Gene Goldman is Chief Investment Officer & Director of Research for Cetera Investment Management. He is responsible for the strategic direction and continued growth of the firm’s research offerings. Gene has more than 28 years of experience in the development of investment strategies, money manager research and overseeing investment analysts. He is frequently cited in a range of national media outlets including The Wall Street Journal, Bloomberg News, The New York Times, Forbes, and Reuters and he is a regular guest on high-profile news networks including CNBC and Fox Business News.

Mr. Goldman earned his Bachelor of Science in engineering from Worcester Polytechnic Institute and his Master of Business Administration with a concentration in finance from Northeastern University. He is a Chartered Financial Analyst® (CFA).

Gene presented a firehose of great information. We were lucky to get notes from two members: Michelle Lee and Hal Beals.

Key Points Summary by Michelle Lee

The 2020 recession is the shortest recession after the longest economic expansion on record and it is a service led recession.

We are currently facing quadruple peaks.

1. Peak Economic Growth: GDP growth was 6.7% in Q2 while it was 2.0% for Q3.  Although the growth has slowed down, possibility of recession is <1%.  The causes for the lower growth is manifold:

1. Thermal coal prices in China has skyrocketed causing rolling blackout, thus manufacturing is contracting and limiting products export.  US retailers do not have enough products to replenish their shelves and hence lower sales. 
2. There is less positive data surprise in the US stock markets to propel higher stock prices.
3. Inflation caused by tight labor market and high oil prices.  Oil suppliers are not responding to the pricing signal to make capital investment to increase supply.  They are taking a wait and see approach in view of the clean energy policies.
4. Peak Stimulus

The accommodating monetary policy will be changed.  The Fed will reduce the monthly purchase of treasury and mortgage backed securities from banks gradually (QE tapering).  Gene thinks that QE will end April – June 2022.  He also predicts that the Fed will raise rate twice in 2022.

• Peak Earnings

FactSet forecast that S&P 500 year-to-year earnings growth will drop from 92.4% in Q221 to 3.6% in Q222.  Corporate earnings growth is impacted by supply chain issue and higher labor costs.  For example, P&G has revised its forecast for 2022 supply chain cost from $500m to $1.2b.

• Peak Disruption

With vaccination, labor shortage has eased.  Some of the early retirees start to come back.  Increased of immigration will also help.

The stock market valuation is high, forward 12-month forward P/E at 21.63x comparing to historical average of 16.27x.  We may see correction (<10% down) but not bear market (>20% down) in view of massive stimulus, more reopenings, unprecedented surge in consumer net worth, supply chain problems ease and business cycle dynamics.

Key Points Summary by Hal Beals:

Gene Goldman of Cetera Investment Management’s intention was to calm nervous club members and guests concerned with the current disturbances of the US financial markets. 

He opened with a graph showing the number of months of each economic expansion and recession since the end of WWll. The current expansion has lasted 128 months, the longest in history and the Covid 19 recession of 2020 was the shortest at 2 months.

Today’s disturbances are a reflection of these factors: Economic Growth, Inflation, the Federal Reserve and Washington Disfunction. Other factors are wage increases, labor shortages and supply chain bottlenecks  His remaining remarks delved into each.

Economic Growth is slowing. China’s actions on coal purchases, desire to clean their air for the Olympics and falling house prices along with US wage increases, supply chain problems and the fear of interest rate increases is reducing estimates of GDP growth.

Inflation is increasing.  Pent up purchasing funded by the  Covid income stimulus by the government in 2020-21, combined with supply chain problems with more money chasing fewer goods is the cause. It is temporary.

The Federal Reserve functions to control inflation and increase employment. Inflation control is the Fed’s power to increase interest rates that raises the cost of borrowing, home loan and credit card interest.  Students of the Fed think that there is a 98% chance that the Fed will raise rates slowly beginning in 2022.

Washington Disfunction was on the front pages, TV news, and social media for the past 2 months with Senators Sinema and Manchin as the poster children for delay and really big delay in the US Senate to move important bi-partisan infrastructure legislation through.  The two compromised recently and indicated that they are able to compromise for the good of the nation.

As is typical with Wall Street professionals, the longer term message is upbeat because, as in the past, recessions lead to expansions which lead to irrational exuberance which produces another recession.  Live long enough, stay invested, be patient and avoid speculation and all will be well. It is simple, but this Scribe can attest to its wisdom.

The University Sunrise Rotary Club has a tradition of hearing from the Club’s veterans on Veterans’ Day. This year we heard about the service experiences of our members Dave Arndt, Steve Barton, Hal Elner. Ron Espiritu, Lee Raaen, Joe Thomas, Paul Weibel, and others about their experiences serving us and our nation.

