The third quarter of 2022 has been generally unpleasant for investors and the Fed alike. The plan to allow the economy to “run hot” while the transitory nature of inflation played out caused inflation expectations to become “baked” into economic decision-making. To combat inflation, the Fed continued its aggressive policy path of moving away from an accommodative stance to becoming restrictive. By some measures, the combination of Fed Funds rate hikes and Quantitative Tightening is the most rapid tightening cycle ever (on a percentage basis).
The market’s reaction to higher Fed Funds rates was a bit perplexing, since central banks tend to raise rates for the purpose of slowing the economy down. It may be as straightforward as the market thought the Fed was raising short rates, so all rates trended higher to continue to draw in investors, although the curve overall flattened and inverted in places. It could have been that the market thought the Fed did not have the tools needed to manage inflation over time and that there was a risk of “runaway” inflation (a low probably scenario in our opinion). Or it may be the case that at some level people knew there was an unusual risk that the Fed would be working at cross purposes with both the legislative and executive branches of government. Although not often explicitly stated, we think the “cross purposes” scenario has the most credibility. Lastly, the other reason the long end of the curve has not placed much weight on the Fed’s likelihood of success in driving down inflation expectations is the much fantasized about “pivot” scenario, where at the first sign of pain the Fed ceases tightening efforts and pauses or eases.
This Fed is clearly channeling the ghost of inflation past with frequent references to the policy mistakes of the 1970s, when the Fed ceased tightening too soon and inflation returned, causing the Fed to drive the economy in to a severe recession to break the back of inflation. As the Fed turns the screws on the economy and reduces market liquidity, they will likely have to step into the market to temporarily sooth disorderly corners, but to keep the messaging clear we think that will be achieved through very targeted actions (such as the liquidity facility that was needed to support the short-term funding markets in the recent past). When markets hit extreme states, things break. The Bank of England had to step in to save U.K. pensions from margin calls and mark-to-market effects caused by the dramatic increase in bond yields. We expect other central banks will need to follow with either preemptive or reactive action to keep markets functional.
"...the market is becoming increasingly pessimistic about the prospects for future earnings of companies of all types."
Over the 3rd quarter, bond yields rose dramatically, causing the worst returns in 40 years. Stock prices fell as well. Some market participants say that due to higher yields on Treasuries, stock prices took a valuation hit because the “risk-free” rate used to discount the future cashflows was greater. More likely, the market is becoming increasingly pessimistic about the prospects for future earnings of companies of all types. As it relates to both stocks and bonds, a “risk off” mindset has permeated the market, generating losses on both side of the performance ledger. Taxable bond indexes have had losses on a year-to-date basis of between 11% and 16%. In muniland, the outflows resumed, and losses mounted again. Municipal indexes experienced losses for the year of between 8% and 16%. Some longer-term municipal indexes have seen losses approaching 20% in 2022 and long taxable indexes are seeing losses approaching 30%. The shock of higher bond yields and borrowing costs is having a near immediate impact on the housing market, while the effect of higher rates may take time to be felt on Main Street, Wall Street, and at a point, it may cramp the style of the Federal government. Clearly, many bond investors are feeling the pain of a rapid Fed tightening cycle. It is important to identify that the Fed had to hike rates by 225 basis points to move from an accommodative stance to just now being restrictive. Through the Fed’s dot plot, they are suggesting they will have to raise rates by more than 100 basis points between this year and next year. The next 100 basis points won’t be fun, but it sure should be less painful for bondholders as compared to the past few quarters.
Observations and Outlook – The Fed Begins the Apology Tour
The Fed has begun their apology messaging, saying that by tightening the economy, there would be pain for displaced workers and challenges that come up with subduing economic activity. The Fed knows that to wring inflation expectations out of the economy, “below trend” growth is needed for a “sustained period of time” as said by Fed Chairman Powell. We interpret that to mean GDP growth of between 0% and 2%. Job losses are nearly a certainty to achieve below trend growth. The simple truth is that people need to feel “bad” and worried to strip inflation out of expectations. To this point the reduction in jobs available per “seeker” has dwindled from two jobs per “seeker” to 1.7 jobs per seeker, mostly through employers reducing the number of posted positions. Layoffs have started, but the pain in the job market has been minimal. To manage wage inflation and “right” the imbalance in labor markets, it would seem the Fed needs for some degree of job losses and fear of job loss to return to the labor environment to tamp-down the contribution to overall inflation that is born out of labor costs.
