Forget The Fed; We’ve Got Oil And “Elona Musk” To Talk About

Who would have thought two weeks ago that oil would be under $100 today?

Anyone who predicted this deserves some kind of prize. Maybe from Nobel.

It really didn’t make any sense considering the circumstances. Yet here we are anyway this Wednesday, March 16, 2022…

All thanks to China, it would seem.

That country’s lockdowns have even pushed the Federal Reserve’s move today out of the spotlight. Let’s face the facts: That’s quite an impressive feat.

It’s more impressive still considering the other competition out there: the ongoing war in Ukraine.

China clearly has a lot of power and influence on the world stage, just in case, we didn’t already know that.

There are two stories I can easily transition to from here, but let’s start with yesterday’s Yahoo Finance piece about “Supply Chains: ‘Complete Chaos for the Shipping Industry’ Amid Russia-Ukraine War and China Lockdowns.”

(Again, the Fed doesn’t factor in.)

It should come as no surprise that Russia is retaliating against increasing public and private sanctions against it. Putin just signed a law, for instance, allowing domestic airlines to hold onto planes they’re renting from foreign companies. And something similar seems to be playing out with other modes of transportation.

As Yahoo reports, “Shipping giants including Switzerland-based MSC, Denmark’s Maersk, and France’s CMA CGM announced this month that they would halt cargo bookings to and from Russia until further notice…” But then there’s this paragraph:

“We have about 50,000 of our containers in Russia today,” Maersk Chief Executive Soren Skou said. ‘Most of them are empty. They are our property. We need them, and we are very reluctant to leave them in Russia. For this reason, we still have some port calls in Russia.

That’s not just a company or even an industry-specific problem. It’s a global one.

More Non-REIT News to Know About

As the article goes on to note, there are cargo ships stuck everywhere right now – with an intense emphasis on the word “stuck.” Russian ships are blocked from the U.K., E.U., and Canada, while “more than 100 ships and their crews are stranded at Ukrainian ports.”

Elisabeth Braw, a senior fellow at the American Enterprise Institute, told Yahoo Finance Live:

All of that is… leaving all these vessels traveling around the world with cargo already on board, with cred already on board, leaving them in complete no man’s land. Where are they supposed to go with their cargo? They can’t deliver it. They can’t pick up the new cargo… [This is] complete chaos for the shipping industry.

Amidst this upheaval, Fox Business reports that “Europe burned 51% more coal for electricity in the first week of March compared to a year earlier.” Obviously, that’s Russia-related.

Even as commodity prices rise in general, it reads, “European utilities have been getting increasingly reliant on coal.”

In even more bizarre news, I’m going to indulge in some business gossip by pointing out how Tesla (TSLA) founder Elon Musk challenged Putin to a duel the other day for Ukraine. On Twitter, of course.

Because where else would you issue such a challenge in the 21st century?

Naturally, there was a response, including from Chechen leader and Putin ally Ramzan Kadyrov, who called him “effeminate” and “Elona”.

So what did the world’s richest and perhaps most eccentric man do in response? He changed his name on Twitter to “Elona Musk” while trash-talking back as good as he got.

Once again, I have to conclude that man is nothing short of fascinating.

The World According to REITs

One more thing about “Elona Musk”, and one that’s actually relevant to real estate investment trusts (REITs)… He also took to Twitter this week to say:

… for those looking for advice from this thread, it is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation ishigh.

I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw.

“FWIW” stands for “for what it’s worth” in cool-kid language… which I incidentally had to look up.

As the richest man in the world, Elona can handle that risk. As something far from it though, I’d recommend focusing on the first part of his tweet. Namely with REITs.

This could easily include those of the office variety – if they’re quality companies trading at worthwhile valuations – considering Yahoo Finance’s assertion that “a lot of people are spending big bucks to look good to return to the office.”

The reopening is really here, everybody, and the REIT sector is ready for them. That makes for one more reason to stay up to date on what’s going on there, like how:

  • UMH Properties (UMH) added about 1,100 homes to its Fannie Mae credit facility for total proceeds of around $25.6 million. The remaining term of its existing facility matures in 2030 at a 4.25% fixed rate. The proceeds are going toward further asset investments.
  • AvalonBay Communities (AVB) launched a $500 million U.S. unsecured commercial paper note program. It plans to use the proceeds for general corporate purposes.
  • Host Hotels & Resorts (HST) named Deanne Brand as senior VP of strategy and analytics, and treasurer. Meanwhile, Padmanabh Yardi will become senior VP of information technology.

And last but not least, we’ve got this…

(Click on image to enlarge)

(Source: The Daily REITBeat)

Brad Thomas is the Editor of the Forbes Real Estate Investor.

Disclaimer: This article is intended to provide information to interested parties. As ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.