2018 Economic Forecast

10 Things to Know About the Global Economy

January 3, 2018

Source(s): Richtopia.com

2

Words of Wisdom

“Whenever you find yourself on the side of the majority,

it is time to pause and reflect…”

Mark Twain

“Stock prices have reached what looks like a permanently high plateau. I

don’t feel there will be soon, if ever, a 50 or 60 point break from present

levels, such as Bears have predicted. I expect to see the stock market a good

deal higher within a few months”

Irving Fisher, Yale Economist, October 17, 1929

“America is now in the eighth year of prosperity as commercially defined.

The former great periods of prosperity in America averaged eleven years.

On this basis we now have three more years to go before the tailspin”

Stuart Chase, NY Herald Tribune, November 1, 1929

“History doesn't repeat itself, but it does rhyme…”

Mark Twain

3

Source(s):

One: Synchronized Global Growth Catalyzed By Global Central Banks

Source(s): seeitmarket.com, @TopDownCharts.com, Yardeni.com

4

Source(s):

Despite Tightening Rhetoric, Global Monetary Policy Still Incredibly Loose

Neuberger Berman

5

Source(s):

Contrary To Rapid Global Expansion Rhetoric, Real GDP Growth Moderate

Neuberger Berman

6

Source(s):

Two: Global Manufacturing Recovery Been One Of Strongest On Record

Neuberger Berman, Strategas

7

Source(s):

Global PMIs Highest Since 2011, Only One Country (South Africa) Below 50

seekingalpha.com, JPMorgan, timemoney.com

8

Source(s):

Europe Accelerating Off Low Base, U.S. & EM PMI Rates May Have Peaked

Neuberger Berman

9

Source(s):

Three: Despite $Trillions of CB Liquidity, U.S. Recovery Well Below Average

Strategas

10

Source(s):

Oil Price Collapse May Have Extended U.S. Economic Cycle Like In 1980’s

Strategas

11

Source(s):

U.S. GDP Increasingly More Reliant On Personal Consumption Expenditures

AdvisorPerspectives.com

12

Source(s):

Inflation Stubbornly Below Fed 2% Target, PCE Well Below CPI, Skews Data

AdvisorPerspectives.com

13

Source(s):

When Adjust Real GDP For Population Growth, Past Decade Barely Positive

AdvisorPerspectives.com

14

Source(s):

When Savings Rate Collapses, Signals Much Lower GDP Growth Ahead

Hoisington Capital Management

Since 1930 the regression coefficient indicates that a 1% drop in the

personal saving rate in the current and prior three years will lower

the real GDP growth rate by a substantial 0.65%. Considering that

the present 3.6% saving rate is lower than all of the initial starting

points of economic contractions since 1900, the outlook for ebullient

growth is problematic particularly in the context of slow and

diminishing income growth.

15

Source(s):

Four: U.S. Economic Data Appear To Be Approaching Peak Inflection Point

Yardeni.com

16

Source(s):

Unemployment Rate At Levels Where Recessions Begin, Job Growth Fading

Strategas

17

Source(s):

Consumer Confidence At Levels That Precede Recessions, Rolling Over…

AdvisorPerspectives.com

18

Source(s):

Business Optimism Extremely High Due To Expectations For Tax Cuts

Strategas

19

Source(s):

Housing Was Fading Before Hurricane Rebuilding Bump, Tax Bill Negative

Strategas

20

Source(s):

Increasing Evidence That #2000Redux Thesis Might Apply In 2018

GMI

21

Source(s):

U.S. Economic Indicators Closely Following Path Of 2000 to 2002 Period

GMI

22

Source(s):

Possible That Rates May Not Rise As Much As Some People Expecting…

GMI

23

Source(s):

Govt Revenues Declining Toward Recession Levels, Now We Cut Taxes?