Thanks guys!! And welcome home!!

Honoring Members Who Served Our Country

Notes by Joe Diehl

At the Veteran’s Day meeting of the University Sunrise Rotary, member Lee Raaen presented ten of our club’s veterans and had each of them make a short presentation as to their service in our nation’s armed forces.  Lee also collected several historic pictures of these men that were then shared via Powerpoint slides with the membership.

1. David Arndt was a dentist and during his military career, provided dental services to troops as well as to citizens in countries where he was stationed.
2. Paul Weibel became a Morse Code expert and worked in the Army’s security services detail.  Later he joined and served in the reserves for 7 years.
3. Hal Ellner or “Corporal Ellner” wanted to go into aviation but unfortunately he was color blind.  He had an interesting detail and worked in Japan under General Douglas MacArthur.
4. Steve Barton served in Korea for over a year, and traveled there by boat – most others flew in by air. 
5. Ron Espiritu spent 4 years in an ROTC program and became a 2^nd Lieutenant.  He began his service at Oakland Air Force Base and was stationed at Camp Alpha in Vietnam.
6. Ben Porter dove into a legal career as a 2^nd Lieutenant in the JAG corps, stationed at the Presidio in San Francisco and later handled appeals from court martial convictions in DC.
7. Joseph Thomas had a journalism degree from Bradley University and was in the first draft “lottery” – enrolling in officer candidate school and assigned to service at Fort Benning.  His skydiving experience landed him in the airborne tank school and ended up using his journalism skills in his career.
8. Lee Raaen was deployed to Vietnam where he was assigned to a weapons platoon, and became a fire direction expert – aiming mortars in order to target the enemy.  He became a radioman and volunteered to work at an orphanage – which ultimately was overrun by the North Vietnamese.
9. Stephen Gerritson joined the Air Force in 1968 where he was immersed in learning Chinese fluently; he then was assigned to fly with military pilots near the Chinese border to intercept radio communications from the Chinese military and translate them to HQ.
10. Jim Miller served in the Army and then joined the Army reserve, only to be deployed to the Middle East during Desert Storm in 1991.  His entire military career spanned 20 years.

A guest to the Rotary Club meeting was Colonel Sean McCaffrey, son of General Barry McCaffrey who talked briefly about his 26 years of military service.  He retired in 2012 and still does contracting work for the Pentagon.

Rotary Club President Pam Mushen thanked each and every one of these individual for their courageous service and for sharing their stories.

The University Sunrise Rotary club food drive at the QFC in the University Village was a huge success last Saturday, October 30th.

We were blessed with a beautiful sunny day without a cloud in the sky, shining on our seventeen volunteers, fourteen of whom are current Rotary members. Over a five-hour window, covering both entrances of the grocery store, we were able to raise 1,106 pounds of food and $661 in cash donations. Donations benefit the University District Food Bank, and they expressed much appreciation to our Rotary club.

Managers Matt and Jim of the QFC expressed gratitude for our service, as we have now run four food drives at their location over the course of the last 13 months. We hope to organize another event in early 2022.

Program Summary Notes by Paul Weibel:

Nicole Thomas-Kennedy moved to Seattle twenty-five years ago and spent years serving and bartending downtown Seattle. She found both community and a love of school at Seattle Central Community College. She went on to receive a bachelors in Anthropology from UW, and a law degree from Seattle University. Nicole spent four years in public defense before opening her own firm, focused on low or pro bono criminal and eviction defense. She met her partner 15 years ago and they have one amazing child.

Nicole has been the attorney of record on over 200 civil cases, and 400 criminal cases. She has never lost a trial, which she attributes to the absurdity of the types of cases prosecutors filed as much as her own legal prowess. She saw first-hand how the destabilizing effects of overly aggressive prosecutions reverberated through their lives, their families, and their communities. She saw poor people not just arrested but prosecuted for stealing socks in the winter or food when they were hungry. Over and over again, the current City Attorney’s Office pursues prosecutions that are ineffective, damaging, and costly — both inflicting hardship on our most oppressed communities and wasting millions of dollars that could be spent on community-led, evidence-based programming.

Nicole believes that her plan will make us safer. Her experiences as a youth led her to the conclusion that compassion and advocacy puts people on the right path. The old way expands prisons.  The Jump Start Tax and Fair Chance Housing help. She will prosecute where it makes us safer.

