweden and Denmark, underscoring East-West tensions.” I have been saying that geopolitical risks are the most important one the market faces and Poking Putin is probably the most dangerous game we can be playing in terms of risk right now. I have been saying since the Ukraine fiasco began that the West is badly underestimating Putin’s willingness to get into a shooting war with the West. While I would love to see a selloff, I would prefer it was not caused by World War 3.
Have a great week everyone! I am off to Chicago
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