Although there are still mixed data points in the job market, August saw the number of available positions fall by more than a million jobs as compared to July. The 10.1 million positions were the lowest number since June of 2021. The tide may be shifting as it relates to worker confidence about the balance of power between workers and employers. As mentioned last quarter, most employers expect they would have to layoff people in an economic downturn. In a recent poll conducted by Harris Poll for Bloomberg, 58% of employees feel that companies have more leverage in the job market and 62% said current economic fluctuations are a reason they plan to stay at their current job. Our thinking is that employers have been “trading up” as they can acquire talent and upon a slowing of demand, they will shed poor performers. Keep in mind, many employers in the service industry have become used to operating with a skeleton staff during the Covid years, and customer expectations may have been shaped by diminished choice and service since March of 2020. The probability of massive layoffs experienced in past recessions, is not our outlook since few employers are operating with bloated staffing levels. Left to function in a natural state, in a mild recession and based on the current job market characteristics, wages should stagnate, rather than fall dramatically.
"The riskier it becomes to hire people over systems and substitutions, the fewer people will find themselves with job choices."
There have been a few job protectionism efforts that would encourage automation and relocation of some opportunities. California recently established a council that could set a $22/hour minimum wage for fast food workers in 2023. You can expect that your drive thru order will be given to a computer or a worker in a call center and the dining room will be closed. In response to losing call center jobs to Mexico, the Caribbean, the Philippines and elsewhere, California is considering a bill that requires employers to post a workplace alert 60-days prior to relocating 30% or more of their workforce. Companies that don’t post the notice may receive a fine and companies who move out of the state would have a 5-year ban on loans, grants, or tax credits. As is often the case, the politicians may be fighting the wrong fight. The issue may not be between the cost and quality of talent in California as compared to Mexico, the real competition is probably between the cost of a human solution and an artificial intelligence substitution to the call center function. The riskier it becomes to hire people over systems and substitutions, the fewer people will find themselves with job choices.
We believe that the Fed is correct to start the apology tour. It serves the double duty of possibly bringing down economic expectations for both Wall Street and Main Street, while in a compassionate way, it may cause those who are overextended the most to get their house in order, so the pain of a recession is unpleasant, but not tragic. The Fed has indicated that they don’t plan to make the mistakes of the past, by taking their foot off the economic brake pedal too soon (as was the case in the 1970’s inflation episode). Too much of the messaging by the Fed has indicated that they expect pain, some job losses, and that rates need to go higher than current levels and stay there for longer than the market expects. In our opinion, the Fed will raise rates to a point that either inflation is beaten out of market expectations, or some systemically important aspect of the global economy breaks.
The sign that inflation is wrung out of expectations will probably be shown in the form of TIPs breakevens, the Fed 5-Year Forward Breakeven Inflation Rate, CPI, PPI, PCE, and tighter job market metrics. It may be easy to spot whether inflation expectations are acceptable, but the durability of the expectations is something that seems unknowable because consumer sentiment is volatile. We expect that before we get to that point, something important breaks.
"The housing market is poised for stagnation or decline since the affordability has plummeted."
