By Gayl Mileszko
Memory of an Elephant
From the moment we awaken each morning, we are hit with a barrage of data for our brain to process and sort. We store it all somewhere, and miraculously manage to prioritize all these incoming streams of information in order to function. In this digital age, it is all too common to have headaches from the weight and speed of the inputs. To avoid some overload, we might focus on family breakfast table talk and dodge texts. Emails. Webinars. Phone calls. Of course, there are always things screaming for our attention. A wailing baby. Flashing red lights. Ambulance sirens. And we often find our attentions drawn to favorite things. Best friends. Billboards with a funny message. College football games. A catchy tune. Fresh based chocolate chip cookies. There comes a time, however, when our brains will work at a slower pace, when it takes us longer to recall a word, a name, where we left our house keys. Blessed with good genes or smart lifelong choices, some of us will still be sharp as a tack at 100. But quite a few of us will lose our ability to function in the real world and eventually need near round-the-clock help.
Where Did I Leave My Keys?
Contrary to the thinking of many in their prime or in middle age, cognitive decline begins at about age 40. Over the next 30 years, it often becomes increasingly hard to retrieve memories or learn something new. Some language functions may weaken, numbers and letters may take longer to process. By age 65, about 40% of us will notice some occasional memory trouble, and nervously start to read up on Alzheimer’s Disease and other forms of dementia, on high alert for any feelings of confusion or being overwhelmed. We may laugh when we find our car keys in the refrigerator, but it might be past time to seek out a healthcare provider if we forgot what the keys are for. Those with concerns, or anyone wishing to establish a baseline, can take a simple, free, self-administered online test such as the Self-Administered Gerocognitive Examination (SAGE), developed by Ohio State University.
Risk of Memory Loss and Fear of Cost of Care
The Alzheimer’s Association has published a list of 10 early signs and symptoms, all of which are familiar to everyone with firsthand experience in caring for a loved one who has been affected. They estimate that the federal government is spending $3.8 billion a year on dementia research. So far, we have produced medications that can help manage symptoms but there are also some recent and promising advances in disease-modifying treatments. The numbers of Americans affected (nearly 7 million) and annual long-term care costs ($360 billion) are not insignificant. Here in the U.S., about four percent of adults 65 and older have been diagnosed with dementia. For those between 65 and 69, it affects two of every hundred. The risk increases with age, roughly doubling every five years. By 85, the percentage increases to 13%. Once diagnosed, the average Alzheimer’s patient will live between 3 and 11 years. But some with lower rates of progression or different degrees of impairment can live 20 years or more. Spouses, adult children, friends slowly find themselves in long-term caretaking positions. In 2023, unpaid caregivers provided an estimated 18.4 billion hours of care, valued at nearly $350 billion. In many cases, professional care becomes not only an option but a necessity. The average monthly cost in a memory care community was $6,160 in 2023, and $7,908 for a shared room in a skilled nursing community.
Salute to the Memory Care Providers
The National Investment Center for Seniors Housing and Care estimates that there are 1,600 memory care facilities with 86,000 units serving 73,000 residents in America. There are also approximately 1,900 continuing care retirement communities, many of which offer memory care in their continuum of services. HJ Sims has been proud to work with many nonprofit and for-profit operators serving this needy population and we always find ourselves not only impressed but deeply moved by the doctors, nurses, personal care teams, and administrators who attend to these special residents in assisted living and skilled nursing environments.
Memory Strengthening Exercises
From time to time we will highlight some of the more innovative memory care programs at communities that we have helped to finance. This week, we note a program developed by Rob Liebreich, the President and CEO of Goodwin Living. As part of an educational outreach effort, and overall commitment to improving brain health, Rob created a 3-person Brain Health Leadership team which, among other duties, oversees a course of simple exercises to perform every day for 30 days. The exercises are designed to activate the prefrontal cortex — the section behind the forehead that takes up 10% of the brain and helps to control memory retrieval and executive functions. The program called StrongerMemory is designed for everyone and is available to download at no cost as a result of funding from the Goodwin Living Foundation.
Elephants and Donkeys Never Forget, Never Learn?