Tweets – done in 2020.  She was in the streets, saw the injuries and violence and visited the jails.  She had to buy her daughter a gas mask.  This was all very upsetting to her and at the time Nicole was just another unknown citizen.  As city attorney she would not do those tweets.  The mailings opposing her are by people opposing the Jump Start tax.  She is still outraged by what happened.  There was no conciliatory attitude by the police.  The city attorney’s office should be separate from the police.  We don’t need a deferential attitude.

Drugs/Meth – incarnation does not work for addiction and the War on Drugs doesn’t work. Addiction needs to be treated as a health problem. The city attorney’s office can help mitigate harm to the community.  We need an expansion of treatment facilities.  It is very hard to get into these facilities.  Treatment needs to be made available when the addict is ready for treatment.  Forced treatment doesn’t work.  A Housing First model is needed – addicts can’t get clean on the streets.

3^rd and Pine – Nicole used to work at the Market and lived at 6^th & Pine.  In addition to the above, we need Community Mental Health.  It is impossible to get into treatment before crisis. Supportive housing and case management are less expensive and more effective.  Shoplifting is mostly by people steeling to survive.  That does not mean that if you are poor that’s okay to steal but prosecution is expensive and it is not effective.  Some shoplifting is a felony and not under the city attorney.

Prosecutors have discretion on what they charge.  There are very few crimes that Nicole would not charge.  She will not prosecute for drug possession of prostitution.  Not prosecuting does not mean doing nothing but we are prosecuting the poorest people.  90% of the defendants qualify for public defense.  CHOOSE 180 eliminates recidivism and is less expensive.

The police have discretion.  50 percent of their time is spent on non-criminal matters.  So, take stuff off their plate.  We don’t need a police response for everything.  The problem is partly to do with their contract.  There is no accountability.  Minorities are who end up in court.  There is no benefit in prosecuting for prosecutions sake.  Jail doesn’t work.

Civil actions – city attorney directs city litigation.  They defend all city laws and can settle all litigation.  People who create large scale problems are who she will go after. She is largely satisfied with the civil actions at the city attorney’s office.  The city attorney has a lot of power over legislation.  Her office will cooperate with other jurisdictions – particularly on affordable housing.

Housing – supports the Jump Start Tax.  The middle class currently carries most of the load. Tenant protection is important.  The current council is committed to solving the problem. The city attorney increases homelessness when it prosecutes.  People lose jobs and housing when they are in jail.

Homelessness – resourcing people who are vulnerable. Work with city council to craft legislation. Landlord abuse is by the big corporate landlords – not the mom & pop landlords. What happens to the homeless affects us all.

Victim compensation fund – would give victims instant repair.  Run by Human Services Department.  Now victims have nothing.  Prosecution does not result in restitution.  Funding would come out of the city attorney’s budget.  It would be a small part of the budget.  $77 million was spent last year on prosecuting misdemeanors.

Law enforcement needs more accountability.  City attorney’s office needs more transparency.  Police need to spend less time on non-criminal matters.

Ann Davison came to Seattle in 1996 to work for the Seattle SuperSonics front office in basketball operations. She is now an attorney and mother of two elementary-aged kids who were born in Seattle.

Ann holds a JD from Willamette and a BA in Sociology from Baylor. She was a Court Certified Law Clerk at the Marion County District Attorney’s Office in Salem, OR, where she managed assigned criminal cases by conducting bench trials, analyzing crime, and negotiating plea deals. Ann established her own practice out of law school, becoming one of Seattle’s many small business owners. After building a book of business, she took it to a small downtown law firm where her practice areas included civil litigation, immigration, sports, contracts and business transactions. She has practiced in Seattle since 2005, at times navigating the balance of becoming a mother, and does so now at Functional Legal Solutions, focusing on sports, business, employment, contracts, intellectual property, and other general civil areas. Ann has also been an arbitrator for numerous cases over her 16 year legal career.

Ann currently serves on the executive board for the Seattle Youth Soccer Association as the VP of Recreational Development and is also on the Board for a nonprofit that assists clients who have mental illness re-enter community. Previously Ann served as co-chair of a volunteer committee for a public elementary school fundraiser that raised over $200,000. She has also served as a co-operative preschool Board member and was a volunteer tutor through CAYA (Central Area Youth Association), helping refugee and immigrant students. Ann lives in north Seattle with her family where she coaches kids’ soccer teams. She has spent time volunteering with people recently released from incarceration, with people experiencing homelessness, and led an event known as Hunger Awareness Week. Ann has spent time working in Australia helping at-risk youth, immigrants and refugees. Ann also helped the UN Border Relief Operation to do a survey in a Cambodian refugee camp along the Thai/Cambodian border in Thailand.

