Barring the unexpected, a trade deal with China is not imminent. Investors should prepare for escalating tariffs and heightened stock market volatility, as the market re-prices the risks to the currently strong U.S. economy. We advise ignoring tweets, anonymous reports, rumors and speculative news stories with a short- term focus. The context of the tariff conflict is that of a geopolitical high stakes struggle between the U.S. and China, making it challenging to find acceptable common ground.
Meanwhile, the Middle East is heating up to a near boiling point. Military skirmishes, if not all out war, involving Iran, the U.S. and our respective regional allies, are real possibilities. We also came across some fascinating articles on various topics relating to health, longevity and happiness. The long article on the medicinal potential of CBD is the best I have read. Lastly, please let us know if you have any specific areas of interest. A client asked about leasing vs buying a car, and we discovered an article that might benefit many clients and friends. Delighted to oblige.
- A Long and Painful Trade War? Perspective on the China trade conflict has been in short supply. This article by Neil Irwin, one of my go-to writers on complex economic topics, does an excellent job explaining why there is no easy fix. New York Times Ray Dalio, the legendary hedge fund investor, explains that it is an ideological war. LinkedIn
- Escalating Tensions with Iran: There is so much intractable hatred, anger and religious and economic competition in the Middle East. How can it not erupt into more violent conflicts involving Iran, our regional allies, and potentially the U.S.? CNN The price of oil is a good proxy for the likelihood of military conflict. These tensions may ultimately be more worrying to the financial markets than the trade conflicts.
- Therapeutic Uses of Cannabidiol (CBD): Much research is needed, and the legal issues remain thorny. But the medicinal potential of non-psychoactive cannabis plant extract (i.e., CBD oil) may be enormous. CBD may be derived from either hemp or marijuana and is relatively benign in its side effects. Contrast CBD to Tetrahydrocannabinol (THC), the active chemical in marijuana that does have strong psychological effects. This article initially focuses on CBD’s potential for treating children with epilepsy but is educational on the entire topic. New York Times
- Understanding How Tariffs Work: President Trump has claimed repeatedly that China pays any tariffs, which is a good deal for the U.S. The way it works though is that the importing company pays any tariff and then attempts to pass on the added cost to the U.S. consumer. Larry Kudlow, the president’s economic advisor, conceded as much in a recent interview. CNBC The tariffs do hurt China, as its goods become less price competitive. Your share of the tariff “tax”? The latest U.S. tariffs on imported China goods will cost the average U.S. household roughly $490 annually in increased costs per one estimate. CNBC
- Leasing vs Owning a Car: Whether it makes more sense to buy or lease a car depends entirely on the details and individual consumer, but this article lays out some important considerations. Lifehacker
- Do We Really Want to Be Happy? I recently came across an interesting distinction the famed psychologist, Daniel Kahneman, makes between happiness and satisfaction. We experience happiness mostly in the company of other people, and it may be fleeting. Satisfaction is more about achievement and comparisons and feeling positive about your accomplishments. Would you rather be happy or satisfied? Quora
- Phones, Cortisol, and Longevity: More evidence mounts on why we should moderate and monitor our phone utilization. Phone usage can raise our levels of cortisol, the stress hormone. New York Times
- The Healing Power of Gardens: Spending time in nature is known to increase psychological well-being. While not everyone wants to hike, most of us have easy access to lovely gardens. This article is an excerpt from Dr. Oliver Sacks’ Everything In Its Place, published after his death. New York Times
- The Land of the Immortals: Okinawa is known for its surprising number of centenarians (those who live to 100). We can learn much about longevity from Okinawans: “ikigai” or sense of purpose; “moai” or tribe; and a healthy diet. CNN
Feel free to send us feedback on any topic or make a request or to forward the notes on to anyone who might be interested.