You Should Fear An Economy Relying On The Consumer- by NEIL SISKIND

Business investment is weak, many corporate balance sheets have significant debt loads, stocks are crashing, wage growth is still weak while tariffs have been implemented and new ones await, and as interest rates have risen and are still rising.

Analysts point to a strong consumer and a strong jobs market as the bases for a strong economy going forward.

You can’t have demand side stimuli (consumer spending) support an economy, and you can’t have a strong jobs market, without supply side stimulus … not for very long.

This is 2005-2007 all over again- stagnant or slow wage growth, rising rates, low unemployment, high debt levels due to rates being low for long, sinking oil prices, low inflation, and asset (houses and stocks) and debt excesses- except now we also have a trade war.

 

 

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

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

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

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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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“Synchronized Global Growth” Is Now “Synchronized Global Slowth™”

A phrase first coined in 2018 New York City business attorney, Neil Steven Siskind, “synchronized global slowth™” (or “synchronous slowth™”) is 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 rising 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 and less available dollars in smaller, or emerging economies, in turn. Slowing consumer demand and business spending in the larger more developed economies that result from a constrictive monetary policy, results in less export business for the smaller emerging economies which often depend on the larger economies to buy their goods, and in further economic slowth. Rising interest rates in the larger developed markets force weaker emerging markets to, likewise, consider raising their own interest rates to protect their respective currencies, even as their economies weaken- further expanding the breadth and enhancing the depth of global economic slowth. Currency issues resulting from rising rates or tighter lending rules, play a particularly large role in “synchronized global slowth” as the U.S. dollar strengthens from rising interest rates, making repayment of the dollar-denominated debt of many countries more costly to repay, creating additional global slowth. Political factors, such as trade disputes in large economies leading to trade barriers, including, tariffs, may also play a role in the occurrence of “synchronized global slowth”.

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A Housing Slowdown May Not Be All Bad News- by NEIL SISKIND

Housing prices have been too high for too long. People bought low in 2011 and 2012, low interest rates have fueled speculation, and corporate buyers have entered the markets to rent out homes for income- depleting inventories for home-buyers.

Recent reports on housing starts are mixed- down 14% in the mid west, up 29% in the northeast … so, mixed.

The Fed has been raising interest rates. Most indicators seem to show that housing is slowing. Assuming this to be the case, it may not be the worst news.

If the Fed can coordinate a “slow” deflation of asset prices (housing and equities) that have been inflated by excess (or excessive) liquidity, while people are working, this could be an excellent result (i.e a soft landing). Moreover, as construction jobs slow, it will free-up the labor market for small businesses who need the kind of employees that have migrated to construction (i.e. laborers or blue collar) and mortgage and real estate brokering (sales and office administration workers).

So, housing may not result in a 2007-like popping of a bubble that takes down the entire economy and financial system- it may have a more muted, and even beneficial result, as it helps keep wage inflation low.

Of course, it’s not all good news. As housing prices go lower, so does household wealth and refinancing, which negatively affects consumer spending.

This is all separate from issues related to energy prices, trade disputes and tariffs, shadow banking, and the other affects of rising interest rates. When you take economic data and factors together, rather than individually, the picture, of course, can change. But, taking housing, alone, a slowdown, making homes more affordable as people are still working, while also alleviating pressures on wages as labor is freed-up from housing related businesses, is not the worst thing in the world- especially if the benefits of lower housing prices outweigh the negatives of higher costs of borrowing to buy a home- so that net, net, buyers can do a bit better as asset prices decline. At the same time, home owners who are not selling, will not really be negatively affected by the lower valuation (beyond their general personal net worth). Fairer, or more balanced prices for both buyers and sellers may mean a more active and healthy market- rather than no one being able to afford to buy a home because no one can afford to move because they can’t afford a different home.

If net, net, jobs are not lost, or are easily replaced, and there is no negative systemic affect on the financial system, then lower asset prices (houses and equities) can be a healthy outcome for all.