Neil Siskind – Landscapes

empire

Camouflaged Empire, copyright 2018 Neil S. Siskind

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Neil Siskind’s Poetry

That Homeless Woman

A peasant, she, who shares the street
with rats, and pillows of concrete?
The feral cats from alley beats
lick the food stuck to her feet,
Day and night she hunts for eats,
old clothing tossed becomes her sheets,
Neighbors, mayor, so discreet,
as all ignore this sore defeat.
Aid this woman- be “elite”,
exhibit class by being sweet,
tender food or stop to greet
a human drenched from summer’s heat
and frozen by the winter’s sleet-
a fate no woman dreamed she’d meet.

What Would Be Far Worse Than An Inverted Yield Curve? Read-My-Lips- By NEIL SISKIND

 

When the economy slows, tax receipts to the government, necessarily, will fall. At the exact time that we need, and expect, bond yields to move lower, they could do exactly the opposite.

As the economy slows, the government still needs to fund the budget, including paying interest on the national debt, defense expenditures, entitlements, federal employee pensions, etc. If tax receipts are not enough to fund these obligations, then the government will need to take on debt by selling Treasury bonds to fund the obligations, which could cause yields to skyrocket, as investors demand more and more yield (and, perhaps, the term premium rises where capital is not being attracted), and as other investors discontinue viewing U.S. bonds as safe havens and move to other assets, including other select countries sovereigns that are unlikely to fall further, while offering good yields. The 10-yr. Treasury yield could completely disconnect from the economy, and the yield curve could aggressively steepen- sending a slow economy into recession, or one that is in recession- even deeper. Because of the government’s excessive and growing funding needs, even the floating 10-yr. yield would be out of the control of market dynamics and market demands (and the U.S. dollar could still be weak, even as yields climb).

The only “good” reason for interest rates and yields to rise is due to growth. Yields and rates can rise without growth if there is inflation- in which case, investors can, at least, try to benefit from such inflation through assets that have inflation protection- or rise with inflation, such as equities of business that can raise prices, or energy. But, it is never good, and there are no benefits, when yields and rates rise without inflation[1][2], or with little inflation, and without growth- such as where such increases only occur in order to to fund budget deficits. As recent PPI, CPI, and consumer spending prints have disappointed, and it is almost 100% consensus that future GDP prints will be lower than the prior quarter’s, and as the 10-yr. yield has been climbing (and the U.S. dollar declining), we are approaching this scenario[3].

Even if investors re-deploy capital simply due to better opportunities than in the 10-yr. Treasury, as opposed to investor concern over government funding of deficits through continued bond offerings, if it’s still the case that the 10-yr. yield is rising as economic data points in the U.S. are declining- economic slowing will negatively affect tax receipts and the federal budget. Even as the economy slows, there may be a floor on the 10-yr. due to the need to fund deficits- and the yield curve (or yield curves) may never invert- even as recession looms or arrives.

Regardless, budgets and deficits can’t be funded by endless bond offerings. The budget, by and large, has to be funded by tax revenues.

At the 1988 Republican National Convention, when accepting the Republican Party’s nomination as their candidate for U.S. President, George H.W. Bush famously made the statement, “Read my lips: No new taxes.” to assure voters that his administration would not raise taxes on Americans. By 1990, rising budget deficits fueled by slowing growth and mandatory spending, greatly increased the federal deficits. As the result, on November 5, 1990, President Bush, grudgingly, signed The Omnibus Budget Reconciliation Act of 1990 that raised multiple taxes.

This decision was the equivalent of Present Bush signing his own political death certificate as Bill Clinton used this broken promise on taxes against Bush in the 1992 presidential campaign (yes- Bill Clinton actually used the issue of “truthfulness” against someone- and it worked; irony- and gall- in politics- and in life- never cease to amaze)[4].

President Trump may face a George H.W. Bush “Read my lips: No new taxes.” moment where, despite prior promises and actions, he, nevertheless, has to agree to raise taxes to fund on-going budget deficits- regardless of which party controls Congress- or else allow longer term Treasury yields to soar, especially where rate cuts by the Fed would be difficult if the Fed funds rate and related shorter term Treasuries are still low- one of the reasons (one of the main reasons) that the Fed points to any scintilla of inflation[1] to use as an excuse to keep raising rates- as insurance for the future. The Fed would not be able to rescue the economy with rates cuts designed to stimulate growth- at least not without cutting to zero.

Hopefully, in such case, U.S. bonds would become more appealing to investors as tax hikes (hopefully) bring deficits under control, allowing rates to decline, and a new economic cycle to begin. With higher taxes ad little room for the Fed to lower rates, it would be a challenge.

Question: What would be worse than an inverted yield curve?
Answer: A steep yield curve in a slow economy, causing higher costs of capital to businesses and consumers, with higher taxes to follow … all at the worst possible time.