We are less than two weeks away from Election Day ballot counting. Political junkies are in their element, but the rest of America wishes that this election could be a distant memory. Many are exhausted by the rhetoric, the ads, the fundraising pleas, the polls that are never reliable, the odd endorsements, the lack of substance, the platforms that now permit betting on presidential candidates alongside horse races and NFL point spreads. As long as we trust the integrity of our ballot counts, every vote indeed matters, not only in deciding the next occupant of the White House but the composition of a Congress that will support or block the Administration’s key fiscal and legislative policies. More than 18 million people have voted early but we have a long way to go. In the 2016 presidential election, more than 136 million votes were reportedly cast, and in 2020, that count was said to exceed 158 million of the 239 million eligible.
In Memoriam: 1987, 2009 and 2020
Memories of the Black Monday 1987 stock market crash have nearly entirely faded. On October 18 of that year, the Dow lost 22.6% in one day. It took less than 2 years to recover, but over the course of 37 years, the index has increased exponentially from 1,738 to 42,489. Few traders who lived through that time remain at the desk, but many were again jarred by the Great Financial Crisis which saw the Dow fall to 6,547 in March of 2009 but double in value within 3 years. The pandemic declaration in March 2020 saw the benchmark drop to 18,591 but it more than double over the next 4 years. This election year, with its candidates and backdrop of domestic and geopolitical turmoil, is historic in many ways, but the financial markets, as always, will come to analyze and digest the results, and move on once the outcome is clear.
Committing 2024 to Memory
At this writing, amidst all the market uncertainty over rates and war and election outcomes, the staggering number of Treasury auctions, Federal Reserve signals, record high levels of corporate and municipal bond issuance, the astonishing array of mixed economic data accompanying mostly solid corporate earnings, the Dow is nevertheless up more than 1% in October and 12% in 2024. The Treasury yield curve inverted for the longest period on record but, at this writing, the 2-year Treasury yield at 4.07% is down 17 basis point year-to-date, while the 10-year yield has risen 36 basis points, and the 30-year is up 49 basis points to 4.52%. The 30-year Treasury yield benchmark is well below where it stood in October of 1987 (9.09%), but higher than in March 2009 (3.48%) and March of 2020 (1.35%). The ICE BofAML Treasury index has returned 2.35% so far in 2024, well below the investment grade corporate bond index at 4.59% and the high yield corporate bond index at 7.88%. The high yield municipal bond index is a bond market hero — returning 8.29% year-to-date. Taxable munis are up 3.10%, and investment grade munis have gained just over two percent.
Muni Memory Bank
Last week, HJ Sims came to market with a $29.4 million non-rated financing for Cincinnati Classical Academy, an expanding K-8 charter school in Ohio with 746 students and 425 students on the waitlist. We structured the transaction with five term bonds which sold through the conduit Public Finance Authority in Wisconsin. The final maturity in 2064 priced with a coupon of 6.00% to yield 6.05%. Also in the charter school space, the California Enterprise Development Authority brought a $38.7 million BB+ transaction for Rocklin Academy that featured a 40-year term bond priced at 5.00% to yield 4.66%. The Chester County Industrial Development Authority in Pennsylvania issued $31.9 million of BBB-minus rated bonds for Renaissance Academy Charter School that included a 40-year term bond priced at 4.50% to yield 4.74%. And Alta Public Schools came to market with a $10.7 million non-rated deal that sold through the California School Finance Authority with a term bond due in 2064 priced at 6.00% to yield 6.125%.
10 Weeks Left in 2024 to Make Memories
The fourth quarter comes to a close in less than 10 weeks, so we invite you to get in touch with your HJ Sims representative to review your portfolio, investment, and forward financing plans. We live in uncertain times but always work closely with you to balance risk, set practical goals, and devise innovative approaches. Our firm has a nice pipeline of new issues to discuss and a wide range of investment strategies tailored to meet your needs and goals. Take a few minutes to reach out to your HJ Sims banker, broker, or adviser or sales representative this week to share your concerns and plans. We never forget how much you, your family, and your organization mean to us.