Introduction

This quarter’s commentary will be in a new format, more conversational, as we attempt to bring the flavor of our in-person gatherings to readers. We want to make everyone aware that we have a new employee at the Rikoon Group and begin by introducing Elizabeth Hook, who joined us from the Gerald Peters organization. Elizabeth helped us record the discussion on a high-tech device and supervised the initial editing.  The talk itself is available on our website in the “Publications” section.

Rob: Let’s find what topics are of interest to people who took the time today to come.

Guest: There are so many predictions of an upcoming recession.  I understand and appreciate your point of view regarding what we hear and see in the financial media, that you really can’t trust it and that it is basically entertainment, so I would love for you to give your assessment of where it looks like we’re going over the next year, given all the dire forecasts.

Rob: Let’s take the word dire and remove it from the conversation because everything today seems to be “dire.”  Are we headed towards recession? As you all know, it’s inappropriate in our industry to pretend to have a crystal ball but let’s have one today, just for fun. We are statistically overdue for a recession, given the current expansion is now over a decade old and global growth is slowing.  The U.S. is already in a slow growth economy that hasn’t changed much over the last year. However, the U.S. still has, by far, one of the strongest economies in the world.

China is growing faster but they have their own set of challenges that we will come back to later. The reason we haven’t had an official recession in so long is that we are in a kind of new, unchartered territory where most of the developed world’s governments have forced interest rates so low that they’re almost at or below zero. Today, investors earn 2 percent on a U.S. corporate bond and that’s one of the best returns available in the global bond market. That is to say that interest rates in the U.S. are among the highest available because our economy is growing the fastest.

There is a strong correlation between the supply and demand of money and the level of where interest rates settle.  We have a tremendous, unprecedented supply of money and low corporate demand for funds for physical expansion.  We may not have another traditional recession for a long time, due to artificially low rates but as Japan has discovered, that is not necessarily a good thing because it also means that we may not have another strong economic growth period either.

If the government continues to  lead the economy by insisting on globally coordinated low controlled interest rates between 0 to 1 percent interest, the worlds’ economies may only be capable of growing at this same, 1 percent level, which is certainly not enough to keep standards of living rising or match the rate of population growth in the developing world. So, the short answer about when a recession will arrive is it would already have been here except for the U.S. Federal Reserve, the European Central Bank and the Bank of Japan’s coordinated activities.

We can’t afford to have a deep recession or real political instability might ensue.  The same is true for Europe and China. China has 1.4 billion people and they can’t afford to have widespread riots which is what would happen if they had widespread unemployment, rampant inflation or any of the other results of an economic downturn.  This is what makes the recent violence in Hong Kong so dangerous to the Chinese authorities. So, we have this situation where governments influence the markets by lowering interest rates and tamping down bad news.  We could have a recession, and no one would announce it so most people would go on unaware. The arts and agriculture are already experiencing a deep recession, and if you’re in the auto business, it’s pretty darn rough. Sales are down. Inventory is way up.

Guest: Yeah, they say the tariffs are cutting people to the bone.

Rob: Manufacturing jobs are also down in the Midwest as automation is increasing and so most people we know who have expanding job opportunities are in the knowledge businesses.   There are huge employment opportunities if one is technically trained.  Think about the people you know who are in their thirties that have career paths with bright and expanding futures.  What industries are they in besides technology and finance? Does anyone know someone who is in their thirties who has a great job?

Guest: The film industry.

Rob:  Entertainment. Absolutely. A very good example. Film and TV are among America’s most vibrant industries.

Jeff: It’s like a pyramid, however, because people at the very top make big money and lots of people further down the food chain, even in film, do not make much money.

Rob: Correct.  I do know a number of young people in the film industry who are freelancing, and even though they are busy, most of them are making just enough to get by.  Entertainment is a growth industry.  But what about cars? Did you know that GM and Ford are not making small cars anymore? There is no profit in making a small vehicle, so it’s become very difficult to find a compact car.

Kyle: Ford dropped their entire line of sedans.

Guest: Except for the Mustang!