_________________________________________

fn

  1. I suppose we could argue all day long over whether we have sustainable, or even present “real” wage inflation. Even if there is wage inflation, if PPI and CPI are weak, where businesses can’t pass though costs, business profits will suffer, and investors will have no way to benefit from this type of inflation. Earlier-on in the business cycle, as liquidity was not in decline, and as GDP had room to grow, wage inflation would have been more acceptable, and even welcomed, as a stimulus to demand side growth. At this stage of the cycle, wage inflation is an expense (rather than a stimulus), and is offset by the rising commodities costs (namely, energy) and the higher interest rates present in the late stages of a business cycle. It’s unknown, and unknowable, how wage inflation earlier on in the cycle would have helped or hindered growth. Wage inflation is not the kind of inflation from which investors can benefit.
  2. Even if there is price inflation due to late cycle expenses or due to trade- this would be in additions to, not instead of the deficit causing the rising yields. With PPI, CPI, consumer spending, GDP expectations, housing related data, capex spending expectations, and S. Korea employment all lower (and much of the earnings growth due to share buybacks), and growth in stocks are not likely due to economic or earnings growth expectations- but, rather due to tariff related inflation expectations. Earnings guidance is becoming murky and the President is beginning to excuse “deficits”.
  3. Certain dynamics could offset rising yields, such as, at a certain point, high yields attracting yield-seeking capital that helps push yields lower.
  4. It was, actually, the overall sluggish economy, probably combined with many American’s “Republican-fatigue” after twelve years of a Republican White House (all of which included Bush) that contributed to President Bush’s defeat- plus the possibility that many Ross Perot votes would, otherwise, have gone to Bush.

 

endnote

As the 10-yr. yield has been rising, the dollar is declining- which indicates that expectations of rising deficits and rising Treasury sales to fund those deficits may be the cause of rising yields- rather than economic growth (rising stocks may signal expectations of inflation from tariffs). If tariffs are later seen as causing deflation, then stocks will be lower. Bond prices depend if a fear of sales to fund deficits persist. Investors may be left with no domestic safe havens- except gold, perhaps.

 

Neil S. Siskind, Esq., President
The Siskind Law Firm
Tel: 646.530.0006

Neil Siskind is the Founder & Chairman of The Fatherhood Assignment
Neil-Siskind-photo
Learn more at:  http://www.neil-siskind-the-fatherhood-assignment.org/

Neil Siskind is the Conservator of the Neil S. Siskind Nature Preserve
Neil-Siskind-Picture

The Neil S. Siskind Nature Preserve is over 7 acres of environmentally-pristine waterfront land in a magnificent setting along New York’s majestic Hudson River. The Preserve includes a variety of species of animal and plant life, and is a precious example of the thoughtful maintenance of New York’s priceless open spaces. The land’s uses are limited to outdoor recreation such as hiking and climbing, and the study of ecology, nature and land use. The Neil S. Siskind Nature Preserve allows for the intelligent contemplation of our valuable natural resources and the most effective ways to maximize them and keep them protected.

Neil Siskind, Founder, “National Fatherhood Day” – March 29th

Neil-Siskind-pics
To encourage recognition of the needs of boys and girls who are living without fathers or father-figures in their lives.

Read about the non-profits and charities whose missions Neil Siskind supports and promotes: www.neilsiskindsupports.com
Caring is Free®

You can read what clients and associates say about Neil Siskind at: http://siskindlawfirm.com/neil-siskind-bio/.

Neil Siskind’s Volunteer Work:

– Memorial Sloan Kettering Cancer Center, Volunteer

– Memorial Sloan Kettering Cancer Center, My Fundraiser- Help Neil Siskindhelp children with cancer to be more comfortable: http://mskcc.convio.net/site/TR?px=3182108&fr_id=2632&pg=personal

– Make-A Wish Foundation- Help Neil Siskind make sick children’s wishes come true by creating your own fundraiser: Neil-Siskind/Help-Make-A-Child-Smile.htm

– DonorsChoose.org- Donate to one of my needy public classrooms: http://www.donorschoose.org/NeilSiskindGiving

– Champion Children– We seek to inspire people through stories of children who have overcome challenges: http://siskindlawfirm.com/neil-siskind-champion-children/


Neil Siskind’s Pro Bono
 Work:

– Saving Senior Citizens- Protecting New York’s senior citizens from fraud and financial abuse www.savingseniorcitizens.com

– Senior FreeStart Business– Pro Bono: We seek to help put senior citizens in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/

– Veteran FreeStart Business– Pro Bono: We seek to help put Iraq and Afghanistan war veterans in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/

– In development: The Neil S. Siskind School of Hope: A free school to teach inner-city youths the skills of entrepreneurship and importance of economic self-sufficiency.

Neil Siskind’s Government Work:

– Suffolk County District Attorney’s Office, Boston, MA, 1994, Intern
– Office of Senator Christopher J. Dodd, Newington, CT, 1992, Intern
– Hartford County Department of Probation, Hartford, CT, 1991, Intern

Neil Siskind’s Community Assistance:

Financed & operated a legal clinic providing low-cost legal services to struggling Long Islanders during the recession to help clients resolve debt, organize finances, and launch new businesses.

