A Tariff Thought …

What if we get higher prices … inflation … because of tariffs? But, what if we also get wage growth … inflation … due to tariffs because domestic manufacturers can now compete with imports?

Would you take higher prices for higher wages?

Would you take higher prices and higher wages, and more consumer spending, and higher interest rates to get GDP growth?

It depends where inflation “really” is now. If it’s truly stubbornly low, maybe tariffs are not so bad. If it’s “really” rising, tariffs would be largely bad, but if they get wages higher … maybe not the worst thing in the world.

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HomeBuilders Are Short On Labor- Thank God- By NEIL SISKIND

Late in real estate cycles, as liquidity has driven buying and speculation, builders continue to build with hopes that things will continue a little longer, and to take advantage of interest rates while they are still low. This leads to speculation, overbuilding, and crashes. This hurts their own businesses and hurts individual owners as supply grows in response to “liquidity-driven” demand.

Homebuilders are having difficulty finding labor as labor markets tighten and unemployment is very low. This is crimping further building. This keeps supplies in check, and protects existing values.

As interest rates rise, which will hurt values, tight labor markets may be a blessing for us all.

The Fed- With Subtitles For The “Fed-Speak”- By NEIL SISKIND

Inflation is still below or barely at the Fed’s target rate. The Fed admitted during Tuesday’s press conference that wages are stuck and it doesn’t know exactly why. Yet- the Fed is determined to keep raising interest rates and engage in the reversal of quantitative easing.

Chairman Powell repeatedly stated during the press conference that the Fed’s job- or its mandate- is to attain maximum employment and price stability (and stability of the financial system).

Don’t we have this?

The Fed, and all of us, have been waiting for so long for the economy to have some inflation- now it’s just about here … and the Fed threatens to keep tightening to prevent it … to nip it in the bud … while wages (the biggest threat to growing inflation) are showing almost no inflation? The 10 yr. Treasury and the yield curve don’t evidence any inflation expectation. So why keep raising its target rate while also showing no intent to stop quantitative tightening?

It’s because the Fed is targeting housing. This is the price instability of which it is concerned. There is no other price instability- and there is no undue inflation. I think the Fed is secretly worried about home prices. Why? because they never mention them! A whole hour-long press conference on Tuesday and not one word about home prices- not a word, not even a syllable about home prices, even as incomes stagnate, and even though consumers’ homes are their most valuable assets, the assets for which mis-pricing earlier this century was the singular cause of a near-depression. Yet- the Fed says nothing.

The Fed should be data-driven at this stage, and should state such. But, instead, it, blindly, promises to keep raising its target rate and continue with quantitative tightening, and does not even pretend to be strictly data-driven. This is because of housing, its excesses, and its disconnect from incomes and values.

China has been raising interest rates, explicitly, due to real estate speculation and excessive leverage created by a shadow banking industry, while the Fed says nothing about our housing markets- yet people can’t find affordable homes or afford to move from the ones that they’re in[1]. (We, too, have a shadow banking industry. It’s called “hard money lenders” that home-in (pardon the pun) on weak and stretched borrowers and questionable properties.) Rents are plunging, even in Manhattan, due to investors using homes as rental investments, thus creating rental-housing oversupplies. This situation has been aided by the low cost of borrowing over many years. In this sense, the tight housing market is the result of a bad economy which allowed for low interest rates and low housing prices, and low-risk investing, rather than being the result of a stronger economy and higher incomes and home upgrades. It is prior weakness, not present strength, that is behind present home prices (which is based on low supplies).

The Fed’s silence on home prices in an environment of rising interest rates and stagnant wages and rising energy prices is deafening.

The Fed is so traumatized by the 2007 housing crisis (and the aftermath) that while it targets home prices … it dares not say so, lest a public panic would ensue.

Regardless of the Fed’s silence, there are in fact familiar sounds coming from the economy: Stagnant wages, rising gas prices, rising home prices, rising interest rates, a flattening yield curve … this sounds a lot like a tune from 2007.

_________________________

  1. I never thought I’d suggest that China’s government is being more honest and transparent than our own.

 

 

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
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The Complete Guide To The Ways To Manufacture & Sell Your Products

 

 

Rising Interest Rates And Another Housing Bubble Mistake- by NEIL SISKIND

This is the same problem we had with Former Chairman Greenspan in 2006 and 2007. No words and no understanding about housing. Just raising of interest rates as wages remains stagnant, and as gas prices rise.