Yardeni.com, scottgrannis.blogspot.com

24

Source(s):

Gann Financial Time Table & Benner Cycle Point To 2019 For Next Crisis

Time-Price-Resaerch.com

25

Source(s):

Five: Central Bank Financial Repression Keeping Lid On Global Bond Rates

Strategas

26

Source(s):

The Trend Is Your Friend Until It Ends…Secular Lows In Yields Likely Ahead

Strategas

2.415

27

Source(s):

Six: Dollar Tends To Peak When Fed Actually Raises Rates, Not After

Source(s): Strategas.com

28

Source(s):

King Dollar Appears To Have Peaked After 1st Fed Hike, Just As Expected

Source(s): MarketWatch.com, NeubergerBerman.com

29

Source(s):

Seven: ECB Stimulus Has Been Extreme, Averted Crisis, Challenges Remain

Neuberger Berman, Strategas

30

Source(s):

European Growth Recovering, But Sentiment Exceeds Actual Expansion

Neuberger Berman

31

Source(s):

Euro Strength Presents Unique Challenges Based On Current Accounts

Neuberger Berman

32

Source(s):

European HY Trading Below UST? Would You Pay Italian Govt To Borrow?

@ttmygh, @Schuldensuehner

33

Source(s):

Eight: Abenomics Appears To Have Awakened Animal Spirits In Japan

Neuberger Berman

34

Source(s):

Abenomics Spurred Solid GDP Recovery In Japan Strong, EPS Best In DM

Strategas

35

Source(s):

Kuroda-San Has Pedal To Metal At BOJ, Massive Money Supply Expansion

Neuberger Berman

From Near Surplus

in 2006 Back to Big

Deficits Today…

36

Source(s):

Nine: China Saved The World (Again), Economic Indicators Very Strong

Source(s): Yardeni.com, Strategas, @DAVIDINGLESTV

Manufacturing

PMI at 5 year high

37

Source(s):

China $1Trillion Stimulus Boosted Global Growth (Again), Now Receding…

@jTopdownCharts @JP_OB, Strategas

38

Source(s):

Emerging Market Growth & Valuation Setting Up A Decade Of Dominance

GMI, Strategas

39

Source(s):

EM Lending Conditions Back In Easing Zone, Best Liquidity Since 2013

@PKZweifel

40

Source(s):

Ten: Debt Fueled Bubble Has Created A World Of Pure Imagination

@ttmygh

41

Source(s):

A Trillion Here, A Trillion There, Pretty Soon We’re Talking Real Money...

@ttmygh

42

Source(s):

All This Debt & All I Got To Show For It Was This Lousy Growth…

@ttmygh

43

Source(s):

Then Suddenly It Hit Me What Was Going On, Like A Ton Of Gold Bricks…

@ttmygh

44

Source(s):

Never Been Better Time To #GetReal, Buy Hard Assets & Sell Paper Assets

@ttmygh

45

Source(s):

CRB Index Bounced Hard Off June Gann Turn Date, Lots Of Headroom

BigCharts.com

When looking at the return

data over a decade, recent

move barely registers

46

Source(s):

Many Have Called Bitcoin A Bubble (Over & Over), Pattern Did Look Similar

Coindesk.com, marketpredict.com

Wrote About Bitcoin

as Special Situation

Opportunity 2Q14

People Said

Bitcoin a Bubble

Here too…

47

Source(s):

We Thought Internet Of Money More Likely Getting Warmed Up For Assault

Oftwominds.com, @woonomics

48

Source(s):

Over Bitcoin History No Shortage Of Challenges, Price Following Parabola

@CoinTelegraph, @chrisburniske

11/28/2017

49

Source(s):

Bitcoin (Crypto) Is Just Getting Warmed Up, Early Majority Now Emerging

@cburniske, @sharkybit

90%

10%

HODLers

Doubled

In 3 Mos

50

Source(s):