Neil Siskind’s Professional Curriculum Vitae: http://neilsiskind.com/

Sponsored Advertisements

Inventors, IP Owners, Manufacturers
Learn How To Bring Products To Market And To Expand Your Distribution Channels
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Manufacturing, The “Only” Way to Achieve “True Wealth”- By NEIL SISKIND

While there are many ways to make good amounts of money- to become truly “wealthy”- one must “manufacture”- or make or create something from nothing where the final product is worth greater than the cost to make it. This concept, or theory, includes the right to distribute something that was made or created- and best to do it on an exclusive basis.

This applies even to companies like Google or Amazon. Google’s success is due to an algorithm it created and then distributed to others. Amazon manufactured or created a marketplace for the masses. It created something new and better.

A real estate developer- a truly wealthy one- took land or a small structure and manufactured or made it into a much bigger or better piece of land or structure.

Drug makers develop and “make” drugs that they patent and sell.

Commodities producers have exclusive rights to find and extract natural resources which they own and have the exclusive right to sell.

Even the film and television industries manufacture content at a cost, a program or movie, which they can sell for more than it cost to create and make- and certain companies distribute or broadcast those creations on an exclusive basis. Both can achieve wealth.

Even musicians create and manufacture a song that did not previously exist.

There are some exceptions to this rule: Those in finance, who buy and sell stocks or commodities- who invest (short and long term) in businesses that make things; lawyers who engage in class actions against large industries (this is a small percentage of lawyers who achieve “real” wealth this way); actors don’t create any “thing” (the production company makes something- but actors just help sell it, and can get wealthy this way; contractors, including environmental cleanup companies, for example, don’t create things or ideas, but they actually do the labor that manufacturers or land owners (including governments) need in order to make or improve things that they made or to which they own the rights (nevertheless, truly wealthy people either own the properties or have achieved wealth through government relationships or by having their companies trading on the pubic exchanges); banks borrow and lend and make the spread (though they did make or create that marketplace-their companies and distribution channels- to do that in a mass manner).

One can move money around or have their company stock trade on public exchanges to create real wealth. But, by and large, unless you intend to trade or list on a public exchange as your strategy to achieve wealth, create or make something, or own or obtain exclusive rights to something worthwhile, or be part of the process to get something made- these are the main paths to “real” wealth.

 

Neil S. Siskind, Esq., President
The Siskind Law Firm
Tel: 646.530.0006

Neil Siskind is the Founder & Chairman of The Fatherhood Assignment
Neil-Siskind-photo
Learn more at:  http://www.neil-siskind-the-fatherhood-assignment.org/

Neil Siskind is the Conservator of the Neil S. Siskind Nature Preserve
Neil-Siskind-Picture

The Neil S. Siskind Nature Preserve is over 7 acres of environmentally-pristine waterfront land in a magnificent setting along New York’s majestic Hudson River. The Preserve includes a variety of species of animal and plant life, and is a precious example of the thoughtful maintenance of New York’s priceless open spaces. The land’s uses are limited to outdoor recreation such as hiking and climbing, and the study of ecology, nature and land use. The Neil S. Siskind Nature Preserve allows for the intelligent contemplation of our valuable natural resources and the most effective ways to maximize them and keep them protected.

Neil Siskind, Founder, “National Fatherhood Day” – March 29th

Neil-Siskind-pics
To encourage recognition of the needs of boys and girls who are living without fathers or father-figures in their lives.

Read about the non-profits and charities whose missions Neil Siskind supports and promotes: www.neilsiskindsupports.com
Caring is Free®

You can read what clients and associates say about Neil Siskind at: http://siskindlawfirm.com/neil-siskind-bio/.

Neil Siskind’s Volunteer Work:

– Memorial Sloan Kettering Cancer Center, Volunteer

– Memorial Sloan Kettering Cancer Center, My Fundraiser- Help Neil Siskindhelp children with cancer to be more comfortable: http://mskcc.convio.net/site/TR?px=3182108&fr_id=2632&pg=personal

– Make-A Wish Foundation- Help Neil Siskind make sick children’s wishes come true by creating your own fundraiser: Neil-Siskind/Help-Make-A-Child-Smile.htm

– DonorsChoose.org- Donate to one of my needy public classrooms: http://www.donorschoose.org/NeilSiskindGiving

– Champion Children– We seek to inspire people through stories of children who have overcome challenges: http://siskindlawfirm.com/neil-siskind-champion-children/


Neil Siskind’s Pro Bono
 Work:

– Saving Senior Citizens- Protecting New York’s senior citizens from fraud and financial abuse www.savingseniorcitizens.com

– Senior FreeStart Business– Pro Bono: We seek to help put senior citizens in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/

– Veteran FreeStart Business– Pro Bono: We seek to help put Iraq and Afghanistan war veterans in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/

– In development: The Neil S. Siskind School of Hope: A free school to teach inner-city youths the skills of entrepreneurship and importance of economic self-sufficiency.

Neil Siskind’s Government Work:

– Suffolk County District Attorney’s Office, Boston, MA, 1994, Intern
– Office of Senator Christopher J. Dodd, Newington, CT, 1992, Intern
– Hartford County Department of Probation, Hartford, CT, 1991, Intern

Neil Siskind’s Community Assistance:

Financed & operated a legal clinic providing low-cost legal services to struggling Long Islanders during the recession to help clients resolve debt, organize finances, and launch new businesses.

