Economy: Mayday! Mayday! Real GDP Shrinks 4.8% Q1 2020

Q1 GDP contracts -4.8%, -$234B . Consumer -5.3%. Business -1.2%. Personal consumption -7.6%. Services -10%. Goods-1.3%. Business -8.6%. Q2 GDP estimated to contract by 40%    2- q1, GDP Shrinks

#ActiveAllocator Research: Official numbers that have come in today confirm our model’s projections. U.S. Economy slips into recession during Q2. Real GDP Shrinks 4.8% Q1 2020. Mayday! Mayday! And Q2 data is going to be 10 times worse.

Global Shutdown With US Economy Slipping into Recession

We modeled over twenty economic variables and all combinations point to probability of a severe recession. We hope our model is wrong. Despite unprecedented CARES life support stimulus, policy efforts, the combination of real economy shutdown and rapidly declining wealth has evoked sharply lower confidence. Total uncertainty about coronacrisis resolution, has prompted an abrupt retrenchment in consumers, corporate sectors, taxes and government finances. This threatens wide spill-over effects over the next few quarters.



USPS – Why Monetize Real Estate?

2-usps why monetize

President Trump has threatened to block federal aid for the U.S. Postal Service unless it raises shipping rates for online companies. We agree. And go a step further urging a monetization of USPS significant real estate assets.

The USPS has been in the spotlight in recent years due to the dramatic and ongoing changes affecting the industry and the change in way customers consume information. In other countries too,  liberalization of the European postal market and other pressures from alternative means of communication are forcing operators throughout the world to consider innovative ways to raise funds and improve balance sheets by rationalizing asset bases. In many countries the postal agency is the largest owner of real estate in a country, thus requiring an effective real estate strategy – but is seldom implemented. Postal operators around the world have already publicly announced their intention to close and monetize post offices in large numbers or are developing strategies to manage their existing portfolios.

Between 2007 and 2018, the Postal Service has experienced net losses totaling $69 billion and around $9 billion in 2019. Americans are mailing fewer and fewer First Class letters and USPS generating less revenue and cannot cover its operating costs. Declines in mail volume and the costs of its pension and health care obligations will continue to rise further exacerbating costs.  USPS should get out of the real estate business.

USPS – Why is it in the Real Estate Business?

President Trump has threatened to block federal aid for the U.S. Postal Service unless it raises shipping rates for online companies. We agree. The USPS is in dire financial straits and in desperate need of reform, and should remain a government agency. Outright privatization is not a viable option. USPS has been sitting on a huge real estate portfolio that it should monetize, for its core mission is not to be a real estate owner and operator.

1-USPS Why in the Real Estate Business

Protectionism for M&A Assets in U.S. to Increase in Coronacrisis

The United States has been open – that’s changing now. The Exon-Florio Amendment, adopted in 1988, sets forth the process for reviewing certain mergers, acquisitions and takeovers by non-U.S. persons of U.S.-located businesses. This is likely to be revised and strengthened amidst fears of foreign governments buying critical U.S. assets on the cheap. The discussions on foreign control have morphed into a debate over sovereign wealth funds activity in the United States.

1. protectionism to increase