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May 27, 2021

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Hi Everyone,

One thing I noticed about Dubai is that they have a lot of floor space.

The largest building in the world, Burj Khalifa, stands more than 828 meters high, like a needle piercing the sky, but there are so many other buildings and a lot more under construction.

Even before COVID-19, it was difficult to imagine these buildings, mainly hotels, operating at full capacity. Now, with the global pandemic, it's even harder.

It does help that Dubai is built in the middle of the dessert, and that it has the largest foreign-born population on Earth.

Even still, the city just seems to enjoy having more spatial capacity than they can possibly use.

The thing is, as one investor pointed out to me yesterday, when you have money, you invest it.

Real estate is almost always considered a good place to park money, but around here, there doesn't seem to be much regard for how and when that real estate may be used.

The global financial system has far too much money. That's pretty clear.

At this point, banks are having trouble lending it out because those with credit already have far more than they need.

So it seems that many would rather have unused or underperforming buildings than cash in the bank. So the cycle continues.

Tapering?

Randy Quarles, a Federal Reserve governor and chair of the Financial Stability Board, recently became the latest Fed official to talk about gradually reducing the amount of stimulus that the central bank is pumping into the economy.

The market seems to be taking this in stride, with stocks and bonds pretty much flat today.

It's a bit surprising to see, since many were expecting heavy volatility to accompany any kind of indication from the Fed that they might be taking away the punch bowl.

The thing is that the punch bowl is overflowing at the moment, so reducing the amount of punch that they're pouring in is not a particularly daunting thought for most capital allocators.

The bowl will remain full for quite some time, and should it ever begin to deplete, they'll pour more in anyway.

Have a wonderful day!!

Mati Greenspan

Analysis, Advisory, Money Management