Neil Siskind’s Professional Curriculum Vitae: http://neilsiskind.com/

Sponsored Advertisements

Inventors, IP Owners, Manufacturers
Learn How To Bring Products To Market And To Expand Your Distribution Channels
The Complete Guide To The Ways To Manufacture & Sell Your Products

 

 

 

Hurricane, Oil Prices, and Interest Rates

If the coming hurricane should cause gas prices to spike, this is inflationary. But, it is transitory inflation. It would be harmful to businesses and consumers, short term. The Fed should not raise rates if inflation spikes due to gas prices (or if prices spike for any hurricane related goods in hurricane areas- lumber, batteries, etc.). The 10-yr. yield should decline, if anything, in this environment as energy prices rise. Investors would not or should not shift out of the 10-yr. to capitalize on any short term inflation- unless it will be sustained.

Short and and long term rates should stay in their ranges if gas and oil prices spike in the wake of a hurricane- with the risk being that the 10-yr. yield rises if higher prices because commodities are expected to be sustained due to post-hurricane demand related to significant rebuilding, as investors move to commodities and certain consumer goods related to rebuilding. Otherwise, the 10-yr. should range from where it is today, to lower, as elevated gas prices put downward pressure on economic growth.

Be Warned: Small Business Is Dying- by NEIL SISKIND

As large companies, like Home Depot, Walmart, and Amazon grow, there are fewer and fewer retail outlets for products, except through these stores.

This means less business for manufacturers and distributors in the supply chain as they have fewer outlets in which to sell their goods.

Only manufacturers and wholesalers with the greatest scale can deliver these retailers the low prices they require in order to get shelf space.

The fewer number of retailers owning the end of the supply chain are manufacturing and selling their own private label, or proprietary products, to make things worse.

There is, increasingly, less and less room for small business in any part of the supply chain. Even big manufacturers of consumer products will have trouble as retailers- such as Amazon and Walmart- manufacture their own products.

The economy is growing- because big companies are growing- not small businesses.

Big companies are taking all of the labor- which is also helping to snuff-out small businesses (as well as wage growth).

Add to that, business review websites, like Yelp and TripAdvisor, where small businesses get decimated because of their limited resources- combined with a lack of caring local customers who seem to enjoy berating their own local businesses, leaving storefronts empty across America – and then consider all the small business support services provided by other small businesses, that are also disappearing- cleaning companies, awning services, security … and you have a toxic mix leading to the disappearance of small business from the face of the economy- forever.

 

 

Neil S. Siskind, Esq., President
The Siskind Law Firm
Tel: 646.530.0006

Neil Siskind is the Founder & Chairman of The Fatherhood Assignment
Neil-Siskind-photo
Learn more at:  http://www.neil-siskind-the-fatherhood-assignment.org/

Neil Siskind is the Conservator of the Neil S. Siskind Nature Preserve
Neil-Siskind-Picture

The Neil S. Siskind Nature Preserve is over 7 acres of environmentally-pristine waterfront land in a magnificent setting along New York’s majestic Hudson River. The Preserve includes a variety of species of animal and plant life, and is a precious example of the thoughtful maintenance of New York’s priceless open spaces. The land’s uses are limited to outdoor recreation such as hiking and climbing, and the study of ecology, nature and land use. The Neil S. Siskind Nature Preserve allows for the intelligent contemplation of our valuable natural resources and the most effective ways to maximize them and keep them protected.

Neil Siskind, Founder, “National Fatherhood Day” – March 29th

Neil-Siskind-pics
To encourage recognition of the needs of boys and girls who are living without fathers or father-figures in their lives.

Read about the non-profits and charities whose missions Neil Siskind supports and promotes: www.neilsiskindsupports.com
Caring is Free®

You can read what clients and associates say about Neil Siskind at: http://siskindlawfirm.com/neil-siskind-bio/.

Neil Siskind’s Volunteer Work:

– Memorial Sloan Kettering Cancer Center, Volunteer

– Memorial Sloan Kettering Cancer Center, My Fundraiser- Help Neil Siskindhelp children with cancer to be more comfortable: http://mskcc.convio.net/site/TR?px=3182108&fr_id=2632&pg=personal

– Make-A Wish Foundation- Help Neil Siskind make sick children’s wishes come true by creating your own fundraiser: Neil-Siskind/Help-Make-A-Child-Smile.htm

– DonorsChoose.org- Donate to one of my needy public classrooms: http://www.donorschoose.org/NeilSiskindGiving

– Champion Children– We seek to inspire people through stories of children who have overcome challenges: http://siskindlawfirm.com/neil-siskind-champion-children/


Neil Siskind’s Pro Bono
 Work:

– Saving Senior Citizens- Protecting New York’s senior citizens from fraud and financial abuse www.savingseniorcitizens.com

– Senior FreeStart Business– Pro Bono: We seek to help put senior citizens in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/

– Veteran FreeStart Business– Pro Bono: We seek to help put Iraq and Afghanistan war veterans in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/

– In development: The Neil S. Siskind School of Hope: A free school to teach inner-city youths the skills of entrepreneurship and importance of economic self-sufficiency.