We will name some developments that could come out of the shadows and break rapidly. Capital market access to companies may freeze. Current liquidity measures (as evidenced by the MOVE Index – a measure of Treasury market volatility) are back down to where they were at the start of the pandemic. “Junk” bond issuers, who couldn’t afford their interest costs 400 basis points ago (“zombie” companies) may become officially deceased or absorbed into stronger entities. Debt risk spreads (the yield you gain from going from a Treasury security to a corporate bond exposure) could be at risk of a dramatic widening. As a result, corporations would have to pay much more to borrow money. Deficit spending-addicted governments may find that the “bond vigilantes,” on which they are increasingly dependent for funding their deficit party, have a more unfriendly benefactor than was the case when the world’s spending was funded by central bank Quantitative Easing programs. In the U.S., every 100-basis point increase in borrowing costs, results in approximately an additional $300 billion needed to service the debt, annually. That is a lot of future productivity or intelligent social spending that may not happen. Perhaps higher borrowing costs, combined with central bank Quantitative Tightening, will put Modern Monetary Theory, monetary financing, and fiscal dominance in the grave alongside the zombie companies. UK pensions “broke” recently when a jump in long-term yields rose and the pound fell, causing pension managers that use derivative securities to address margin calls on their positions, which caused them to sell securities to meet the calls, in a self-imploding cycle. The Bank of England had to step in multiple times to support the market by buying long government securities to stop the cycle. The housing market is poised for stagnation or decline since the affordability has plummeted. Mortgage rates have hit a 14-year high. In 2021 you could get a 30-year mortgage for 3%, now that number is roughly 7%, so a $2,500 monthly house payment that bought a $758,000 house in 2021 currently gets you a $476,000 home. The cost of an average home has increased by roughly $1,000, or 15% of median household income. We have a hunch that the housing market and related economic activity is in a fragile state. Corporate profits may be seeing some cracks. Higher labor costs, inflation in input costs, an extremely strong dollar, tighter monetary and fiscal policy, and the impact it may have on consumer demand seems poised to put a damper on analyst profit forecasts and stock share prices. Earnings season starts mid-October so corporate projections should provide some clarity. Finally, the consumer overall may be broken. Cost increases are hitting them from all sides and wages are not keeping up. Credit card balances are near record levels, the interest cost on that credit has increased, saving rates are down, consumer sentiment measures are generally depressed, and if the Fed has its way, they have an increased risk of losing their income. Utility bills globally may grab headlines this year as heating costs may be dramatically higher. According to the National Energy Assistance Directors Association, roughly 20 million households (or one out of six) are late on their utility bills. Admittedly by some measures consumer balance sheets are said to be strong, as average outstanding credit card balances are growing by $33.1 billion a month over the past six months as compared to the monthly average of $15.4 billion for all of 2019. Consumers are using a lot more debt and the debt is more expensive to carry. Perhaps households are just mimicking governments around the world. Although the Fed’s goals seem focused on applying pressure to consumers, there are several areas that appear to be poised to crack. What happens if several of them break at the same time? We think there is a risk that a linear decline becomes an exponential deterioration as a culmination of challenges could present the central banks with a disturbing bout of “whack-a-mole” requiring very targeted and possibly obscure policy solutions, to not give the market the impression the “Fed put” remains in place.
Although the Fed made one of the largest policy blunders in decades, their task is about as easy and rewarding as a blind-folded two-person potato sack race through a crowded cow pasture. There are no real winners. Perhaps “savers” are the winners as the Fed’s tightening policy rewards savings with higher interest rates. In past editions of Insights, we have discussed at length the deflationary headwinds facing developed economies. Slow growth and increasing cost influences may support the stagflationary theme we have feared. Global instability and a possibility of a reordering of global powers and global trading blocks seem to solidify trends that could escalate the instability. The hodgepodge of influences includes deglobalization, relocation of strategic industries, protectionism, a need for supply-boosting policies and clean energy goals all to some degree replace trade based on comparative advantage and existing low-cost activities/resources with more expensive replacements (clean energy advocates, we are not saying what is “good” or “right” just what is the cheapest source of energy – in isolation of broader and more indirect “costs”). For more than a decade, some small reversal of the low inflation and cheap goods trend of the past 30 years may occur (when “Chinafication” of the manufacturing sector meant that many goods were produced in China and the Asian continent and sub-continent).
"It is what makes betting against the will of the U.S. consumer to spend, generally a bad bet."
