Business and investment decisions throughout 2019 have been, and continue to be, hindered, halted, and held-off, as companies and investors are chronically holding our collective breath, awaiting the outcome of one political, legal, and economic issue after the next, with each such event providing an excuse to exercise caution with capital.
While trade policy uncertainty between the U.S. and China has been, and remains as the main disincentive to businesses deploying capital, and the primary culprit of investors’ lack of visibility into future earnings, plenty of other issues, from the Fed’s changing positions, to Trump’s legal problems, to an unexpectedly tight labor market, have been disruptive to business certainty and the making of long-term commitments, and to investor clarity and confidence.
Here’s a list of issues and events that have defined and continue to define the 2019 “holding our breath” economy:
- Holding our breath as we’re waiting to see if there will be a U.S.-China trade deal, or, instead, if there will be more tariffs and more agitation of the U.S.-China relationship
- Holding our breath as we’re waiting to see if there will be a Brexit deal
- Holding our breath as we’re waiting to see if the Phillips curve still works
- Holding our breath as we’re waiting to see if China’s stimuli helps it to re-inflate
- Holding our breath as we’re waiting to see if China’s re-inflation will spillover to its surrounding Asian emerging markets
- Holding our breath as we’re waiting to see if the Mueller report proves either collusion or obstruction
- Holding our breath as we’re waiting to see if the late-cycle tax cuts prove to be a savior, or a budget-buster
- Holding our breath as we’re waiting to see if significant capex occurs to stimulate the economy, and whether it will trickle down into rising wages and lead to a protracted economic expansion
- Holding our breath as we’re waiting to see where the Fed determines the neutral rate to be
- Holding our breath as we’re waiting to see whether disinflation and deflation are transitory
- Holding our breath as we’re waiting to see if the yield curve inverts
- Holding our breath as we’re waiting to see if a curve inversion is due to low rates on govies in external economies worldwide, thus, attracting capital to the U.S., or because of domestic growth concerns (i.e., is it different this time, or not?)
- Holding our breath as we’re trying to determine if quantitative easing is still causing yields to be artificially low, or if quantitative tightening has pushed them artificially high, such that the 10-yr. Treasury yield would have sunk lower, sooner, without quantitative tightening helping to fight-off an earlier inversion
- Holding our breath as we’re waiting to see if Chairman Powell is feeling hawkish or dovish at any given FOMC meeting
- Holding our breath as we’re waiting to see if Chairman Powell will capitulate to President Trump’s attempts to goad him into cutting the Fed’s target federal funds rate- or if he will do the opposite, to prove the Fed’s independence
- Holding our breath as we’re waiting to hear and see what Mario Draghi will say and do next
- Holding our breath as we’re waiting to see if the USMCA is ratified
- Holding our breath as we’re waiting to see if there will be tariffs on products imported from Mexico
- Holding our breath as we’re waiting to see if there will be more divergence, or, instead, convergence
- Holding our breath as we’re waiting to see if convergence will be through world economies strengthening- or by our economy getting weaker
- Holding our breath as we’re waiting to see if the dollar will weaken
- Holding our breath as we’re waiting to see if the stock market is right to rise, or Treasury yields are right to sink- which has it right?
- And, finally, holding our breath waiting for the next Trump tweet to be teed-up and tweeted-out, with the potential to send our respective industries or stock investments into a tailspin
- Oh- and my favorite one: Holding our breath as we’re waiting to see if investment grade and (supposed to be) high yield corporate bonds with concernedly-narrow spreads, and leveraged loans, and CLOs, and shadow banking loans (which encompass many loan types and structures), are safe and sound credit investments- or if lower for longer interest rates and negative yields around the world are traps for irrational yield-hunting in the U.S., causing credit and debt bubbles and capital misallocations that will destabilize the U.S. economy due to rampant panic selling, and/or a liquidity crunch, and/or obligor defaults, upon a slowdown of growth
Warning: Studies show that chronic breath-holding can have negative effects on a person’s physical functionality- in addition to causing potentially deleterious effects to his or her long-term mental capacity.
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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 9 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 accurately predicted the February, 2018 stock crash, the largest single-day point drop in the Dow Jones Industrial Average’s history. All the stock indices are down approximately 6% for 2018. In his September 26, 2018 article, Lots of “Bull” In The Bull Market: Let’s Look At What’s “Really” Growing, Neil Siskind explained that, despite Wall Street’s bullishness, the economic data and stock market underpinnings were in decline, and the economy and stocks were at imminent risk. By the closing of markets on October 23, 2018, the S&P 500 had fallen approximately 7%, with October being the S&P’s worst month since August 2015 (and December being the S&P’s worst month ever), the Nasdaq continues to have its worst month since 2016, and is down approximately 8% from article publication, and the DJIA is having its worst monthly performance since 2008. In 2018, Neil Siskind coined the phrase “synchronized global slowth™” (or “synchronous slowth™”) to describe the occurrence or condition of multiple emerging market and developed market economies commencing a downward trajectory of economic and GDP growth, or actually contracting to a point of slow, stagnant, or negative economic and GDP growth, at simultaneous, or nearly simultaneous times, largely, or, at least in part, due to rising interest rates and/or stricter lending regulations (such as higher bank reserve requirement ratios and stricter bank balance sheet requirements) in the larger, more developed or fully developed economies, such as the United States and China, resulting in diminished liquidity in those economies, and, thus, diminished liquidity in smaller, or emerging economies, in turn. 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.
Other Recent Articles by Neil S. Siskind:
Neil S. Siskind, Esq., President
The Siskind Law Firm
Neil Siskind is the Founder & Chairman of The Fatherhood Assignment
Learn more at: http://www.neil-siskind-the-fatherhood-assignment.org/
Neil Siskind is the Conservator of the Neil S. Siskind Nature Preserve
The Neil S. Siskind Nature Preserve is over 8 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
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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