Neil Siskind’s Government Work:

– Suffolk County District Attorney’s Office, Boston, MA, 1994, Intern
– Office of Senator Christopher J. Dodd, Newington, CT, 1992, Intern
– Hartford County Department of Probation, Hartford, CT, 1991, Intern

Neil Siskind’s Community Assistance:

Financed & operated a legal clinic providing low-cost legal services to struggling Long Islanders during the recession to help clients resolve debt, organize finances, and launch new businesses.

Neil Siskind’s Professional Curriculum Vitae: http://neilsiskind.com/

Sponsored Advertisements

Inventors, IP Owners, Manufacturers
Learn How To Bring Products To Market And To Expand Your Distribution Channels
The Complete Guide To The Ways To Manufacture & Sell Your Products

 

 

There Is No “Conundrum”- By NEIL SISKIND

Former Fed Chairmen Greenspan and Bernanke talked about, and still talk about a “conundrum”, where long term rates fail to follow the target Fed funds rate higher. But, there is no conundrum. Rising interest rates will cause business costs to rise, earnings to decline, and multiples to compress for those reasons, and because Treasury yields and money markets become more competitive with less risk. This would make asset values decline. It’s quite simple.

When you raise interest rates and reverse excess liquidity that has been used to fuel asset bubbles, rather than to raise incomes, of course, if you withdraw that liquidity multiples and values will compress- if not crash.

Once upon a time, business growth led to wage growth. Many factors have changed that- the size of companies in industries stomping out competition for labor, globalized work forces, and Technology so that people can shop for the same products from multiple vendors in multiple places, rather than only those within proximity of the home or office.

The economics of product sales and labor have changed. It’s that simple. Liquidity makes the big get bigger, and the cheap products get more scale and get cheaper, and labor is from all over the world (like products), and the scale that develops leaves less players in each industry, so they control wages by reducing competition for workers.

Businesses, to compete with China and other nations that lack labor rights and decent wages, explore the world to push down labor costs, not increase them, and to “scale” their customer bases to push down prices and labor costs.

If incomes are not causing growth, but, rather, liquidity is the cause of growth by allowing people with stagnant wages to buy homes at low interest rates, by providing companies the fuel to grow without raising wages, by people using cheap money to buy and sell assets that are supposed to be connected to incomes- like homes, then higher rates will not slow down the things that should cause growth- like incomes- but, rather, will deflate assets that have grown only due to liquidity being passed around by banks.

Liquidity is used for different reasons than in the past. Individuals to increase incomes, and institutions for profit, borrow cheap money to make homes into stocks and bonds and trade on them.

Higher interest rates no longer reflect growing price and income inflation- which is why bond investors won’t choose to buy stocks and commodities as interest rates rise- because there is little inflation in the prices in those places. The inflation is in the assets that have built-up from the imbalance between incomes and assets and lop-sided growth that rewards stock holders, but not labor.

 

Neil S. Siskind, Esq., President
The Siskind Law Firm
Tel: 646.530.0006

Neil Siskind is the Founder & Chairman of The Fatherhood Assignment
Neil-Siskind-photo
Learn more at:  http://www.neil-siskind-the-fatherhood-assignment.org/

Neil Siskind is the Conservator of the Neil S. Siskind Nature Preserve
Neil-Siskind-Picture

The Neil S. Siskind Nature Preserve is over 7 acres of environmentally-pristine waterfront land in a magnificent setting along New York’s majestic Hudson River. The Preserve includes a variety of species of animal and plant life, and is a precious example of the thoughtful maintenance of New York’s priceless open spaces. The land’s uses are limited to outdoor recreation such as hiking and climbing, and the study of ecology, nature and land use. The Neil S. Siskind Nature Preserve allows for the intelligent contemplation of our valuable natural resources and the most effective ways to maximize them and keep them protected.

Neil Siskind, Founder, “National Fatherhood Day” – March 29th

Neil-Siskind-pics
To encourage recognition of the needs of boys and girls who are living without fathers or father-figures in their lives.

Read about the non-profits and charities whose missions Neil Siskind supports and promotes: www.neilsiskindsupports.com
Caring is Free®

You can read what clients and associates say about Neil Siskind at: http://siskindlawfirm.com/neil-siskind-bio/.