Chairman Powell did not make even one comment about housing in his press conference Tuesday. This is like deja vu. Rates now are much lower than in 2006 and 2007. But its is about relativity and the trajectory- not, necessarily, the rate.

Rates are still low- but where jobs are, and where housing is, are related to today’s standards- not 2007 standards. Changes in these factors do not depend on where we were in 2007, they depend on where we are today vs. where they go. Low rates have caused this housing bubble. The fact that they are going higher is a change compared to what caused it. This is all that matters. If wages are out of whack with present prices (as happened in 2005-2007), then, as interest rates rise,as gas prices rise, as consumer product costs rise, as costs of debt rise, home prices will decline … or a bubble will pop … however you want to say it.

Best Hiking Spots Near- But Far From- Manhattan

Many of these hikes are within a mile or two of THE NEIL S. SISKIND NATURE PRESERVE- itself, one of the most beautiful hiking spots on earth.

Enjoy:

https://www.6sqft.com/the-7-best-hikes-near-new-york-city/#.WyFx8OF8yzY.linkedin

 

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 Fed’s Silence On Home Prices Is Deafening – By NEIL SISKIND

Inflation is still below or barely at the Fed’s target rate. The Fed admitted during Tuesday’s press conference that wages are stuck, and it doesn’t know exactly why. Yet- the Fed is determined to keep raising interest rates and engage in the reversal of quantitative easing.

Chairman Powell repeatedly stated during the press conference that the Fed’s job- or its mandate- is to attain maximum employment and price stability (and stability of the financial system).

Don’t we have this?

The Fed, and all of us, have been waiting for so long for the economy to have some inflation- now it’s just about here … and the Fed threatens to keep tightening to prevent it … to nip it in the bud … while wages (the biggest threat to growing inflation) are showing almost no inflation? The 10 yr. Treasury rate and the yield curve don’t evidence any inflation expectation. So why keep raising its target rate while also showing no intent to stop quantitative tightening?

It’s because the Fed is targeting housing. This is the price instability of which it is concerned. There is no other price instability- and there is no undue inflation. I think the Fed is secretly worried about home prices. Why? because they never mention them! A whole hour-long press conference on Tuesday and not one word about home prices- not a word, not even a syllable about home prices, even as incomes stagnate, and even though consumers’ homes are their most valuable assets, even as interest rates have been at near zero for years and supplies are historically low, and even though the mis-pricing of these asset earlier this century was the singular cause of a near-depression. Yet- the Fed says nothing.

The Fed should be data-driven at this stage, and should state such. But, instead, it, blindly, promises to keep raising its target rate and continue with quantitative tightening, and does not even pretend to be strictly data-driven. This is because of housing, its excesses, and its disconnect from incomes and values.

China has been raising interest rates, explicitly, due to real estate speculation and excessive leverage created by a shadow banking industry, while the Fed says nothing about our housing markets- yet people can’t find affordable homes or afford to move from the ones that they’re in[1]. (We, too, have a shadow banking industry. It’s called “hard money lenders” that home-in (pardon the pun) on weak and stretched borrowers and questionable properties.) Rents are plunging, even in Manhattan, due to investors using homes as rental investments, thus creating rental-housing oversupplies. This situation has been aided by the low cost of borrowing over many years. In this sense, the tight housing market is the result of a bad economy which allowed for low interest rates and low housing prices, and liquidity-driven low-risk investing- rather than being the result of a stronger economy and higher incomes and home upgrades. It is prior weakness, not present strength, that is behind present home prices (which is based on low supplies).

The Fed’s silence on home prices in an environment of rising interest rates and stagnant wages and rising energy prices is deafening.

The Fed is so traumatized by the 2007 housing crisis (and the aftermath) that while it targets home prices … it dares not say so, lest a public panic would ensue.

Regardless of the Fed’s silence, there are in fact familiar sounds coming from the economy: Stagnant wages, rising gas prices, rising home prices, low interest rates, rising interest rates, a flattening yield curve … this sounds a lot like a tune from 2007.

_________________________

  1. I never thought I’d suggest that China’s government is being more honest and transparent than our own.

 

 

 

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

 

 

Real Estate Prices And Simple Logic- By NEIL SISKIND

This article tells you everything about the real estate market you could need to know.

