Skip to main content

The Business Climate for the Year to Come

Image result for mesa

So, how is 2020 going to play out?

In terms of the business/financial health of the developed world, my guess would be that the year willbe a mixed bag, with a plateauing of the major indexes but no sharp downturn.

Central banks, after all, will continue to keep interests law and likely will get innovative with "non-conventional" measure to keep credit flow and equity valuable. 
Governments will continue to go into debt. Everybody is taking a "we owe it to ourselves" attitude. Since we, the human race, hold all the debt that we, the human race, have incurred, the gross amounts involved can't really matter, can they? That is facile and stupid. Accordingly, one will continue to hear it.

The bullish case depends on that.

The bearish case for 2020 looks to geopolitical risk. First, there is a financial crisis underway in Italy. The Italian government is doing everything it can to ensure that this crisis is not only its problem -- that it is the problem of Europe. As an analyst for a London bank wrote recently. "The bottom line is that as and when a serious new crisis blows up, the Italian government is positioning itself to demonstrate to its voters that it has not sought to leave the Eurozone, but rather that the Eurozone is leaving Italy.”

Notice that the analyst did not say “when a serious new crisis blows.” In this matter, one rightly says “as and when” not “if.”
When that crisis does happen, the Italian government is ready to use it as an argument for leaving the Eurozone. That impact of that on the heels of Brexit is obscure and, thus, worrying.
There are a number of other geopolitical risks, any one of which could catalyze a serious downturn. The odds are good that the bullish factors I mentioned above will be enough, though, to counterbalance whatever such bombs DO hit. So we won't go off a cliff. But we probably will be traveling along the top of a mesa all year. 
Labels:

Comments

Post a Comment

Popular posts from this blog

A Story About Coleridge

This is a quote from a memoir by Dorothy Wordsworth, reflecting on a trip she took with two famous poets, her brother, William Wordsworth, and their similarly gifted companion, Samuel Taylor Coleridge.   We sat upon a bench, placed for the sake of one of these views, whence we looked down upon the waterfall, and over the open country ... A lady and gentleman, more expeditious tourists than ourselves, came to the spot; they left us at the seat, and we found them again at another station above the Falls. Coleridge, who is always good-natured enough to enter into conversation with anybody whom he meets in his way, began to talk with the gentleman, who observed that it was a majestic waterfall. Coleridge was delighted with the accuracy of the epithet, particularly as he had been settling in his own mind the precise meaning of the words grand, majestic, sublime, etc., and had discussed the subject with William at some length the day before. “Yes, sir,” says Coleridge, “it is a maj...
9 comments
Read more

Searle: The Chinese Room

John Searle has become the object of accusations of improper conduct. These accusations even have some people in the world of academic philosophy saying that instructors in that world should try to avoid teaching Searle's views. That is an odd contention, and has given rise to heated exchanges in certain corners of the blogosphere.  At Leiter Reports, I encountered a comment from someone describing himself as "grad student drop out." GSDO said: " This is a side question (and not at all an attempt to answer the question BL posed): How important is John Searle's work? Are people still working on speech act theory or is that just another dead end in the history of 20th century philosophy? My impression is that his reputation is somewhat inflated from all of his speaking engagements and NYRoB reviews. The Chinese room argument is a classic, but is there much more to his work than that?" I took it upon myself to answer that on LR. But here I'll tak...
17 comments
Read more

Recent Controversies Involving Nassim Taleb, Part I

I've written about Nassim Taleb on earlier occasions in this blog. I'll let you do the search yourself, dear reader, for the full background. The short answer to the question "who is Taleb?" is this: he is a 57 year old man born in Lebanon, educated in France, who has been both a hedge fund manager and a derivatives trader. He retired from active participation from the financial world sometime between 2004 and 2006, and has been a full-time writer and provocateur ever since. Taleb's writings for the general public began where one might expect -- in the field where he had made his money -- and he explained certain financial issues to a broad audiences in a very dramatic non-technical way. Since then, he has widened has fields of study, writing about just about everything, applying the intellectual tools he honed in that earlier work. As you might have gather from the above, I respect Taleb, though I have sometimes been critical of him when my own writing ab...
4 comments
Read more