Rob: One of the traditional indicators of a healthy economy is low unemployment, which is where we are now. There are a lot of jobs, especially service jobs, being advertised. People can work hard at service jobs, but the pay is often inadequate to support a family, so some working people still need government help.  Typically, to be predictive of a recession, unemployment would need to be going up but it’s not. It’s fairly stable at a low level. Low wages and continued slow growth are the most likely scenario for the U.S. economy, with or without a trade deal on the China front, so we are predicting continued very low interest rates.

I am fascinated by what’s going on in Europe and Japan with zero interest rates, even negative interest rates. Negative interest rates mean that when you give your money to a government or a bank, they give you back less when it gets returned to the depositor.

Negative interest rates have been the norm in Japan for several years.  It’s weird but they put up with it and it has not spelled the end of their civilization because they are a wealthy society but not a risk-taking one. Europe is starting to look more like Japan than the U.S. in the sense in that European governments have ceded control of their economic policy to bureaucrats in order to maintain domestic political stability. Domestic stability is more important than economic growth, so the European markets haven’t gone up much for years.   The U.S. market has gone crazy as it’s up 20 percent so far this year.

Guest: Why is that?

Rob: It’s because there is no other place that most people can think of to put their money. Why wouldn’t you put your money in stocks when the alternative is 0 to 2 percent in bonds?

Kyle: Remember that there is a timing bias there as well because in the final quarter of 2018, the stock market dropped around 16 percent. The stock market started 2019 from a low point. So, when we look over the last 12 months, the stock market’s actually only up around 3 percent. The market seems to move a lot with the news on U.S. – China trade negotiations.

Rob: Trump’s negotiating tactics with China are difficult for the public to figure out and there is good and bad news in that. China is the main rival to the U.S. for economic power in the world.  We just hosted a family from Hong Kong here in Santa Fe and we talked a lot about the rivalry between the U.S. and China in the high-tech businesses of the 21st century: artificial intelligence, biotech, alternative energy and food production and of course the ecommerce industries.  It turns out that it’s very challenging for us to invest in China.  Why is that?

Kyle: Well, we in the West have very little knowledge of the actual performance of companies based in China because they do not abide by the same accounting standards. There is also tremendous Chinese government influence on companies so at any moment, the government can step in and change how the company trades their stock or put regulations in place that fundamentally change the ground rules for their hands-on business.

Guest: I have a real-life example of what you are talking about.   I have a friend who speaks perfect Chinese and made a living dealing with China for the last 20 years.  He’s now moving to Japan because he’s tired and frustrated of dealing with a high level of lying from the Chinese government.  It has gotten to the point where he cannot honestly tell his clients what anybody is doing or what anybody is saying because Chinese officials are holding back news and information so carefully that it’s impossible to do business there any longer.

Rob: That brings us to the topic of international relations and the impact that President Trump has when he makes threats about breaking traditional economic alliances with Europe.  When negotiating and putting on a show, which is pretty much all the time, I believe he speaks and acts from a purely mercantile point of view. His goal is to show that he’s gotten a great deal for America. There is little to no political vision about values, ideology, or anything really, except commerce.  In fact, he may be able to cut better deals one by one rather than participating in regional trade agreements. If the President’s negotiating strategy fails, it will push us into a recession. Our squaring off against China has already impacted the Chinese economy which has slowed down markedly, perhaps even by half.

Kyle: I would say their growth rate went down from nine to seven percent.

Rob: In reality, they probably went from 6% to 3%. The U.S. growth rate has certainly slowed as well, to under 2 percent and really we need to be at 4 percent to be growing enough to create  jobs, stimulate new household formation and to justify confidence in increased corporate earnings –  all things that make for a sustained bull market in stocks. The bull market in U.S. stocks is quite aged, but that doesn’t mean it inherently has to go down. When interest rates are 1 or 2 percent, people are probably not going to take their money out of the stock market because the good feelings that come from a reduction in risk are not as strong as the thrill of maybe being in a market that will continue to go up. There was and continues to be a lot of momentum behind the stock market’s rise because bonds and cash are poor alternative sources of total return and likely to stay that way.

Guest: What does this mean and how did we get here?