The low supply of housing should be causing rents to rise. But it’s causing them to fall. Why?

It’s because owners are really investors who are renting-out their apartments. This is why supplies are so low. Not because of a strong economy. Since low interest rates encourage real estate investment, supplies are low because of the previously weak economy- not because of a presently strong one.

https://www.bloomberg.com/news/articles/2018-06-14/manhattan-three-bedroom-apartments-suddenly-seem-like-a-bargain?utm_content=buffer49935&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer 

 

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

 

 

Fed Chairman Powell Dodges The Wages Question- By NEIL SISKIND

Chairman Powell, like most or many economists and analysts, can’t answer why wages are stagnant and why the Philips Curve is not taking hold.

During Tuesday’s press conference, The Chairman was asked, “Are we going to see wage growth this year?”.

The Chairman’s demeanor, to me, became a little jittery, as if he was a little nervous. His answer was that there has been some gradual wage growth, and there are many different ways to measure wage growth, and that he would have expected wages to react more based on the low unemployment, and there is a lot to like about low unemployment, and “it’s a bit of a puzzle”, and we will see wages going up. He went on to say that Fed’s role is to ensure that maximum employment happens in a context of price and financial stability, which is why the Fed is gradually raising rates- which almost sounds like he wants wages to stay low to prevent maximum employment with price instability, leading to higher interest rates and potential layoffs- something even worse than stagnant wages.

In his final comment of the press conference in response to another question about wages, the Chairman, again, made reference to the Fed’s goal of maximum and sustainable employment without the economy overheating- again sounding as if low wages were acceptable to him, even as interest rates rise, because with low wages, the  Fed is achieving its mandate, and people stay employed.

But is that what really matters here? Isn’t that a short-sighted or a shallow observation of things? What’s more important to the economy than the consumer? What’s more important to the consumer and his spending, than his income. You can’t just gloss over it. If there’s any risk… that is risk.

Rising prices, gasoline, and interest rates, even with rising wages, will eventually cause consumers to slowdown. But, such inflation without consumer buying power due to weak and stagnant wages- this latter scenario is much more deflationary than the former- mathematically.

It’s problematic that the Fed has no understanding about what drives wages. If interest rates and gas prices rise, and wages remain stagnant, how can growth be expected? Who will buy things, and how? Companies earn more from fiscal policy (tax cuts), and spend more due to supply side fiscal policy (capex bonus deprecation), but who will buy their products if wages are not only stagnant, but pushed even lower by higher product and debt costs? If higher wages don’t lead to more spending, then it must be more debt that does it.

If the Philips Curve is no longer valid- and it may not be- what other economic models are also providing false indicators? Why did Alan Greenspan and the Fed not see the housing crisis coming in 2007, or the ensuing financial crisis- both due to financial instability and inflated asset (home) prices, as interest rates rose- not inflation (energy and gas were rising- a tax on consumers-, but not wages).

Supply side economics must lead to wage growth in order to work- or else its not a working policy- it’s just tax cuts that add to the debt. If supply side tax cuts or policies don’t lead to demand, then it has failed as a policy.

What if the dollar weakens, too? Real wages will be even much lower.

I realize that the Fed is making tough choices, but they have to be based on more than pedestrian understandings of wages … or on none at all. Worse, the Fed may be content with wages at present levels, so that it can keep rates rising slowly- rather than more rapidly. Perhaps, the Fed is pleased that stagnant wages are keeping inflation in check so that the Fed can continue to preside over a solid economy and stay out of recession.

I would like to have heard Chairman Powell answer what the Fed’s growth targets would have been without the fiscal stimulus, and whether the Fed would have raised its target rate if there were no tax cuts or new supply side policies in the form of bonus capex depreciation. Would the Fed have cut its target rate and slowed down with its quantitative tightening program? Moreover, Is the Fed determined to raise its target rate as input and consumer prices and business spending rise, even if consumers lose spending power? Does the Fed believe that without wage growth, we will get the same growth and inflation as the Fed expects from fiscal stimulus as we’d achieve with wage growth? Or would the Fed raise higher and faster if wages were rising with conviction. Are wages almost entirely irrelevant to the Fed’s analysis of inflation and interest rate decisions? Even if wages make no acceptable gains, the Fed is still planning to continue to move its target rate higher and higher, as stated? Perhaps, the Fed will hit a wall before it expects if this is the plan. Consumer weakness will halt inflation risks … and growth.