Neil Siskind’s Volunteer Work:

– Memorial Sloan Kettering Cancer Center, Volunteer

– Memorial Sloan Kettering Cancer Center, My Fundraiser- Help Neil Siskindhelp children with cancer to be more comfortable: http://mskcc.convio.net/site/TR?px=3182108&fr_id=2632&pg=personal

– Make-A Wish Foundation- Help Neil Siskind make sick children’s wishes come true by creating your own fundraiser: Neil-Siskind/Help-Make-A-Child-Smile.htm

– DonorsChoose.org- Donate to one of my needy public classrooms: http://www.donorschoose.org/NeilSiskindGiving

– Champion Children– We seek to inspire people through stories of children who have overcome challenges: http://siskindlawfirm.com/neil-siskind-champion-children/


Neil Siskind’s Pro Bono
 Work:

– Saving Senior Citizens- Protecting New York’s senior citizens from fraud and financial abuse www.savingseniorcitizens.com

– Senior FreeStart Business– Pro Bono: We seek to help put senior citizens in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/

– Veteran FreeStart Business– Pro Bono: We seek to help put Iraq and Afghanistan war veterans in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/

– In development: The Neil S. Siskind School of Hope: A free school to teach inner-city youths the skills of entrepreneurship and importance of economic self-sufficiency.

Neil Siskind’s Government Work:

– Suffolk County District Attorney’s Office, Boston, MA, 1994, Intern
– Office of Senator Christopher J. Dodd, Newington, CT, 1992, Intern
– Hartford County Department of Probation, Hartford, CT, 1991, Intern

Neil Siskind’s Community Assistance:

Financed & operated a legal clinic providing low-cost legal services to struggling Long Islanders during the recession to help clients resolve debt, organize finances, and launch new businesses.

Neil Siskind’s Professional Curriculum Vitae: http://neilsiskind.com/

Sponsored Advertisements

Inventors, IP Owners, Manufacturers
Learn How To Bring Products To Market And To Expand Your Distribution Channels
The Complete Guide To The Ways To Manufacture & Sell Your Products

 

GDP Includes Government Spending

Whether its the U.S. or China, or anywhere- the more government spends (or wastes or is obligated to spend), the higher the GDP.

When the government borrows to spend, raising the national debt and increasing interest long term rates- then higher GDP can be bad news.

 

 

 

Neil S. Siskind, Esq., President
The Siskind Law Firm
Tel: 646.530.0006

Neil Siskind is the Founder & Chairman of The Fatherhood Assignment
Neil-Siskind-photo
Learn more at:  http://www.neil-siskind-the-fatherhood-assignment.org/

Neil Siskind is the Conservator of the Neil S. Siskind Nature Preserve
Neil-Siskind-Picture

The Neil S. Siskind Nature Preserve is over 7 acres of environmentally-pristine waterfront land in a magnificent setting along New York’s majestic Hudson River. The Preserve includes a variety of species of animal and plant life, and is a precious example of the thoughtful maintenance of New York’s priceless open spaces. The land’s uses are limited to outdoor recreation such as hiking and climbing, and the study of ecology, nature and land use. The Neil S. Siskind Nature Preserve allows for the intelligent contemplation of our valuable natural resources and the most effective ways to maximize them and keep them protected.

Neil Siskind, Founder, “National Fatherhood Day” – March 29th

Neil-Siskind-pics
To encourage recognition of the needs of boys and girls who are living without fathers or father-figures in their lives.

Read about the non-profits and charities whose missions Neil Siskind supports and promotes: www.neilsiskindsupports.com
Caring is Free®

You can read what clients and associates say about Neil Siskind at: http://siskindlawfirm.com/neil-siskind-bio/.

Neil Siskind’s Volunteer Work:

– Memorial Sloan Kettering Cancer Center, Volunteer

– Memorial Sloan Kettering Cancer Center, My Fundraiser- Help Neil Siskindhelp children with cancer to be more comfortable: http://mskcc.convio.net/site/TR?px=3182108&fr_id=2632&pg=personal

– Make-A Wish Foundation- Help Neil Siskind make sick children’s wishes come true by creating your own fundraiser: Neil-Siskind/Help-Make-A-Child-Smile.htm

– DonorsChoose.org- Donate to one of my needy public classrooms: http://www.donorschoose.org/NeilSiskindGiving

– Champion Children– We seek to inspire people through stories of children who have overcome challenges: http://siskindlawfirm.com/neil-siskind-champion-children/


Neil Siskind’s Pro Bono
 Work:

– Saving Senior Citizens- Protecting New York’s senior citizens from fraud and financial abuse www.savingseniorcitizens.com

– Senior FreeStart Business– Pro Bono: We seek to help put senior citizens in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/

– Veteran FreeStart Business– Pro Bono: We seek to help put Iraq and Afghanistan war veterans in the right direction so that they can face the challenges of the modern economy: http://siskindlawfirm.com/free-start-business/

– In development: The Neil S. Siskind School of Hope: A free school to teach inner-city youths the skills of entrepreneurship and importance of economic self-sufficiency.

Neil Siskind’s Government Work:

– Suffolk County District Attorney’s Office, Boston, MA, 1994, Intern
– Office of Senator Christopher J. Dodd, Newington, CT, 1992, Intern
– Hartford County Department of Probation, Hartford, CT, 1991, Intern

Neil Siskind’s Community Assistance:

Financed & operated a legal clinic providing low-cost legal services to struggling Long Islanders during the recession to help clients resolve debt, organize finances, and launch new businesses.