Short term, the largest risk to cooling inflation down may involve the uncertainty caused by the lag in Fed policy moves and actual influence on economic activity, imbedded lags in economic indicators, OPEC, suspended disbelief, and well-intended political policy that marginally mitigates the Fed’s goals. Some of these inflation indicators are real and others may be unhelpful head fakes. The impact of Fed rate hikes and quantitative tightening have a marginal and gradual impact on the economy. Not everyone is making large purchases that are financed at the same time. Some indicators are constructed to reduce the noise created by volatility of the indicator. The widely watched Consumer Price Index (CPI) is largely influenced by rent prices. The headline number is approximately 30% determined by rent prices, where the Core CPI (excluding food and energy) is roughly 40% influenced by rent prices. Since rents are not often reset, typically at the end of the term of the lease, this component of CPI may put upward pressure on the CPI through 2023 and possibly into 2024. As long as the job market and average hourly earnings holds up, rent inflation should create the risk for stronger inflation numbers than are consistent with the Fed’s goals. That is not to say the Fed won’t consider more responsive measures of “shelter inflation” but CPI is a widely watched gauge of inflation. This mechanical reality of CPI could generate inconvenient messaging issues. As a result of a shift in global alliances, or possibly just some foreign policy missteps, OPEC is cutting production which should also put upward pressure on gas prices, a challenging development for many households. As evidenced by the declining savings rates and increased use of credit, consumers seem to have an amazing ability to suspend disbelief that the bad scenario is upon them and that they will temporarily be worse off than they may have been in the recent past. It is what makes betting against the will of the U.S. consumer to spend, generally a bad bet. Finally, it seems the most meaningful inflationary risk involves politics. As the pandemic has largely subsided, politicians have attempted to spend nearly $4 trillion (includes: $900 billion in the Stimulus and Relief Bill of December 2020, $1.9 trillion from the American Rescue Plan in March of 2021, $740 billion in the Inflation Reduction Act in August of 2022 and the $400 billion student loan debt forgiveness jubilee announced in September of 2022). Very little of that spending was related to address the pandemic or revive still ailing aspects of the economy. It was political spending to win over voters. Too bad that capacity to spend wasn’t saved for another rainy day but it wasn’t and now the tab to pay for the excessive spending is coming due (and the needless nearly 10% addition to the Federal debt gets to be paid for by taxpayers, most likely eternally). Perhaps the bond vigilantes will put fiscal responsibility back into vogue. In a way, our wildcard event, the dire “feel good” scenario somewhat came to be the case. In this scenario, Q2 GDP growth came in negative (and it did), placing the US economy in a recession (which is debatable, but we are not in an officially declared recession) and with mid-term elections coming up a solution to our recession would be another round of stimulus programs. In practice the impetus for the most recent spending efforts appears to be the goal of getting things done before a risk of gridlock makes big spending packages more challenging. The desensitization to unimaginable levels of spending makes it quite possible that the vigilantes are not the villains people think they are, rather they may be the hero to future generations.
Muni Market Developments – Here We Go Again
Municipal bonds have been on a similar unpleasant ride that the overall bond market experienced over the 3rd quarter. After muni bond fund withdrawals had occurred during most of 2022, we started to see deposits enter muni funds and yields fell in line with Treasury bond moves, but as the quarter neared the end, yields rose and withdrawals resumed. On a year-to-date basis through the end of the 3rd quarter, many managed municipal indexes lost between 15% and 20%. Through late September, investors pulled $97 billion out of municipal bond funds. That is nearly a quarter of average annual municipal bond issuance. On a lack of demand basis, the municipal bond sector had an unusual melt down in many regards. As some inflationary influences present themselves and as additional Fed rate hike resolve is made known, there is a case to be made for the possibility of another 3% to 6% downside, before the effects of an economic slowdown translate into lower yields.
In some regards, municipal bond investors may receive a small benefit resulting from the massive run up in yields. Typically, in the fall, issuance of new municipal bonds increases and yields often climb higher. The massive increase in borrowing costs has meant that many municipal refunding issues no longer make economic sense, while other municipal issuers may be holding off on their issuance in the hope that borrowing costs fall. In short, the modest issuance seems to be supportive of muni bond prices. Although September was a terrible month for bonds, the relative value of muni yields as compared to Treasuries is poor (meaning the muni yield is generally not as high as it “should” be as compared to a like-term Treasury). Another support for the muni market would very likely be that if rates moved much higher as compared to similar maturity Treasuries, crossover buyers (those who don’t benefit from the tax treatment munis offer) will probably jump back into the muni market to gain the non-correlation and typical price stability that munis often offer. In the strategy section, we will detail that there may be an area of the muni market where yields may be “too low” and if the right bid comes our way, we will sell some munis to raise cash ahead of what we expect will be a buying opportunity.
"Historically population loss is a significant distress signal for municipal financial health."
