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If you add back the Toys R Us layoffs, the employment report was pretty much on target, and the prior months adjustments up made it even better than we thought. It is likely that unemployment will hit or better historic lows by October, wages are starting  to rise, oil prices are pretty steady and might decline a little, the dollar is up helping keep inflation down, and it is pretty clear the tariff battle with everyone except China will end by October, if not sooner. The EU is weakening even more, Mexico will make a deal in the next week or two, and Canada will follow. The EU will do a deal on autos along with Mexico and Japan and that will resolve the auto issue which is the big one. The EU now has no choice but to concede as their economy is weakening, Merkel is fading out, and there is political disruptions with the eastern nations going right wing, and Italy siding with them. The refugee issue is going to get much worse in Germany and in places like Netherlands, France and Belgium, and that is leading to more political problems. Those problems make it very hard for the EU to have a cohesive financial and economic strategy.  Add on Brexit, and Trump ramming them, and they will have to work it all out with Trump, and soon. By October there will be a deal and a new NAFTA. Likely there will be steel quotas and that will resolve that issue.

Even if the EU resolves the trade battle and Brexit, they are in real trouble. They just lost their chances for Iranian trade deals, and their budgets are still not under control. Merkel might remain in place for a while, but the old stability is gone, and that leaves Macron fighting for the lead, which he will not likely attain. All in, the EU will remain a weak and unstable place to invest. That means more investment dollars to the US. Latin America is no place to invest either. Asia and emerging markets may offer opportunities, but it is hard for the ordinary investor to go to these places without incurring big risks to their investment due to the corruption and very different way of operating in many places. Africa may be up and coming, but is not, for now, a place to invest for anyone but the people willing to take huge risks. Corruption is rampant and qualified governments is almost non existent there.

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Joel Ross

Joel Ross began his career in Wall St as an investment banker in 1965, handling corporate advisory matters for a variety of clients. During the seventies he was CEO of North American operations for a UK based conglomerate, and sat on the parent company board. In 1981, he began his own firm handling leveraged buyouts, investment banking and real estate financing. In 1984 Ross began providing investment banking services and arranging financing for real estate transactions with his own firm, Ross Properties, Inc. In 1993 Ross and a partner, Lexington Mortgage, created the first Wall St hotel CMBS program in conjunction with Nomura. They went on to develop a similar CMBS program for another major Wall St investment bank and for five leading hotel companies. Lexington, in partnership with Mr. Ross established a hotel mortgage bank table funded by an investment bank, and making all CMBS hotel loans on their behalf. In 1999 he formed Citadel Realty Advisors as a successor to Ross Properties Corp., focusing on real estate investment banking in the US, UK and Paris. He has closed over $3.0 billion of financings for office, hotel, retail, land and multifamily projects. Ross is also a founder of Market Street Investors, a brownfield land development company, and has been involved in the acquisition of notes on defaulted loans and various REO assets in conjunction with several major investors. Ross was an adjunct professor in the graduate program at the NYU Hotel School. He is a member of Urban Land Institute and was a member of the leadership of his ULI council. In 1999, he conceived and co-authored with PricewaterhouseCoopers, the Hotel Mortgage Performance Report, a major study of hotel mortgage default rates.

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