Neil Siskind’s Professional Curriculum Vitae: http://neilsiskind.com/

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The Wage Trap- By NEIL SISKIND

As interest rates rise, and perhaps, oil and gas prices rise, if incomes don’t rise, consumer spending and business earnings will decline. GDP will decline and we could head for recession.

On the other hand, if wages rise while interest rates on businesses rise, business margins will decline due to the higher debt and labor costs, earnings will decline, and the Fed will raise rates even higher due to wage inflation- which will hurt consumers and businesses.

Oh, boy.

The Flattening Yield Curve: It’s “Not” Different This Time- By NEIL SISKIND

Here is a link to a 2006 Ben Bernanke speech suggesting that a flat or inverted yield curve may “be different this time” Bernanke Yield Curve Speech. This speech could have been delivered yesterday. We’re in the exact same scenario- solid GDP growth, low inflation, and a flattening yield curve. Then-Chairman Bernanke makes the argument that a lower term premium due to strong demand for longer term obligations (accompanied by the government’s and lenders’/investors’ expectations of low inflation and low interest rates in the future), caused by factors besides lenders’/investors’ expectations of slowing growth or recession[1], may be the cause of the yield curve’s flattening (the 10-yr. Treasury bond rate falling, as the 2-yr. Treasury rate rises)- as opposed to strong demand for the 10-yr. bond due to lenders’ expectations of both low inflation and a slowdown or recession. He also suggested that a global savings glut may be putting downward pressure on yields and was an additional reason to not fear a flattening or inversion as indicators of a forthcoming recession.

Any “it’s different this time” line of commentary about the yield curve is concerning[2], and, at least with regard to inversion, has usually (or always) proved to be wrong. How did 2007 turn-out, subsequent to this Bernanke speech? This economy is shaping up to be much like the 2005-2007 economy.

A business (and inflation) cycle is supposed to be: Demand growth from low interest rates, then job growth, then wage growth, then more demand growth, then prices rise, then interest rates rise and things cool down; and “not”: Liquidity rises, asset speculation rises, big companies use cheap money to get larger and larger and steal all the market share in their respective categories and put small businesses out of business- and kill the Phillips curve by controlling labor markets, wages stay stagnant (for consumers, who make up about 70% of GDP), gas prices rise because of the sheer volume of people working (with stagnant wages), houses become unaffordable due to excessive liquidity (including due to investors buying homes to rent out), debt grows because wages are stagnant, interest rates rise, even with little or no wage inflation (largely, to control asset bubbles), to exacerbate the problem, layoffs begin, due to oil and interest rates hitting businesses’s margins (with no ability by businesses to pass-through the costs to consumers, because of their stagnant wages), asset values drop, due to consumer debt overload, and the economy enters a deep recession or a near-depression requiring a government bailout. This latter scenario was what led-up to 2007 and 2008- results that could be repeated in 2019[3] (significant capex could push this out- though capex will most likely be used for buying and developing software programs and technologies that create and increase automation of internal business processes and the delivery of consumer services, and reduce needs for human labor).[4]

We actually have had significant inflation for quite some time. Home prices are out of joint in relation to incomes and affordability- just as in 2005-2007. This is exactly the danger of inflation to a society- basic necessities, like shelter, becoming too costly. The yield curve may be speaking to this[5]. Investors may believe that “it is exactly the same” this time.

Fed governors recently saying that U.S. bonds are now safe havens for foreign (and domestic) capital as emerging market (EM) volatility runs its course, and, therefore, the flattening curve is “different this time” is perplexing. Of course U.S. bonds are safe havens- that’s the point of bonds. The fleeing to them reflects investor sentiment about growth and inflation, and affects the curve. How is that any different than any other reason to buy bonds (beyond portfolio diversification)? The whole world is concerned about the whole world- so they buy U.S. bonds. It’s a signal. Otherwise foreign (and domestic) capital would go into U.S. stocks, rather than bonds and the dollar. Despite quantitative tightening and ever-increasing Treasury auctions- the curve is still flattening. Think about that. That is a lot of risk-off investment. That is a lot of fear. Fed governors should be cautious about dismissing this situation as merely transitory- or as irrelevant to the domestic economy. It’s a reflection of commercial and non-commercial investors’ sentiments about their own respective economies- which may be U.S. export customers. It also, of course, reflects investors’ expectations and fears about the U.S. economy, itself, and confidence that yields likely won’t significantly rise. Moreover, if the yield curve (or yield curves) inverts, for any reason, credit markets can seize-up. Finally, if international capital flows are, primarily, into shorter term Treasuries, then concerns by overseas investors about EM volatility would not be the cause of curve-flattening.

