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The Jobs Report Does Not Bode Well

The jobs report and slowing car sales may be the start of a general slowdown but we will not really know until end of July

joel-rossIt is still not clear what to make of the May jobs report. Even if you add back Verizon, the number is very poor. With the downward adjustment of March and April, May might not be an outlier. Car sales have dropped, energy jobs are not ready to return until oil hits $55 and cap ex by companies is still way below what should be happening. The messages are clearly mixed, but trending lower possibly. Europe continues to struggle to stimulate its economy but there is little left that Draghi can do and as the strikes in France show, there is little political sup[port for the kind of labor reform thatg is required to make Europe a well functioning zone. Italy is hopeless maybe for decades as there is no backing of the prime minister to reform labor laws. Greece will be toast for years to come. Portugal is barely solvent and Spain can’t get its political act together.

China is in a major debt crisis and the only hope it has to bail out is for a massive restructuring of loans by banks and government support to the banks to help cover the losses. There is still not the massive effort needed to shutter state owned companies. China will be a serious basket case for a few more years. To make matters much worse, Xi is moving the country back to 30 years ago before political and economic reform, and he is consolidating his own power as dictator. The only question is will he be assassinated in the next 2 years and will such an event shift things back to the reform era. His potentially being assassinated is a actively discussed rumor in China, and it may be feasible since he has ruined and jailed many powerful people.

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Joel Ross

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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