Wages … this canary in the coalmine … is the canary in the coalmine; and the Fed’s policy is to ignore it and raise its target rate “gradually”, for no better reason than it just doesn’t understand it, or just doesn’t want to see it improve- causing its target rates to rise more rapidly.

The problem is that if the wage picture doesn’t improve while interest rates climb, and quantitative tightening continues, and gas prices remain elevated, the Fed won’t have to worry about rates rising gradually or rapidly … because they will decline, as the economy does, too.

___________________________________

Endnotes:

1.This is my plain English read of Chairman Powell’s comments at Tuesday’s Fed press conference:

I don’t know why people incomes aren’t going up but I’m going to raise interest rates because they “may”spend … which may or may not come from debt, and because businesses “may” spend because of tax cuts- all while Europe and China are slowing.
Why? Because retail sales have some strength. And tax cuts may get businesses to spend. And gas prices are elevated (which is a tax on consumers and may be a supply issue, rather than a demand issue) and unemployment is low. So, rates will keep rising.

It’s a bit vague- and convoluted.

2.  It sounds to me like unemployment is low because labor is cheap, as large companies take share from small local companies (ex: Home Depot taking business from small local hardware stores) and pay labor less. It sounds as if consumers are spending even with low wages, which means low savings or more debt. It sounds like businesses may or may not ramp up spending … keeping in mind that wages are stagnant which limits growth in consumer spending, and Europe and China have been- and may be- slowing.

3. I think the Fed is secretly worried about housing prices. Why? because they never mention them! A whole press conference and not one word about housing prices. That silence is deafening.

 

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 Real Inflation Problem

Inflation, ultimately, leads to deflation because it leads to higher interest rates and destroys demand. Prices decline, there can be a short recession, and then the economy heats back up as rates are lower. At least, this is the way its written in books.

The problem, today, is that any price inflation will not be accompanied by wage inflation. So, there could be severe demand destruction, including in housing, in such an exaggerated fashion, that a recession will be deeper that it should be. Moreover, consumer spending is being supported, not by wages, but by employment. As prices rise, businesses will cut overhead- meaning jobs. As a recession takes hold, more jobs will be cut. This can lead to a downward spiral.

Lack of wages means that job cuts and demand destruction would be heightened to combat an inflationary (and rising interest rate) environment.

 

 

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

 

 

Donald Trump And The Art Of The N. Korea Real Estate Deal- By NEIL SISKIND

President Trump has been concerned about China’s policies and economic activities and their affects on our economic interests for many years. Since being inaugurated as President, President Trump has had a target on China due to its growing economic, political, and technological powers, and its trade and currency activities, all to the detriment, or possible detriment, or potential detriment, of the United States. China is a major competitor to the United States, and, for the Trump administration, a major long-term threat to the United States’ position as the world’s foremost superpower.

The interaction and negotiations with North Korea is all about China. Just like Iraq in the Middle East, North Korea is a location where the United States wants a foothold (if not a stronghold) that provides us the proximity with which to monitor a threat to our security; in this case, China. Location, location, location.

People are wondering why President Trump is being lenient, and amicable, with and towards North Korea. It’s because the Trump administration, in my own estimation, has decided that we need influence in and over North Korea, as leverage over China. President Trump’s showdown with Kim Jong-un has never been, primarily, about nuclear weapons. I think that for the President and his administration, this has always been about China, first and foremost, (just a few days after the Summit with North Korea in Singapore, with the confidence of what President Trump claimed was a success in developing a relationship and a soft agreement with North Korea, and, with the confidence of such, the President signed-off on billions of dollars in tariffs on China’s exports to the U.S.).  I don’t think that President Trump is up all night fretting about North Korea’s nuclear program. But, I do think that he is up all night worried about China’s growing power in the world and it challenge to U.S. dominance and security and stability.

If you’re not thinking that President Trump’s ambitions in North Korea are all about his ambitions in China … then you’re not thinking. The moment the Singapore Summit ended, Trump went right to work on China.

