Greensboro’s $100M downtown performing arts center, which is to open in a few weeks, has sold naming rights at $7.5M for ten years, to Steven Tanger, scion of Tanger Outlets, a commercial real estate investment trust. While coming up with $100K per month for the next ten years may be small potatoes for Tanger, its stock value has nearly halved over the last five years, as a result of the retail apocalypse.

Never mind the irony of profits from a company which guts downtown retail going to gentrify downtown Greensboro. A rare confession by a respected economist indicates companies like Tanger may be part of the reason the Federal Reserve has created hundreds of billions since September to prop up the money market funds.

REITs operated at leverage of around 9x through 2012 but incurred damage to capital after an interest rate jump from the “Bernanke shock” caused a fall in asset holdings in 2013. Providers of repo funding became cautious about extending credit to these REITs, which subsequently operated at a leverage of around 7x for some time.           

From 2H 2018, however, these REITs rapidly hiked leverage (Figure 17), and we think they and other types of leveraged funds absorbed a large amount of dollar funding in money markets, reflecting surging repo rates on 17 Sep 2019.

Therefore, it appears the IGMFUPAC is to be named for the next ten years for a company which is contributing greatly, not only to the collapse of downtown and what remains of confidence in Greensboro leaders, but also to the coming global economic collapse.