Unstoppable Force Meets the Immovable Object

​The U.S. consumer has been the “Unstoppable Force” for several decades.  Despite constant prognostications of his or her demise, the U.S. consumer has shown the willingness to power through every setback.  He has fought high inflation, catastrophic job losses, civil unrest, and the great recession.  This unique engine of growth - the spine of our economic framework - is 70% of the economy and a centerpiece of global growth.
 
While there was a laundry list of reasons for his demise, a pandemic is a worst-case scenario.  In a service dominated economy like ours, the shutdown of small business – which is high on GRIT but low on financial resources –– severely cripples the consumer.
 
The two pillars to our economy are 1) employment, and 2) lending.  A loss of millions of jobs shuts down spending, which leads to more job losses.  When the consumer shuts down, so do lenders.  Why would any private entity offer a loan when the probability of payback is greatly reduced?  The lack of jobs and void of lending creates a negative feedback loop that becomes hard to break.  The true solution – a vaccine – is many months away.  The unstoppable force is now in a downward spiral at breath-taking speed.
 
The Federal Reserve is the “Immovable Object.”  Within its arsenal is the power to create unlimited money.  In their words ‘there is no limit’ to what they can do.  The Fed has stepped in before to solve crises and has been rightly or wrongly criticized for its actions.  Generally, it has moved very slowly, and acted when forced to act. 
 
Realizing the gravity of today’s situation, the Fed has moved at lightning speed with incredible force. As traditional lending steps away to minimize losses, the Fed has pledged to back every business, and do whatever it takes.  As usual, there are a lot of critics, but letting businesses fail accelerates our downward trajectory and creates more rubble on Main Street.  While the Fed cannot create jobs, or generate demand, they can lend to keep the wheels greased.
 
As citizens and consumers, we hope the Fed can buy enough time for researchers to work a miracle cure or at least a viable treatment.  But as investors, we are in unchartered territory.  There are no Playbooks.  While every expert has a loud opinion, the best move today is to stay optimistic  - to learn a lot - and do very little.  More likely, great ‘one-off’ opportunities lie in the future.
 
The unstoppable force is meeting the immovable object.  We hope the good guys win. 

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This material does not constitute an offer or solicitation to purchase an interest in Latticework Partners, LP (the "Fund").  Such an offer will only be made by means of a confidential offering memorandum and only in those jurisdictions where permitted by law.  An investment in the Fund is speculative and is subject to a risk of loss, including a risk of loss of principal.  There is no secondary market for interests in the Fund and none is expected to develop.  No assurance can be given that the Fund will achieve its objective or that an investor will receive a return of all or part of its investment.

This material contains certain forward-looking statements and projections regarding the future performance and asset allocation of the Fund.  These projections are included for illustrative purposes only, are inherently speculative as they relate to future events, and may not be realized as described.  These forward-looking statements will not be updated in future.