Fed Speak Today- Why Hike?- By NEIL SISKIND

The Fed made it plain today that they adhere to the dual mandate, and even as inflation is barely 2%, labor markets are tight. So, instead of letting wages and the consumer get any stronger, they want to increase business debt costs- while hoping for lower revenues. Further, they also want to increase consumers’ debt costs- but not their wages. All this while stocks and housing are crashing- and while tariffs may send business and consumer costs higher- and while making clear they have no concern over debt and asset bubbles- they just want wages in check, no matter what.

Interest rate hikes should not prevent wages from rising “at all”. Incomes in America are allowed to rise, I think.

 

China & The G20: Some People Are Way-Underestimating Trump’s Ambition- By NEIL SISKIND

People who are hoping for, or contemplating, or expecting a U.S. trade deal with China at the upcoming G20 (or anytime soon thereafter) are really not paying attention. They are caught-up in how the NAFTA-USMCA process went, and they are caught up in President Trump’s own language and bravado about his negotiating skills.

The U.S.-China situation is different than any other deal or circumstance.

Donald Trump didn’t become president just so that he could tweak some trade deals, pass some tax cuts, and then head home. Trump- like any other man- perhaps more than many other men- wants to effect change. He wants to have a real and valuable impact on history- like any president does. In Trump’s case, it’s a valuable impact on American history that he desires, more so than on world history (though the former, necessarily, causes the latter).

President Trump will not be content to just return to his apartment on Fifth Avenue in a few years and go back to yelling at CNN through his television screen as he drinks champagne cocktails and imagines the kind of country in which he wished he lived. This is his chance to make America the way he wants it. No man- and certainly not Donald Trump- would squander that opportunity.

The Trump-Bannon doctrine in relation to China is that it’s east vs. west, and us vs. them. This is a battle over who will control the world in the 21st century.

So, what does President Trump want?

President Trump wants a strong economy. But, more than that, he wants a great legacy. He wants to be the man who made America great (again). Going long of Donald Trump’s ego is a trade on which one will never lose money.

President Trump wants power and influence over North Korea and that valuable real estate (for America, not for himself), he wants to limit China’s economic and political colonization of countries in Asia and Africa, he wants fair and honest environmental, labor, and Intellectual Property laws and practices in China, and he wants a China that plays by the same rules as the rest of us. Trump wants China’s mercantilism, with it’s negative effect on U.S. labor, and China’s use of it to grow into a world power at our expense, to end; and he wants U.S. companies and investors to have the same access to China’s markets and assets as Chinese companies and investors have had in the United States.

The Trump administration is looking more and more like the Reagan administration, with many of the same Republican players, a creation of the media at the helm, low taxes, big deficits, a cold war environment with some occasional military chest-thumping, a peace through strength attitude, and a determination to defeat communism and totalitarianism and restore America to its glory as the world’s leader, in all respects. President Trump, with regard to China, is mirroring and attempting to emulate President Reagan in how he successfully pushed the Soviet Union to the brink by forcing it to spend itself into submission, while growing the U.S. economy as large as possible. Reagan wasn’t looking to sell the Soviets more products- he was looking to remove the Soviet Union as a threat to U.S. values, and security, and power. Why would you think that President Trump wants anything less?

There will be no trade deal (though the new tariffs scheduled to take effect in the new year could be temporarily delayed, pending a resolution). Steve Bannon and Jack Ma probably have it right when they suggest that we are at the beginning of a generational conflict without clearly delineated battle or finish lines, or time frames. As tensions rise between the U.S. and China in the South China Sea, over Taiwan, over North Korea, and in the global economy, the trade dispute is but a mere symptom of (and, perhaps, a mere red herring for) a growing U.S.-China power struggle for world dominance- and President Trump isn’t going to settle for anything less than a total win (or, at least, the establishment of a clear path for future victory)- which will require China to change its economic and legal structures, its behaviors, beliefs, strategies, and even its ambitions and time frames.

President Trump’s message to President Xi:

Mr. Xi: Tear-down-this-Chinese-wall!

 

 

________________________

endnotes

  1. China’s most recent PMI report was in-line with expectations. It was, actually, very likely, much lower than forecast, but revised higher by the Chinese government. China is, no doubt, loath to arrive at this G20 and negotiations with President Trump appearing to be in any more of a desperate condition than has already been made known.
  2. China will never cave to one demand of the United States, in particular: That China not provide subsidies to its state-owned enterprises. This practice goes to the essence and to the very core of China’s modus operandi.
  3. Any “framework” or agreement to talk further that comes out of the G20 meeting between the U.S. and China would not be helpful to markets, as such a vague result will not allow companies to properly plan-out their manufacturing businesses or allow non-manufacturers to have complete visibility into their future operations costs. Markets and businesses need some level of certainty, and a mere “framework” for further talks will not provide that.
  4. Update: As I expected, no trade agreement was reached at the G20 meeting between Presidents Trump and Jinping. President Trump’s decision to delay implementation of the new tariffs, with very little quid pro quo from China for his forbearance, is an indication that Trump is very concerned about the potential economic impacts of tariffs as the U.S. economy is slowing. Whether President Trump will see-through his plan for new tariffs remains to be seen- in about 90 days. Regardless, no trade deal with China will ever be made containing anything less than all, or most, of the Trump administration’s demands- a deal that China is highly unlikely to do. Whether the new tariffs are levied or not when it becomes clear that no trade agreement is possible, the relationship between the two nations will deteriorate from there. There are many other legal measures beyond the levying of tariffs that the U.S. can take to interfere with and challenge China’s global activities, and there are many other ways for the U.S. and China to clash in and around the world.

