FYI:
Regards,
Ted
May 9, 2019
Dear WEALTHTRACK Subscriber,
Market volatility is back. The roller coaster trade negotiations between the U.S. and China are lurching downward again causing a multi-day market sell-off rivaling declines in December of last year.
The much bigger question is how stable is the world financial system? A decade ago in the midst of the global financial crisis, it appeared to be on the brink of destruction. Massive and unprecedented monetary stimulus by central banks and fiscal stimulus by governments stabilized financial markets and supported banks and businesses. There was a huge unwinding of debt in the financial, corporate and household sectors.
Fast forward and the U.S. which was the epicenter of the financial crisis has led the world out of it. Since 2009, we have experienced the longest bull market in our history and are just weeks away from setting a record for the longest economic expansion.
Why then is there a sense of unease?
The IMF in its recent World Economic Outlook report calls this a “delicate moment” for the global economy citing escalating trade tensions, particularly between the U.S and China, (this week’s developments are a useful illustration) a slowdown in China’s economy, the unresolved challenge of BREXIT, weak industrial production and investment in many developed and emerging market economies and growing sovereign debt, to name a few. And the IMF points out that a worsening of any of these downside risks “would take place at a time when conventional monetary and fiscal space is limited as a policy response.”
How limited is the policy response and what’s the outlook for global growth?
Few are better equipped to provide answers than this week’s guests. John Lipsky is Distinguished Scholar at the Henry A. Kissinger Center for Global Affairs at Johns Hopkins University School of Advanced International Studies, as well as Senior Fellow at its Foreign Policy Institute. Prior to that he served a five-year term as the International Monetary Fund’s First Deputy Managing Director as well as being its acting Managing Director in 2011.
He holds several other leadership positions at prestigious organizations including Vice Chair of both The National Bureau of Economic Research and The Center for Global Development. He received a Ph.D. in economics from Stanford University. As did his close friend Nick Sargen, an international economist turned global investment strategist. Sargen is now Chief Economist at Western & Southern Financial Group and Senior Investment Advisor at its wealth management arm, Fort Washington Investment Advisors where he had been its Chief Investment Officer until his retirement.
Sargen is the author of several books including Global Shocks: An Investment Guide for Turbulent Markets and most recently Investing in the Trump Era: How Economic Policies Impact Financial Markets.
If you’d like to see the program before it airs, it is available to our PREMIUM subscribers right now. Also in this week’s EXTRA feature, both guests will share their views on President Trump’s very vocal criticism of Fed policy and its significance for financial markets.
If you would prefer to take WEALTHTRACK with you on your commute or travels you can find the WEALTHTRACK podcast on TuneIn, Stitcher, and SoundCloud, as well as iTunes and Spotify.
Thank you for watching. Have a wonderful Mother’s Day weekend. If you have time, please take a look at our tributes to our mothers in WEALTHTRACK’s closing credits at the end of the program. We owe them so much! As always make the week ahead a profitable and a productive one.
Best regards,
Consuelo
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