Rob:   Most Western governments, having the debt loads that they carry, cannot afford interest rates to be at 5 percent or even 4 percent as at those levels, it becomes mathematically impossible to pay interest on the roughly one hundred and eighty trillion dollars of global government debt. That equates to around a hundred thousand dollars of debt per person on the planet out there or two and a half times the planet’s annual economic production. You name it and we pay for it with debt. The amount we owe here in the U.S. is going up 1 trillion dollars a year. Our interest payments aren’t going up because the government has forced interest rates to come down because if they didn’t force them down, they might not be able to sell more bonds to fund the increased amount of debt or pay back current investors what they currently owe.  Debt payments would eventually take up our entire defense and operating budgets. In essence, there is an artificially imposed constraint on interest rates that people can earn in bonds and cash because of the high amount of debt.

Kyle: Then you also incentivize the taking of more debt when you have interest rates so low. Along the lines Rob was talking about, think of Apple.  The company sits on billions of dollars in cash, and they would still rather take out additional debt than to spend their own cash because it’s so inexpensive for them to borrow. Why spend my own money when your money is cheaper?

Rob:  A country whose debt goes over 100 percent is considered to be on a trajectory to default.  Traditionally, nations have always issued as much debt as they can because they can to their bondholders, “We’re keeping your money, too bad.”  This is already being done in several countries. This doesn’t mean everything goes to hell, just that the rationale in place now that supports high asset prices, meaning stocks and real estate, is increasingly tenuous. Money has to go somewhere. It can sit idle at 0% return or it can go into stocks, as it has been or change over to safer bonds, which is unlikely, or it can go into real estate or private ventures.   There’s no saying when the current paradigm comes to an end or what really will happen when rates do eventually rise or there is a deep economic contraction.

Guest: What happens if there is a recession and the rates are already so low?

Rob: If we have a deep recession and rates are 0% or 1%, there is little the central bank can do to stimulate economic activity other than support the government in its exerting greater control over private enterprises.  When it happens, we could be stuck in a recession for a long time –  Japan has been in a recession for 30 years but it doesn’t mean that people are not enjoying life in Japan.  The quality of life there is apparently very high but the outlook for the future is static, partially because there are many more old people in Japan than young people, which will also be the case in Europe in the near future.

Guest: But the Japanese don’t allow immigration.

Rob: They’re starting to, at least a little bit, but their culture is against it. The thing about Japan that’s so different from us is that although they have more debt, it is all owed to their own citizens. They have no external debt. Their people just keep saving money, giving it to the government, and hoping for the best. They remember the war and how difficult it was afterwards, so they don’t complain. Just because we have recession here in the U.S. doesn’t mean the stock market has to crash. We could have a recession where there’s no new economic activity and no new construction but because of zero interest rates, people don’t panic, and the market actually goes up!  One of the things Japan has that we do not is a wide and extensive social safety net. They have good schools and public health and transportation readily available to everyone. How long they can afford that is unknown but unsustainable debt burdens anywhere means that standards of living have to go down for the younger generations.

Guest: What is the story behind this term I keep hearing “zero interest rates”?

Rob: Zero interest rates means that you make money by borrowing.  In Europe, government bonds pay negative interest rates. If I am the government and you give me a hundred dollars and I give you back $98, I’ve just made money by borrowing from you. That’s the perfect world for big government to get bigger!

If I make money off your deposits but you don’t, why would you keep giving me your money? One reason is that you know that I’m going to give it back and not steal it.  I may give you back less, but you get to feel secure. This is why people buy German government bonds which, no matter how short or long term they last, all pay negative interest rates which is to say they pay less than nothing at all. Germany is seen as the most stable economy in Europe as they do run budget surpluses, are very stable politically, and like the Swiss government, are perceived by investors as a “safe” haven.

So, with negative interest rates, there is an incentive for governments to grow and borrow more and more money. Eventually, without the discipline of having to face bankruptcy, the government gets to decide from whom they want to take money.  Weird! If everyone is scared of losing their capital and wants to give their money to me even though I am only giving back 98 cents on the dollar, then eventually I get to decide, either through the central bank or by policies I can impose on commercial banks, which industries or companies have a valuable social contribution to make and which ones don’t.  This is one way of exerting more control over the economy.  As time goes on, this makes the economy “centrally planned.”  If the government funds “free” medical care and education, it can only do so by raising taxes, allocating credit (as described above) to preferred providers or getting involved in directly providing those services.