 

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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What Analysts Are Missing About The Economy- By NEIL SISKIND

Analysts are used to a business cycle ending with growing demand chasing less resources (i.e. inflation) resulting in higher interest rates, and, thus, slower growth or even recession.

Some analysts fear this process is in place, but will take a year or so to play out, provided that the Fed does not go too far, too fast.

Other analysts see no recession coming soon, or any significant slowdown at all in the near future, because their training and experience leaves them with a void in thinking. Inflation is not persistent and wages and prices (tariffs aside) may not create upward pressures enough to push the Fed onward and upward.

What these latter analysts fail to realize is that, even though GDP and earnings outlooks are solid, and inflation is low, the Fed has already made a significant dent and doesn’t need to go much higher in order to induce a slowdown. But, this an opinion; this is my opinion versus theirs’. So, let’s talk facts. On a factual basis, these analysts fail to recognize that price and/or wage inflation, or even “significant” rate hikes, do not need to occur before a slowdown can occur. In modern economies, where liquidity drives asset growth, such as trading of houses as assets, and companies use profits and debt to buy back stock instead of raising wages and creating more consumer demand, and companies use debt for acquisitions and to fund loss-leaders to gain scale- instead of for capex, any notable withdrawal of liquidity- such as we have already seen- even if such withdrawal eventually ceases (if the Fed stops hiking), is enough to sink an economy built on debt- as opposed to one that is built upon demand from growing wages, stronger consumers, and resulting higher prices by businesses with pricing power, and then higher interest rates. It just does’t work this way anymore.

Where, in the past, the withdrawal of liquidity can slow wages and prices, in the modern economy, which is a structurally weak economy, rising interest rates and removals of liquidity have a faster and deeper affect on the economy than a mere slowing of prices and wages would. Asset values and risk capital can immediately disappear as cash and bonds offer less risk with near equal returns, and as corporate and consumer debt from previously low rates and high liquidity can’t be paid back as easily, and as risk capital fast disappears because investors are not willing to buy corporate loan and debt instruments.

This is exactly what happened in 2007 and 2008. Risk capital became more costly and everyone ran for the exits on assets- because that’s where the capital flowed to.

This is why the yield curve is flattening again as the Fed remains hawkish. The yield curve is flattening because many investors believe that we are about to slow down … significantly, because liquidity is being withdrawn

The Fed has been targeting asset prices and financial instability, not wage and price growth- because there isn’t any. The Fed is getting what it wants- but it may regret what it wished for.

So, let’s talk tariffs. Higher interest rates can’t get prices lower if those higher prices are based on tariffs, rather than on demand and higher wages. So, if new tariffs are implemented, companies will earn less, or consumers will pay more, and/or demand will decline (which means companies will earn less). The Fed can’t help maintain price stability if the tariffs take hold because it’s a policy issue, not a demand issue; so, if the Fed pushes rates higher due to price inflation on consumers from tariffs, it sure would do us a world of hurt.

 

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

 

 

 

Lies In The Media About Snapchat 

Snap, like Twitter, has spent less time and resources to get more and more users, and has decided to make more money from existing customers- like any other smart business would do.

Unlike the claims in the fake news from the financial media, Snap isn’t trying to get more revenues from customers because they have lost customers. Snap has chosen to have less customers and make more money … instead of being like Facebook and just growing users and fake accounts and bad actors on its platform just so it can say it is growing- and then sell advertisers on fake or questionable data.

Gee- they’re actually trying to run a clean, profitable, honest business … what do ya know …?

Is The Fed Really Fighting Inflation? Probably Not – By NEIL SISKIND

Isn’t the credit/lending bubble what the Fed is really fighting here?

