The Global Irony Machine is spitting out some unbelievable stories lately. Wouldn’t you say? I could go to town on the AOC show over here in contrast to the Venezuelan socialist collapse over there, but that’s too easy. I’d mention the Catholic School Smirk story owning the media, or Macron critically dissecting the Brexit folly, but those are no fun. I’m pretty amazed at what the head of Citadel is doing in broad daylight. Love to talk about it.
Ken Griffin just payed $238 million for a penthouse at 220 Central Park South. No, he doesn’t get Central Park as his private backyard. He just bought an apartment nearby with a view of it. It’s just a few blocks from Columbus Circle.
Normally, I don’t mind the rich and famous plunking down obscene numbers on homes, because again, I’m a capitalist who believes your home is your castle. But this was the highest price paid for a home in the history of our country. By the way, if you ask people, “Who do you think the U.S. FED trades through?” they respond unanimously, in chorus, without a shadow of a doubt – “Citadel.” So let’s assume the President’s Working Group (GS, MS, C, BAC, JPM, WFC) is sending their orders to Citadel.
I’m amazed that the guy that runs Citadel, who potentially “runs markets” on behalf of the Federal Reserve, instead of keeping a low profile, is roaming the country leaving a trail of record real estate purchase records in his wake. Griffin bought the most expensive apartment in Miami for $60M in 2015. He bought the most expensive penthouse in Chicago for $58.75M. He recently dropped $122M on a townhouse near Buckingham Palace.
I’d be willing to bet he didn’t haggle much over the $238M price tag on Central Park even though there are signs of the high end real estate market weakening everywhere. Poor Dick Cavett, as one example that jumps out, has the home he’s owned for 50 years out in Montauk for sale. He was asking $62 million in 2017. He’s now asking $32M. A pittance! There are cases like this all over the east-end of Long Island. Ken Griffin is impervious and paying record high offers.
Remember, we’re not going crazy over this in the wake of Peak Outrage weekend in America. We’re just noticing the irony in things like Ken Griffin shattering U.S. real estate records, city by city, while the rest of the wealthy address the pending “global slowdown” in the Davos echo-chamber, and the wealth divide becomes dinner table conversation in America. It’s all good folly now that will end in a fireball later.
For all I know, Ken Griffin could be making the last big ticket purchase before the global economy disintegrates into a dust ball. The White House admitted this morning that U.S. growth could be zilch for the first quarter due to the shutdown. Global Purchasing Managers Index data came out and it left a series of stink bombs on the tape. Japan’s manufacturing PMI fell to 50, the lowest reading since August 2016. Germany Manufacturing PMI slipped into economic contraction at 49.9 with the lowest reading in 2 years. Then French PMI disappointed. The “Yellow Vest Special” print weighed on the euro.
The currency is weakening this morning as European yields are softening. Draghi is already out with a statement: “significant stimulus is still needed to sustain inflation.” Equity markets love stimulus so we shouldn’t be shocked European indices are wallowing in positive territory. The U.S. drops PMI data at 9:45 and I’ll be glued to the screens for that one. Don’t look now if you’re short IEF (7-10YR UST’s) like I am because the U.S. bond market just followed with a leg higher of its own. I guess we should expect the U.S. to miss 53.5 expectations. I’m just looking for the data point that pushes the dollar index up through its 50 day moving average so it can sail again.
The equity markets rotated furiously again yesterday and were mysteriously rescued off the 2612 lows. It could have been Ken Griffin, via Citadel, for the President’s Working Group, on orders from Steve Mnuchin, but at this point, we don’t know. It just seems awful fishy to me that on a day the S&P is breaking down below its 50 day moving average under the weight of Capital One Financial and Whirlpool, that it gets rescued by sharp rallies in IBM and Procter & Gamble. What is it 1980?
As long as the S&P is wallowing between moving averages, we’re here watching our positions, and waiting for the next opportunity. Between 2617 and 2750, I’m just taking pictures and notes. Outside that range, things change. On a break to the upside, I’ll probably be out of my short positions, cheering on cannabis stocks in disbelief of the S&P. On a break to the downside and I’m going to start preying with an “e” again.