President Trump has been using U.S. strength and the demand for “denuclearization”, or else”, as leverage to get control over North Korea because of its strategic location from where the United States can better monitor China (and Russia), without an intervening unfriendly nuclear threat (such as having N. Korea as an intervening power between our friend, South Korea, and China). To the degree that it is about nuclear weapons, it is as much about keeping those weapons, and North Korea, out of China’s reach and control. North Korea offers the United States prime real estate due to its shared border and direct geographic link with China. Location, location, location. Likewise, Kim Jong-un’s use of nuclear weapons is a red herring to get something he wants from the United States- money.

Yes, folks … as shocking as it is- this is all about money and power.

President Trump has succeeded in getting a mad dictator into a dialogue with an enemy nation across the world (us)- as opposed to with its own neighbors. How could the U.S. have done this without the threat of war? It could not have. President Trump found the leverage to handle an impossible scenario and get an enemy to the bargaining table without really giving him anything that can’t be reversed.

For some reason, many in the press think that President Trump achieved and accomplished nothing in his meeting with Kim Jong-un. For the press, everything should happen in public so they can write a story, or else there is some sort of failure. The press wants a headline: “President Trump Signs Historic Deal In a Day” or “President Trump Fails In Singapore”. But, you can’t have a business deal or a political deal without a relationship on which such is predicated.

If I can play armchair psychologist for a moment, I think that President Trump is able to relate to Kim Jong-Un because he identifies with him. First, they are both rebels who operate outside of “the system”, outside of acceptable norms, and value great individual power through charisma and force of will. It is the same reason that Trump identifies with Vladimir Putin. He respects that modus operandi. But, with Jong-un, it goes even deeper. Trump identifies with a young man, who, like Trump, inherited a great empire from his father and grandfather, and commenced on a propaganda and marketing program to establish his own individual career and brand and identity, and to establish himself as a power separate from, and perhaps, greater than, his father. Further, Kim Jong-un, Like Trump, has engaged in building beautiful buildings throughout Pyongyang to establish and prove his strength and power; and, he’s gone into a lot of debt and financial turmoil doing that, and is now reaching-out for financial help … just like Trump did with his father when Trump Taj Majal was crumbling and his debt was growing. Trump and Jong-un may have had similar, privileged childhoods, with constant demands and/or challenges to be their own men. They both lob bombs and take risky actions first, and ask questions later, which is typical of highly-privileged children with senses of entitlement. They use their inherited resources to control things. Trump and Jong-un would not be the first people to bond over the pressures of difficult and controlling and highly accomplished fathers. So, Trump’s implied message to Jong-un may be, “Trust me. I get it. I understand”.

But, maybe the news media doesn’t understand.

Perhaps the news media wanted the President to meet with Jong-un and lead the dialogue with a Godfather-like “offer he couldn’t refuse” so that the press could further its characterization of the President as a global antagonist and practicing isolationist.

President Trump negotiated and executed the meeting in Singapore with excellence. He can hardly explain his negotiation strategy or ultimate plan to the press, while, or before, executing upon it. He literally explained to the world during his Presidential campaign that he would not be warning his enemies that, and how, he was coming at them. So, what’s the surprise? President Trump has succeeded in his clear and vital objective of commencing a potentially productive dialogue with a mortal enemy that can provide us with a way to help keep China in check with U.S. access to North Korea’s strategically located real estate adjacent to China. Location, location, location.

Ultimately, we may likely have an Iran nuclear deal type of agreement, where we, the United States, pay North Korea a great deal of money for nuclear disarmament- and access to the closed-off nation. I, frankly, wouldn’t be shocked if North Korea gets to keep some of its nukes or nuclear development capabilities in exchange for a U.S. military base on the land or just off the coast of North Korea so that we can be in arms reach (proverbially and militarily) of China and Russia. Location, location, location.

I’m confident that North Korea’s commercial potential as a location for real estate, hotel, and casino development so close to China and Russia, and all that Chinese and Russian money, with the United States getting the first-crack at such development opportunities (with debt or equity) has not been lost on Donald Trump- if not for his own benefit, then for future Trump generations, or, at least, for American developers and operators, in general.

For Donald, Trump, it’s a real estate deal, and it goes like this:

“We want access to and use of your land, with a restrictive covenant that you can’t build or maintain nuclear weapons. How much will this cost?”.

Successfully achieving access, and, possibly, someday, use and development of land directly connected to China, in exchange for payments to North Korea- a permanent land use or development option, if you will- would certainly be Donald Trump’s best real estate deal, yet.

 

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