The inflation concern due to low unemployment is just a red herring to prevent panic based on the truth- financial instability and bad loans. This is what is causing conflicts within the FOMC between hawks and doves and the confusion in markets about why the Fed is hiking so much with little inflation in sight? Higher wages is not wage “inflation”- in a pejorative sense. It’s o.k. for wages to rise modestly. If you can borrow money at 1% or 2% and lend to a company or for a real estate development at 7% or 8% … or in the case of consumer loans, at 12% or 14% … it’s worth the risk, and what the Fed is really scared about … as it should be, since this is what Greenspan and Bernanke missed … too many bad loans and risky behaviors. Easily-achieved yield spreads is probably why this time stocks are leading credit downward, where it is usually the opposite. The credit side is so easy to play at zero/low rates; borrow short- lend long.  It’s easier to borrow money at 2% and lend it out at 7% (especially if it’s secured, and particularly if it’s secured at a low LTV) then it is to borrow money and create equity, or make successful capital investments; seemingly, this is how investors have been seeing it … and the Fed has had enough of it. The Fed isn’t against rising prices and wages within a fair range … it’s called economic growth. What the Fed fears are unadvised loans on bad assets or to weak borrowers, and bad equity investments, all encouraged by irresistibly cheap money- with the ultimate fear, of course, being systemic risk. Credit and lending risks lead to asset bubble risks.

Watch the yield curve. It will invert in 2019- and the only thing that will cause it to re-steepen is not growth prospects- it will be the growing deficit as tax revenues decline … and then your tax rates may rise.

 

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

 

 

 

The Economy: Are We Simply Getting Back to Normal, Ethical, Smart Behaviors?- By NEIL SISKIND

We should never have been sending sensitive technology vital to our economy to China; we should never have been sending our jobs to China; we should never have been doing business with a country destroying the environment, providing no worker laws or protections, paying workers a mere pittance to work long hours in hot factories, and depressing religious freedoms and free speech.

Let’s get back to a normal manner of operating a developed and civilized society. We’ll have to pay more for towels and televisions and pay workers more for a days work … oh well.

We’ll also see some price and wage growth, which means less liquidity-driven bubbles from low rates due to a Fed mistakenly focusing on inflation, instead of financial dislocation, due to fake growth.

 

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

 

 

 

Are Snap’s Spectacles The Future For Developing Online Content?- By NEIL SISKIND

The Spectacles product has not generated a lot of buzz. Sales in the past have been very weak. Yet, Snap continues to invest in and grow this product. Why?

It’s likely due to the convergence of 6 factors:

  1. Live programming being a vital aspect of online entertainment going forward;
  2. reality TV being a large part of the entertainment landscape;
  3. Snap and other companies desire to create original content;
  4. unique technology with IP protection to prevent competitors from knocking-off ideas;
  5. desire of consumers to always be Internet enabled and online; and
  6. hands-free Internet and technology use

Users can use Spectacles to video their lives and activities in real time in a hands-free way, while on the move, and have viewers watch it on that person’s Snapchat feed. This can be done for fun, for entertainment, or to build a brand as a personality and an influencer to engage in commerce through advertising or product sales. Users can also chat live in real time with other users as each broadcasts their respective real-time activities to each other’s Snapchat feed’s while mobile. So, it’s like hands-free Facetime, and it can involve multiple users at once (i.e hands-free, mobile group chats).

People with ambitions of producing and creating more sophisticated real time reality or even fictional content can also do so using their Spectacles.

If you strip away all the other services that Snap provides and for which it has become known, the Spectacles business of creating unique and original content, live and hands- free, for consumption over Snapchat, could, in and of itself, be a huge entertainment and communication business. If it catches on and many users want to create their own TV channel to broadcast their activities and lives “live”, it could be a big standalone business, or the IP and service could be acquired by a larger communications, entertainment, or even retail business that wishes to tap into the live entertainment genre for advertising, sales, product placements, reaching audiences in real time, etc.

Perhaps, best of all, the IP and patented product can’t be easily knocked-off by Instagram or any other company, which, as of now, have no hands-free way to stream content live to their websites. Even if a company develops its own version of wearable cameras, it would not change the fact that Snapchat’s content, using its own cameras, would be original content. Plus, Snap is already ahead of the pack in this process … and we all know how important the first mover advantage is in tech.

If Snap has become resigned that it needs to create defendable IP through unique products and original content in order to succeed in the media space, Spectacles could be the answer to both of those missions.

Now- these are “my” assessments of Spectacles. Snap, itself, will explain that Spectacles will help enhance offline environments with AR to create a more entertaining experience- with more purposeful uses, beyond entertainment, in the future.

So- there are lots of good reasons and uses for Spectacles.

 

 

Here’s What’s Happening In Stocks- By NEIL SISKIND

Years ago, American workers, unwittingly, exchanged wage growth for lower product prices from China. If prices rise, companies will eat the costs and have less profit, or pass them through to customers- requiring higher wages, or else it will cause demand destruction. Companies can’t afford to have lower profits from eating costs, or from raising wages. They have too much debt. They want the lower prices, and the stagnant wages, and the lower interest rates- but those parties are over, leaving a red sea behind. Crashes always come down to excess debt.

One investment strategy now is to find companies with little debt, ones that can, thus, withstand margin compression, and that have low historical P/E ratios due to recent stock declines.