Keep the following facts and data points in mind when assessing the shape of today’s curve:

  • The unemployment rate in October, 2006, was 4.4%- so, not much higher than today. Interest rates were rising, debt was accumulating, gas prices were elevated, housing prices were high, most inflation indicators were tame, wages were stagnant, the yield curve was flat, and analysts saw no end to growth in sight. Sound familiar? (And there was no trade war, as we have today.)
  • Some days, the S&P is up only because oil and gas prices (i.e. energy stocks) are higher. Good for investors- bad for consumers.
  • Real wage growth is lower when you factor in other inflation.
  • Company earnings we see are for public companies. What about private businesses? What about their earnings? Home Depot and Amazon grow- while independent (and even chain) hardware stores and book stores across America close.
  • Emerging markets are experiencing economic weakness and growing currency crises.
  • Tariffs may lead to higher prices for consumers, while wages are stagnant and interest rates are rising.
  • Global trade is slowing.
  • Housing affordability in America is at its worst in nearly a decade.
  • As housing slows, or crashes, from rising rates meeting stagnant wages, it, necessarily, means that construction jobs will decline.
  • The worse single day point drop in Dow Jones Industrial Average history was this year- February 5, 2018. (It’s noteworthy, I think, that I published my article “The Yield Curve Speaketh: Why Stocks Might Crash In Early 2018” less than 60 days earlier.)
  • 2018 second quarter GDP grew by 4.2%- but U.S. consumer debt rose in May, 2018, by the most in six months. Of course, the national debt keeps growing, too. Spending is easy- paying the bill is harder.

______________________

fn

  1. In Bernanke’s 2006 speech, he discussed that more stable inflation, better-anchored inflation expectations, lower economic volatility, and a variety of other potential culprits that do not include investors’ expectations of slowing or negative economic growth, may be responsible for demand for longer term securities and the lower term premium that could be the reason for the flattening curve- an argument that is being reiterated- or recycled- by Fed Chairman Powell, some Federal Reserve governors, Goldman Sachs, and some analysts and portfolio managers, today.
  2. To suggest that curve flattening or inversion is an effect of a term premium that is reduced due to strong investor demand based on anything other than expectations of slow or negative growth (such as only being based on the government’s and investors’ better-anchored-inflation expectations, reduction in economic volatility, or pension fund needs) and, therefore, not predictive of recession, may be risky. In any event, studies show that if certain curves invert (the 10-yr.-3-month or the 10-yr.-2yr.), it is predictive of recession no matter what the cause of the lower term premium (most likely because an inversion, for any reason, impedes banks extending credit). Likewise goes for any dismissal of an inversion as being due to a global savings glut or a decline in the natural interest rate; such alternative explanations are fraught with perils if investors are, in fact, buying bonds with the expectations or fears of slowing growth, and policy fails to acknowledge and address such.
  3. A flattening or flat yield curve (as opposed to an inverted curve) does not, necessarily, portend recession. But, it is the overall and totality of circumstances (high corporate debt levels, a rising target Fed funds rate, rising consumer debt, elevated asset and gas prices, stagnant wages, a growing national debt, etc.), and the similarities of today’s economy to the 2005-2007 period, that make a flattening curve feel like a precursor to an inversion, and, ultimately, recession (of equal magnitude to the one that began in 2007 and 2008).
  4. A flattening or flat curve is hardly a guaranty of recession in a year. An inverted curve may not even indicate a recession in anything less than 12 months. But, a recession need not be presaged by an inverted yield curve (though it most always is). Many problematic cyclical and/or structural problems, or a significant political or financial crisis, or exponentially growing Treasury sales on the longer ends of the curve to fund the growing national debt and deficit (which could affect the term premium) in the face of a slowing economy and declining GDP, could lead to recession without a preceding curve inversion.
  5. Commercial and non-commercial investors have no dearth of reasons to be moving capital into the U.S. bond market, especially where U.S. inflation is tame, including excessive housing prices in the U.S. as interest rates rise and wages stagnate, EM weakness and challenges to growth due to Fed tightening and tariffs, risks to EM lenders and to EM investors from such conditions, and the risk of contagion to the U.S. economy.

________________

endnote

To determine (or speculate on) the reason for the shape of a yield curve (or for the change of the shape of a yield curve), one must first determine the cause of the shape (or the cause for the change of the shape) of that curve. For example, in the case of an inversion, in order to determine the reason for the inversion, one would need to know if the inversion is caused by Fed rate hikes or, rather, due to excessive buying of the 10-yr. bond- or by both.

________________

 

Here’s a little poem I wrote:

If the the 10-yr.-3-month curve inverts,
or if the 10-yr.-2yr. curve inverts,
patient shorts will prove the warts-
and longs will lose their shirts.

 

About the Writer

Neil Siskind is: President of The Siskind Law Firm, focused on product investments, trademark licensing, product distribution, and real estate; Founder & Chairman of The Fatherhood Assignment™, a think tank and advocate for children with absentee fathers; Founder of the global charity marketing initiative, Caring is Free®; Founder of National Fatherhood Day™; Owner & Conservator of The Neil S. Siskind Nature Preserve, over 8 acres of conserved waterfront land along New York’s majestic Hudson River; and author of The Complete Guide To The Ways To Manufacture & Sell Your Products.On December 11, 2017, in his article The Yield Curve Speaketh: Why Stocks Might Crash in Early 2018, Neil Siskind successfully predicted the February, 2018 stock market crash, the largest single-day point drop in the Dow Jones Industrial Average’s history. If you are in need of office space in South Florida, contact Neil Siskind about space availability at The Siskind Executive Office Complex in Boca Raton, FL.

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