Guest: If I can borrow money from someone and give them back less, why would I want to restrict how much debt I take on?

Rob: Right, there is no reason to do so.

Guest: So, it’s the power to spend as much as you want on whatever you want?

Rob: Yup, but only until there is a crisis of confidence in the system which will show up as an inability for the government to sell their bonds in the public markets.

Kyle: That sounds pretty serious.

Rob: Negative interest rates are a way, essentially, for a government to fund its policy decisions without calling attention to their shortcomings and it is precisely what the Soviet Union was doing which eventually caused its demise. If a government gets to decide where to spend its money without citizen involvement, it turns entrepreneurial systems into administrative ones.  Looking back 20 years from now, we may see this as how democracies came to an end, how we unwittingly ceded power to the government in a non-political, non-violent way.

Guest: President Trump said in his opinion, higher stock market meant more jobs. Is that true?

Rob: Under his tenure so far, it has been true but that may be pure coincidence.  The official unemployment rate has gone down to a 50-year low and the stock market has also gone up to new highs. Unfortunately, he isn’t talking about the quality of the jobs. Employment is up. The stock market is up. It’s all good. What’s missing?

Crowd: Salaries. Earning capacity. Long term piling up of debt.

Rob: True enough.  The U.S. debt has tripled in a decade and continues to skyrocket.  We’re now running over a trillion-dollar deficit a year. That’s unheard of in peacetime, totally unheard of.  If you’re in the stock or real estate market, it looks good. If you want a job at twelve dollars an hour, you can find one.

Guest: That brings up another subject. We were able to buy Alaska because of the Crimea war, right? OK. So, Trump says, “I want to buy Greenland.”

Rob: It’s a great idea. I am totally behind buying Greenland because I would love to move there.

Guest: The thing is, what is our landmass worth? And what are other nation’s landmasses worth?

Rob: Our land mass is worth more than most. The U.S. is blessed with rivers and agricultural land. People go to war over land and the U.S. and China are essentially threatening each other with a trade war over who gets to control natural resources in the rest of the world and also over intellectual property. Whoever gets and keeps control of intellectual property, the internet, genome research results and all of those kind of things is probably now more important than who controls the real estate.  I’m not sure I understand your question…what’s our landmass worth?

Guest: Well, for example, what are the areas with natural resources that China is purchasing or leasing, however they are obtaining the rights. Whether it’s lithium or water, what is the value proposition and how important is it to counter their influence?

Rob: You know, people and countries can make contracts and have trade deals and then change them because the common people won’t stand for it. There’s a point at which people will not stand for the Chinese to control their resources but it’s awfully tempting!  The Chinese have a plan to build a road into Europe, literally, an eight-lane highway from China to Germany and they are giving money away to do it. They’re actually not giving it away, just lending it, and they’re promoting that trade route by offering easy financing terms.

You know, in the middle of the Great Recession, the Russians just about took control of Iceland because it was going bankrupt. Russia offered to bail them out if Iceland sold them the exclusive rights to use their seaports.  Europe came in and issued another couple of trillion dollars in debt on behalf of Iceland and the Russians went away. That’s a similar discussion as to today’s debate about the proposed Russian natural gas pipeline into Germany.  What does it take to offset the Russian promise of cheap natural gas to Europe? Well, Trump has U.S. natural gas from all the drilling in the Permian Basin that he wants to liquefy and send to Germany. That’s all part of the fight over access and control of land mass and resources.

Guest: So, Rob, do you ever see us getting out of debt?

Rob: I think it’s possible but it’s like global warming, we don’t know if we are past the point of no return. I don’t see the numbers working out, but they could.  I think the next three or four years will tell. We could get out of debt by doing some very simple things, by changing the social contract. You do away with social security for people who have over a certain amount of income. You could delay providing Social Security until people are in their early 70s. You could tax all income regardless of its source and take all deductions.  You could cut the pensions of government employees and make them equivalent to people in private enterprises.