Diversification Benefits: Small Bitcoin Allocation Has Big Portfolio Impact

@RVPub, @GrayscaleInvest, Strategas

51

General

This is neither an offer to sell nor a solicitation of an offer to buy interests in any investment fund managed by Morgan Creek Capital Management, LLC or its affiliates. Any such offering can be made only at the time a

qualified offeree receives a Confidential Private Offering Memorandum and other operative documents which contain significant details with respect to risks and should be carefully read. Neither the Securities and

Exchange Commission nor any State securities administrator has passed on or endorsed the merits of any such offerings of these securities, nor is it intended that they will. This document is for informational purposes

only and should not be distributed. Securities distributed through Town Hall, Member FINRA/SIPC.

Indices

The index information is included merely to show the general trends in certain markets in the periods indicated and is not intended to imply that the portfolio of any fund managed by Morgan Creek Capital Management,

LLC was similar to the indices in composition or element of risk. The indices are unmanaged, not investable, have no expenses and reflect reinvestment of dividends and distributions. Index data is provided for

comparative purposes only. A variety of factors may cause an index to be an inaccurate benchmark for a particular portfolio and the index does not necessarily reflect the actual investment strategy of the portfolio.

No Warranty

Morgan Creek Capital Management, LLC does not warrant the accuracy, adequacy, completeness, timeliness or availability of any information provided by non-Morgan Creek sources, including accessibility of

unavailable funds.

Risk Summary

Investment objectives are not projections of expected performance or guarantees of anticipated investment results. Actual performance and results may vary substantially from the stated objectives with respect to

risks. Investments are speculative and are meant for sophisticated investors. An investor may lose all or a substantial part of its investment in funds managed by Morgan Creek Capital Management, LLC. There are

also substantial restrictions on transfers. Certain of the underlying investment managers in which the funds managed by Morgan Creek Capital Management, LLC invest may employ leverage (certain Morgan Creek

funds also employ leverage) or short selling, may purchase or sell options or derivatives and may invest in speculative or illiquid securities. Funds of funds have a number of layers of fees and expenses which may

offset profits. This is a brief summary of investment risks. Prospective investors should carefully review the risk disclosures contained in the funds’ Confidential Private Offering Memoranda. No investment is risk free;

loss of principal is possible. Alternative investments involve specific risks that may be greater than those associated with traditional investments. One should consider the special risks with alternative investments,

including limited liquidity, tax considerations, incentive fee structures, potentially speculative investment strategies, and different regularly and reporting requirements. There can be no assurance that any investment

will meet its performance objectives or that substantial losses will be avoided.

Safe Harbor Statement

This presentation shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of, the securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful

prior to registration or qualification under the laws of such state or jurisdiction. Forward-Looking Statements: This presentation contains certain statements that may include "forward-looking statements" within the

meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included herein are "forward-looking statements."

Included among "forward-looking statements" are, among other things, statements about our future outlook on opportunities based upon current market conditions. Although the company believes that the expectations

reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual results could differ materially from those

anticipated in these forward-looking statements as a result of a variety of factors. One should not place undue reliance on these forward-looking statements, which speak only as of the date of this discussion. Other

than as required by law, the company does not assume a duty to update these forward-looking statements. Past performance is no guarantee of future results. The illustrations are not intended to predict the

performance of any specific investment or security. The past performance figures do not represent performance of any MCCM security and there can be no assurance that any MCCM security will achieve the past

returns of the illustrative examples. This is not an offering to subscribe for units in any fund and is intended for informational purposes only. An offering can only be made by delivery of the Prospectus to “qualified

clients” within the meaning of U.S. securities laws.

Important Disclosures

52

Contact Information

Morgan Creek Capital Management, LLC

301 W. Barbee Chapel Road, Suite 200

Chapel Hill, NC 27517

Phone: 919-933-4004

Fax: 919-933-4048

Contact: Mark W. Yusko

Email: myusko@morgancreekcap.com

Web: www.morgancreekcap.com

53