Last quarter we did a deeper dive into the financial health of many municipalities, detailing how many municipal entities came through the pandemic with stronger balance sheets than was the case at the start of Covid. A developing area of the muni market may be the plight of some urban areas. Safety issues and work from home flexibility have ridership of many large transit systems still down dramatically (on the order of 40%). Large transportation systems may be a risk going forward. Exposures in the nursing home, senior living, and healthcare area of the muni market will very likely be operating at a stressed position for the foreseeable future. An analyst from Strategas has predicted that major cities such as New York, Philadelphia, and Chicago will see populations decline by 20% to 30% and will need Federal bailouts. A crucial metric to watch for municipal financial distress is migration outflows. Historically population loss is a significant distress signal for municipal financial health. We expect challenges will exist but urban planners, supported by grant dollars, are “all in” on population density as a more efficient approach to housing and resource utilization.
Focus on “essential service” issuers such as water and sewer revenue bonds or school bonds, not issuers and projects that are exposed to market competition, substitution, or dramatic swings in revenue (such as convention centers, arenas, transportation, and nursing homes). We anticipate that as people fear exposure to “credit” in the coming months, all bonds could be punished. Shortly thereafter the market should gain its senses and will distinguish between a general obligation (GO) of a state, as compared to a “junk” rated company in the restaurant business, and prices for the GO will recover. There is a material difference, especially during times of stress, for holders of a perpetual entity like a state GO and a corporation with a more uncertain future. Owning individual bonds during a terrible time like we have had in 2022 is also a different experience relative to being in a fund. You are in command of the composition of your portfolio and if you don’t have defaults and hold the bonds to maturity, or call date if one is applicable, you can easily figure out the total value of the price appreciation from this point to maturity, along with all the tax-advantaged income you will receive along the way. In that regard, bonds are unique and a steady foundation for a portfolio (even if they are down approximately 15% for the year).
Strategy and Summary
Since the Fed is just now entering “restrictive territory” with the Fed Funds Rate, we are likely near peak volatility over the next few quarters. Additional hikes in November and December, totaling roughly another 125 basis points should start to weigh heavily on the economy. The November hike, and more probably the December hike may invert the 3-month Treasury yield as compared to the 10-year Treasury. Historically, this is a strong predictor of a recession. Even if it fails as an indicator, the truth of the matter is that we have switched from low yields and an accommodative Fed to some of the highest yields in 14 years with a tightening Fed. We had been encouraging spending and now we are enticing saving over consumption, but many consumers haven’t figured that out yet. Slowly but surely, they will see what the monthly payment in the new car is, and they will unceremoniously choose to fix the old car, and possibly feel good about the fact that they are earning something on unspent money. Alternatively, they may look at the cost of going out to dinner, and perhaps just paid the increased interest expense on their credit card balance and decide to make dinner at home. Multiply this marginal change in economic decision-making times 100 million and the weight of the Fed policy is both gradual and possibly multiplicative. Now, imagine if governments start to think this way with the help of the bond vigilantes. In the next six months, chances are, more people will start to feel “bad” about things. The Fed needs people to feel bad and expect to feel that way for the foreseeable future to “win” the battle with inflation.
Some of the largest bond-buying balance sheets in the world are stepping away from US Treasuries. It means a new bond-buying world order must be established. Rates must find a place where a more natural equilibrium exists. That sounds scary to bondholders, but, the uncertainty may make “risk-free” U.S. Treasuries not too far from these levels attractive to the free market, especially if we believe inflation will be brought under control and future economic activity is more subdued. Low risk yields of 4% and 5% start to be enticing, and it starts to make bonds attractive in many portfolio management applications. Empirically, valuation matters in all asset classes as it relates to forward returns. Again, bond yields are as high as they have been in 14 years (meaning prices are “low”). We expect it gets a bit worse before it gets better, but after suffering the worst losses in roughly 40 years, betting against bonds over the next handful of years seems like a bad wager. For illustration, if the stock market was at the lowest P/E ratio in 40 years and you had an investment horizon of more than 10 years, wouldn’t you start to buy into that market? To repeat, we think in the near-term people will fear credit, current market liquidity is poor, and some genuine sources of sticky inflation will probably drive yields and risk spreads higher. Adapting to opportunity in a bond portfolio typically involves averaging in and averaging out of certain portfolio or security characteristics.
"...liquid investors hold all the cards and may get compensated for being able to buy bonds when nobody else is in the market."