Guest: Well, how about military spending?

Rob:  If you took the steps I just outlined, there would be no need to cut the military budget, if it was crucial to maintain it.

Kyle: It’s a question of making decisions.

Rob: It’s a question of political will.

Kyle: It’s a choice. And no one sitting in Congress now is going to make that decision.

Rob: The public is not demanding it either.

Kyle: We’re going to ask an 80-year-old politician who’s been in office for 40 years to cut services to all the people in his district. It would be crazy.

Guest: Here is a historical example of what happens when people really decide to apply themselves and their minds.  After the Franco Prussian War in 1871, the Germans imposed a war debt on the French that was calculated by the best minds in Germany to cripple the French for 30 years. Lo and behold, the French paid off their debt in three years, so it can be done!

Rob: The debt after World War I was structured so poorly by France and England as revenge was impossible. The Germans could never have paid it off, so instead, they just rearmed. That’s what crippling debt does. It makes weird things happen.

Guest: What is going on with gold as an investment?

Rob: Here is an interesting factoid:  if we reinstituted gold as the currency in the U.S., it would be priced at ten thousand dollars ($10,000) an ounce. In the 18th or 19th century, people had gold backed currencies. They had assets to back up their money so they could pay off their debts.

Kyle: Let’s move on to everyone’s favorite question: where do we invest in today’s stock market? That’s Gayle’s question to answer.

Gayle: There are 11 sectors in the market, there used to be 9, until the New York Stock Exchange moved what are called REIT’s, real estate investment trusts, into their own sector, and out of finance. That was in 2016. Last fall, the stock exchange moved some companies that were in the tech sector into a new category called communications because they felt they needed their own place, like Verizon and Facebook, used to be tech and they are now in communications. There’s consumer discretionary, things we buy when things are going well, like Home Depot and Target. There are consumer staples, like Pepsi, Wal-Mart and my favorite WD-40! Give me WD-40 and duct tape and I could fix anything. Energy. That’s pretty easy: Exxon, Chevron. Financials: Capital One, U.S. Bank. REIT’s: there’s a public storage REIT.  American Towers is a REIT that owns lots of cell phone towers. They’re involved in the 5G platforms for the new phones. Health care: Johnson and Johnson and Lily. A lot of shake up in that industry lately because of opioids. Industrials: Honeywell and Southwest Airlines, one of Rob’s favorites. Materials: like Dupont and Sherwin-Williams. Interestingly, MasterCard is a tech stock, not a financial stock. It is based on revenue and how they are structured. Then there are utilities, like PNM or Xcel Energy.

Here are three of the sectors that are considered the most favorable if we are in or going into a recession. Healthcare, because we are all getting older and we need care. Utilities, because they pay good dividends. When interest rates are low, it’s good for utilities because they leverage a lot. They borrow. And then consumer staples. We’re still going to buy toothpaste no matter how bad things get out there. You might not be at Tiffany’s anymore, which is consumer discretionary, but we’re still going to buy toothpaste. There’s lots of ways to invest in all the sectors. I do a lot of exchange traded funds that are baskets of certain stocks in certain sectors. Rob and I are having ongoing, delightful conversations about whether our portfolios are liquid enough for our clients and we’re working on that. Liquid means if you want to sell, can you sell.

The Markets (Kyle Burns)

If an investor only read the daily newspaper headlines, it would be easy to believe that the stock market declined over the third quarter of the year. For a quarter that included worries over a recession, battles between the U.S. and China over trade, inverted yield curves, and calls for impeachment, the stock market proved surprisingly resilient. The S&P 500 finished the third quarter up 1.7% and is now up over 20% for the year which is the best year to date performance in U.S. stocks since 1997. Looking at the year to date returns of the top performing sectors, the market appears to tell a story that has been common during the current extended bull market with the Technology and Real Estate sectors each returning 28.5% and 26.4% respectively. However, if an investor looks past the top performing sectors, the market tells a different story.

