AM I NEXT? IS THE HANDWRITING ON THE WALL AT CRRC (MASSACHUSETTS)

Beijing, China-based CRRC, the world’s leading rail car designer and builder for high speed trains and mass transit vehicles, is facing a major political problem. The company’s Boston, Massachusetts facility may be facing mass layoffs should the U.S. decide to further punish China with additional tariffs and restrictions in the ongoing battle to open Chinese markets to American goods, eliminate currency manipulation that unfairly impacts U.S. businesses, force China to stop the theft of military, industrial, and commercial intellectual property, and reduce the risk of infrastructure sabotage.

In an effort to prevent our enemies, namely China, from introducing security risks into major American products and critical infrastructure, legislators have amended the $733 billion annual military appropriations bill to include a section to keep American corporations from receiving federal funding for rail equipment from companies associated or controlled by the communist Chinese government.

The Defense Appropriations Act which is necessary to fund military operations in 2020 contains an amendment (S. 846) known as the Transit Infrastructure Vehicle Security Act. This legislative addendum "protects federal dollars from being spent on Chinese buses and railcars, and improves cybersecurity in public transportation.” The rationale, “Federal dollars should not support Chinese state-controlled enterprises that want to undermine U.S. manufacturers and overtake our supply chain that supports rail and bus manufacturing.” For those wishing to read and/or track the legislation, it can be found at here.

There is no doubt that a number of unionized American workers could lose their current positions and a large number of new workers will never be employed.

Understand, there is more at stake than the number of union employees that will be affected. China believes that control over logistics, especially the ports, rail systems, and trucking, is to be able to exert control over a nation’s economy — and has the ability to cripple, delay, or destroy individual companies and military efforts.

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

AM I NEXT? DOES THE DEMOCRAT PARTY POSE a major THREAT TO BUSINESS?

If you are to believe the Democrat Party candidates for the Presidency of the United States who participated in the two-night debate sanctioned by the Democratic National Committee on June 26th and 27th 2019, the inescapable handwriting is on the wall …

The Democrats are about the fundamental political, economic, and social transformation of America and it is all to be funded by American corporations that are portrayed as greedy and ill-deserving of the profits used to benefit executives, employees, and the investors. Unmindful of the fact that some of those investors are mutual funds whose shares are held by many ordinary individuals as part of their retirement packages.

Little or no attention was paid to the massive government spending and the exponentially expanding debt where debt service will consume the entire GDP in the near future.

While tariffs were condemned, nobody mentioned the windfall of funds flowing into the U.S. Treasury that will be spent by politicians buying influence and votes in the present election cycle.

Nobody bothered to mention that legislation created by the Democrats (Dodd-Frank) allows regulated financial institutions to use their client’s money to save them from their own bad decisions. Simply Google “bail-in” to see what might happen if the economy turns South quickly.

While candidates speak about wage inequality and a “living wage,” entry-level positions for those with few skills and little experience were not meant to support a family of four. Paying what was previously classified as “casual labor” $31,200 plus benefits ($15/hour) which will result in bankruptcies, loss of significant revenues, and major labor dislocations. Companies will replace full-time employees who qualify for benefits with a series of part-time employees who will not be eligible for benefits. Ask yourself if you are willing to pay $40 for a McDonald’s meal for yourself, your spouse, and your two children? The casual labor that was to be protected, now faces an existential threat.

Are you prepared for a union-intervention by those who reward seniority over merit, favor the status quo over innovation, subdivide logical tasks to create the need for additional unionized employees, and add significant time, effort, and costs to most products and services? Can you rise through a union-mandated hirearchy based on your performance?

This is not about politics per se, it is about your future; politics simply one of the risk factors to be considered when planning ahead.

Vote your future.

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

THE TRUMP FACTOR: DEALING WITH UNCERTAINTY & INSTABILITY

There is little or no doubt that one of the greatest influences on the economic and geopolitical scene is President Donald J. Trump. 

Few, possibly including the President himself, know what Trump is likely to do, either in the short-term, long-term, or as we have seen, moment-to-moment.

This type of uncertainty and instability is good for brokerages who benefit as the shifting positions produce maximum volatility and an acceptable cover story when proffered advice turns sour and client's lose money. 

This type of uncertainty and instability is good for negotiations. With America's counterparties realizing that more extreme statements by the President may be a public relations ploy or simply another negotiating tactic. Consider all the brouhaha over the Presidential announcements relating to severe tariffs on steel, aluminum, and other products. Now we are finding out from Presidential surrogates that there will be exemptions for companies and countries depending on the re-negotiated individual deals. 

Considering the Consequences ...

Unfortunately, this type of uncertainty and instability is bad for forecasts involving markets and future financing. Thus the tendency of companies to conserve cash and defer CAPEX (Capital Expenditure) investments or to expand their employee headcount.  It is extremely difficult to offer a set price along with terms and conditions if one does not have a firm grasp on the costs of labor and materials that are required to fulfill long-term contracts. Or even the pricing of these contracts given forward currency fluctuations. You must decide for yourself, where any of the President's announcements are likely to lead. 

But it is not all up to the President, Congress plays a role in the uncertainty and instability. Consider the healthcare industry. With consumer choices being driven by increasing insurance premiums and deductibles, the reduction in both private and government insurance reimbursement rates to facilities and physicians, and the demographic crisis linked to an aging population and a declining number of facilities, physicians, and diagnostic devices, planning for the future is extremely hard or next to impossible. Even technological gains and competition is unlikely to produce acceptable resolutions without some level of pain.  And, none of those Members of Congress are likely to read or understand those 2000+ page bills that are crafted in secret by politicians responding to special interests and offered as a fait accompli.

The only solution is to engage in an effort to future-proof your life and career. One, by reducing the debt load that can dictate your decisions and keeps you from exploiting emerging opportunities. Two, by reducing the clutter in your life to ensure some degree of mobility and freedom of action. And three, by developing multiple independent sources of income that isolate you from unanticipated adverse events, be they health- or employment-related. 

Keep asking yourself that question that is normally asked in the deep recesses of your mind: Am I Next?