Ann is also a teacher. She taught conversational English to Thai college students at Yonok College in Lampang, Thailand. Currently, she teaches International Business Law in the Global Business Program to international students at the University of Washington Continuum College.

Prior to becoming an attorney, Ann worked as a caseworker in the U.S. House of Representatives in Washington, D. C., assisting constituents in matters regarding their military service, medicare, medicaid and social security. Also in D.C., she started her career in sports at a pro sports representational agency before her time in the front office for the Seattle SuperSonics from 1996 to 2001.

Ann was a political newcomer when she ran for Seattle City Council in 2019, driven by conversations for years with her young kids about the obvious plight of people alongside the roadways of Seattle, with elected people doing nothing meaningful about it and allowing for the suffering of people and the degradation of the environment.  Ann garnered 40% of the vote in the general election of 2019, after securing the endorsement of the Seattle Times over the incumbent.  Ann continued her efforts to see change within Seattle and Washington state, seeing a need for political balance that stemmed from Seattle and ran for Lieutenant Governor for Washington state from her convictions about the same issues that spurred her initial political involvement in 2019.

UNIVERSITY SUNRISE ROTARY

10/21/21

MEETING MINUTES

Our Speaker this morning was Ann Davison, running for office of Seattle City Attorney (SCA).

Worked for the Sonics (but I don’t think as an attorney)

Graduated with Juris Doctor

Started Functional Legal Solutions PLLC, consulting supporting business.

Participated in youth soccer, currently a soccer coach.

Participated in Hunger Awareness Week

Taught English in Thailand

Previously campaigned for the office of Lt. Governor and Seattle City Council

Understands the  office of SCA is to provide legal advice to city government officials and to represent city functionaries, empowering them to make decisions in support of city policies.

Ann Davison then fielded QUESTIONS:

1. Lee Raaen: Should the SCA represent the city agencies or the interests of its citizens?

A:    Ms. Davison stated, the SCA makes the determination of “What’s best for the City”.  The SCA helps set policy / guidelines.

• Tom Ranken: What is your thought on the pursuit of minor crimes?

A:    Laws are a reflection of City values.  Intervention / supervision in the forefront of public safety.  “Crime  Matters”.

• Bob Wiley):  What is your position on shoplifting?

A:    Ms. Davidson stated that offenders need to be prosecuted as shoplifting puts workers at risk.  There are usually other crimes involved during the execution of a shoplifting action. Proponent of a SCA retail theft focus.

• Paul Weibel:  What will be your focus on entering the Job?

A:    Understanding the needs of all the departments.  Engender collaboration across all City departments.  Police reform needed – opposition to dismantling the Police Department – raising civility and respect.

• Isaac McNalley:  What can we do to help the campaign?

A:    Contribute time and money.

• Mike Madden:  What do you see as the role of SCA to a multi-approach solution to crime?

A:    Obligation to the recidivism of offenders.  Interdiction of repeat offenders VS re-entry into society.  “We own the process of recidivism”.  Espousing programs to measure outcomes.

• John Pierce:  Have you any support from Seattle law firms?

A:    30 past City judges endorse the campaign.

• Jim Horrigan :  What is your position on “safe injection sites”?

A:    SCA should provide the legal framework to carry out City policy.  Ms. Davison stated that her personal opinions are not relevant.

• Jim MIller:  What is your position on gun violence?

A:    Ms. Davison stated “Intervention and prosecution”.

On Saturday, October 9^th, 2021, 15 associates of the University Sunrise Rotary Club (12 members and 3 friends/partners) descended on Foundations NW to assist with building Tiny Homes. This was the second volunteer outing to Sound Foundations NW by the club. The volunteers (young and old, skilled and unskilled) were all willing, eager, and able participants in the event that ran from 9 AM to 3 PM that day.

The volunteers participated in various phases of construction: component assembly (floor and walls), finishing (door/window installation, insulation, interior walls, and interior/exterior caulking), and interior/exterior painting. At the end of the day the group was able to “raise the barn” by attaching two walls to a floor assembly.

The group was particularly impressed by the processes in place at Sound Foundations NW, and how they are able to leverage wide ranges of skills to assist in the process. One example is that, by the end of the day, most all the volunteers were comfortable wielding the impressive cordless nail gun. The jig system set up to assemble components was quite efficient and fool-proof.

This is now a District 5030, but under Mike Bronsdon’s leadership, the University Sunrise Club was the first to volunteer.

At the end of the day, the group shared a universal feeling of accomplishment and contribution to the mission. All in all, a testament to the mission of Rotary!