Beyond the technology and real estate sectors, the headlines began to impact investors as they continued to shift toward historically “safer” and more defensive areas of the market in attempts to avoid the impacts of a downturn. Year to date Utilities returned 22%, Gold is now up 17%, and Consumer Staples 20%. During the third quarter, the 10-year U.S. Government Treasury bond hit a low of 1.43% before being pushed up to 1.68% at the end of the quarter by investors seeking a safe place to put their cash. One year ago, the 10-year U.S. bond traded at 3.07% after five consecutive quarters of rising rates with many analysts projecting even higher rates on the horizon. Since that point, the 10-year U.S. bond interest rates have declined by over 45% with moves by the Federal Reserve to force interest rates lower.

Global markets, excluding the U.S., returned 14.1% through the end of Q3, 2019. The success of the international markets comes as a surprise with international economies generally considered weaker with their governments seeking out ways to stimulate economic growth. Many of the developed international governments are now selling bonds with negative interest rates to stimulate growth including Japan (-.19%), Germany (-.59%), and France (-.29%) all issuing 10-year bonds with negative yields. While each of these countries is trying to stimulate economic growth, their stock markets performed well through Q3, 2019, with France (16.9%), Germany (10.7%), and Japan (11.5%) all having positive returns. Emerging markets lagged the broader developed markets – returning 6.2% through the first three quarters of the year.

For commodities, Crude oil leads the pack in 2019, moving up 23% partly due to a drone attack on a Saudi Aramco processing facility in September that moved crude prices up 15% in a single day. Natural gas has declined 18% this year and remains near a three-year low. Other metals followed gold’s lead with platinum and silver up 17% and 13.7% respectively.

With the decline in interest rates, holders of longer duration bonds have been rewarded. The Aggregate U.S. Bond Index, with an average maturity of 8 years, returned 8.5% in 2018. Similarly, international bonds returned 8.5% and emerging market bonds 9%. We continue to believe that the best place to be in the bond market is relatively short and that holders of shorter duration bonds, within 5 years, will be rewarded with flexibility in their cash flows.

Financial Literacy (Keren James)

Over the past two years, the Rikoon Group has been providing free financial wellness seminars to local organizations looking to better support their employees beyond the workday. The seminars have been a great opportunity to give back to the community by helping people improve their understanding of their personal finances and alleviate some financial concerns. The seminar topics have covered many different areas of personal finance including budgeting, debt elimination, cash management, and the importance of retirement planning.

Recently we presented a financial wellness seminar to the Santa Fe Opera Apprentices, many of whom are early in their careers and learning to manage their finances as young artists. We also had the opportunity to sit down with a group of Meow Wolf employees to discuss their transition from struggling, self-employed artists to full-time employees with a rapidly growing organization that is garnering worldwide recognition. The two financial pictures are quite different, and it was a pleasure to witness and speak to the groups on the new possibilities in retirement planning and investing that are coming available to them.

We are currently preparing seminars for other local businesses and look forward to the opportunity to help participants understand the basics of financial planning and the market so that they can make more knowledgeable investment and financial decisions. Please let us know if you have a local organization in mind that you think could benefit from a seminar.

Staff Updates

Rob Rikoon: It was a pleasure to stay in Santa Fe for the entire month of September – an unusual feat for me of not traveling.  The month was taken up with creating some recreational facilities in the back of the office: an archery range, horseshoe pits, and the most arduous, a 60’ x 13’ regulation bocce ball court. We completed the projects just in time to host a barbecue for the Santa Fe Playhouse, where my daughter Robyn takes up the position of Artistic Director for the upcoming season. Hannah enters her fourth year of naturopathic medical school, and we are all looking after a litter of ten (10) puppies from our resident office dog, Beya.

Kyle Burns: In August, my wife Tabitha started her new job as a nurse practitioner at the Pojoaque Primary Care clinic.  It has been a great start for her, and she is enjoying the diverse patient population that she gets to serve in the Pojoaque area. The boys are in full swing with school, 4th grade, and their soccer season is underway. I am in my 15th year of playing flag football through the city of Santa Fe. Each year, I get a little slower as the other players get younger and faster, but it is still great to be out there competing. I purchased a Gold Pass for Ski Santa Fe this year and am really hoping for another good snow year. My pass comes with a discount for a friend each time I go skiing. I welcome anyone who would like to join me for a run or two to meet up and am happy to share the discount.