Our expectations are based on poor market liquidity, historical experience, and our outlook for economic growth and interest rates. Market liquidity at the time of writing this piece is as poor as it was during the worst time of March of 2020. Cash is king. Not only does cash likely lose the least in this environment (investors are getting a nice rate, but inflation is making them a net loser) but it means a person may have the ability to be a provider of liquidity when many people and entities are looking for liquidity. In short, at the current time and with the near-term environment we anticipate, liquid investors hold all the cards and may get compensated for being able to buy bonds when nobody else is in the market. Absent cash, the next area to explore will be to test the market for selling pre-refunded municipal bonds that will be called in the next few years. Pre-refunded munis are typically backed by U.S. government securities, so they don’t have credit risk and they pay tax-advantaged income. Pre-refunded munis inside of three years have yields that are approximately 100 basis points to 150 basis points below comparable maturity Treasuries. The goal in selling the pre-refunded bonds would be to raise cash for a short time to position ourselves to buy bonds when people are feeling bad about credit and concerns about inflation being “out of control” hit the market. It isn’t often the case that a person can easily or efficiently sell bonds in one area of the portfolio to fund purchases in another segment, during a market event. Many advisors and investors extended the duration of portfolios too early in this market event, so maturities inside of the 10-year area, with maximum call protection may be more appropriate for some investors. Finally, the last opportunity may be to make lemonade out of lemons. If liquidity returns to the bond market, for investors who can use tax losses (please consult a tax advisor), selling bonds to harvest the losses to apply against capital gains (current or future) may be a way to get something out of living through the worst bond market in 40 years. Please reach out to us if that has application to your situation.
At the start of 2022, the Fed thought they would raise rates by approximately 75 basis points in 2022. With their massive budget, huge balance sheet, market influence, and their army of PHDs and analysts, they were wrong by 400%, and at the end of the year, they could have missed it by nearly 600%. We thought at times during 2022 that the 10-year Treasury yield would hit 2.50% and flirt with 3.0%. We currently sit close to 4.0%. All of this may be a good example of decision anchoring, basing your forecast on past estimates. To break away from our anchors, we need to understand that in 1980, the Fed Funds Rate topped out at 20%. That is the unimaginable level of pain, inefficiency, and economic destruction the Fed is trying to avoid. The kind of pain that makes people wear earth tones and corduroy. This Fed is committed to avoiding as much of that misery as is possible. They are going to slow this economy down and when things break, we expect that the fixes will be technical in nature and possibly not widely advertised or understood. The reason being, they cannot perpetuate the expectation of the “Fed put” as they are trying to make the economy feel bad, and the sad truth is they must squeeze hope out of the market psyche. 10-year Treasuries may see yields hit closer to 5% and when recession is solidified, we think yields could be lower in a year from where we currently sit. 10-year munis may see a spike to 4.50% and then recover as cross-over buyers and long term investors see that yield meets their long-term needs and the nuance is established that not all “credit” risk is the same.
There is only one way to express our parting thought. Investors are expressing their concern about the unrealized market value losses in their “stay rich” municipal bond portfolios. The best thing advisors can do is to study the markets and do their best to avoid sloppy portfolio decisions and credit losses. Investors will very likely have reason to feel bad at times during the coming months, but when the Fed achieves its driving goal of making everyone feel bad, bond investors should start feeling better.
This Newsletter is impersonal and does not provide individual advice or recommendations for any specific subscriber, reader or portfolio. This Newsletter is not and should not be construed by any user and/or prospective user as, 1) a solicitation or 2) provision of investment related advice or services tailored to any particular individual’s or entity’s financial situation or investment objective(s). Investment involves substantial risk. Neither the Author, nor Advanced Capital Group, Inc. makes any guarantee or other promise as to any results that may be obtained from using the Newsletter. No reader should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, the Author and Advanced Capital Group, Inc., disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations in the Newsletter prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses. The Newsletter’s commentary, analysis, options, advice and recommendations present the personal and subjective views of the Author and are subject to change at any time without notice. The information provided in this Newsletter is obtained from sources which the Author and Advanced Capital Group, Inc. believe to be reliable. However, neither the Author nor Advanced Capital Group, Inc. has independently verified or otherwise investigated all such information. Neither the Author nor Advanced Capital Group, Inc. guarantee the accuracy or completeness of any such information.