Contessa Archuleta: I was fortunate this year to participate in the Leadership Santa Fe program.  Over the course of eight months, I attended monthly workshops that focused on building leadership skills and learning about civic issues facing Santa Fe.  I hope to incorporate the new skills I learned during the program into our daily operations at the Rikoon Group.  On the family front, the kids have settled into school and extracurricular activities are running smoothly.  For the second year, Ayden is playing viola with the Santa Fe Youth Symphony and enjoying it.  Last month, Samuel started piano lessons, although he seemed more interested in playing the drums, something for which we are definitely not prepared.  I am looking forward to the changing of seasons as the fall is my favorite time of year in New Mexico.

Keren James: Fall is also my favorite season and I welcome the cooler temperatures, changing colors of the trees, and warm autumnal sunsets. It is a time of great transition in my life as well. I passed the registered investment advisor representative Series 65 exam in August and am excited about what this means for my role here at The Rikoon Group. In my personal life, my son and I moved across town and we are looking forward to welcoming my parents for a visit over the week of Thanksgiving.

Anthony Penner:  In August, our daughter Amaya officially began pre-kindergarten at Santo Nino Catholic School. At first it was a slow transition for her but she has since been thriving and making plenty of friends. The best part of coming home now is hearing about her day and what she has learned while having her teach us some new things in Spanish and Sign Language. Amaya has also started back up with Ballet lessons on the weekend which she continues to enjoy. In between everything we have going on, this Fall we hope to hike up to the mountains to see the change in foliage, attend Balloon Fiesta, drive out to McCall’s Pumpkin Patch, and prepare for the upcoming Holiday Season. Happy Fall everyone!

Elizabeth Hook: Elizabeth joined the Rikoon Group in 2019. After graduating with a degree in Business Administration, she answered a call to the great outdoors and began her career managing two hotels in Denali National Park, Alaska. Before moving to the financial sector, Elizabeth served for eleven years as Gallery Director of the Gerald Peters Gallery and Gerald Peters Projects, as well as the Executive Director of the Peters Family Art Foundation. Elizabeth enjoys spending free time with her husband and two young children, traveling, and enjoying nature as often as possible.

Jeff Sand: I got to perform in three very different music events this summer. The first was when I sang with my jazz quartet at an outdoor event. We were fortunate that the weather was just perfect that day. Second, I participated in a Woodstock 50th Anniversary Tribute. I played guitar and sang with two other musician friends and we were asked to play the music of Crosby, Stills and Nash. Then third, another friend and I were asked to be one of the opening music acts for this year’s Zozobra event in Santa Fe. Zozobra, also known as “Old Man Gloom”, is a huge marionette structure (about 50 feet high) that is burned to dispel all our worries and troubles. The burning of Zozobra dates back to the 1920’s when several Santa Fe artists came up with the wacky idea that they needed a ritual to burn off their gloom to cleanse them from all of their misdeeds of the year so they could start over fresh again. Zozobra is a great big, crazy deal in Santa Fe. The number of people that attended Zozobra this year was estimated to be 64,000!!! For reference, the population of the City of Santa Fe is around 80,000.

Gayle Johnson:  My granddaughters spent 3 days with me in August; we hiked Bandelier, toured Ranchos de Los Golondrinas, and every toy and children’s book in my home was in the living room. It was fantastic! Oh, I had a lovely time with their parents, too. In November, I am off on a real vacation, which will be spent in Denmark and Iceland. Why such destinations in November? A wise person told me there is no bad weather; only poor choices in clothing. Autumn is my beloved season; the colors, the smells, cozy sweaters, and the comfort food. You may not be too comfortable with the market volatility in 2019, and fear a recession. Just remember, our team is here for you. Lastly, to share a quote from the Barron’s “the only thing we have to fear, is fear of a recession itself.”  I look forward to seeing you at our next tea.

Upcoming Teas

Please join us for our quarterly gathering at 2218 Old Arroyo Chamiso in Santa Fe to discuss economic and market related events on Thursday, December 5th, from 2:30 p.m. to 4:00 p.m. (MT).