A number of leading economic indicators are pointing to rough times ahead, but the good news is that there is still time to prepare. Dr. Sabrin thinks that the next economic downturn could arrive in late 2023, and that the US Central Bank (FED) may not be able to intervene in markets to the degree it was able to in previous recessions.

Sabrin was the New Jersey Libertarian Party nominee for governor in 1997 and twice sought the Republican nomination for U.S. Senate. His newly released book is Navigating the Boom/Bust Cycle: An Entrepreneur’s Survival Guide. Grit Daily asked Sabrin about the potential for a recession, and what it might mean for regular people, and the wider economy.

GD: The FED was able to create a massive rise in many assets in the Post-COVID era, why would it be unable to support the economy this time?

Murray Sabrin: At this time with price inflation at a 40 year high, the Fed will be tightening money and credit conditions to prevent price hikes from accelerating. When price inflation subsides, the Fed will then turn on the monetary spigot to juice the economy and the financial markets. In other words, the Fed’s easy money policies are always followed by its tight money policies, giving us the boom/bust cycle. Take away the Fed’s ability to manipulate interest rates and create money out of thin air, the economy would grow fairly steadily as savings/investments and consumption would not be subject to wild swings during the Fed-created business cycle.   

GD: The jobs numbers (BLS) that are used by the government and mainstream press clearly don’t represent reality. The masses of homeless on US streets are evidence of this. What would a modern recession look like? 

Murray Sabrin: When the recession unfolds, the sectors that “boomed” during the easy money phase — commodities, intermediate products such as machinery, housing, auto sales — would correct, that is, the cheap credit would dampen the demand for these products. As workers are laid off in these sectors, the retail sector would also feel the effects of tight money. However, the good news is the economy has been undergoing a technological revolution, so to speak, with e-commerce, artificial intelligence and other innovative breakthroughs that could last for decades, thus dampening the ill effects of the next downturn. In other words, there are always  secular trends in the economy that are relatively insulated from tight money policies. Nevertheless, for most companies, being prepared for a recession is typically not on their radar screen, but it should be.  

GD: From the standpoint of a US business, what would the effects of a recession be? What could be done to prepare? 

Murray Sabrin: Businesses that are in economically sensitive sectors have to monitor their sales and expenses closely to determine if their company’s future may have hit the proverbial bump in the road. Entrepreneurs should have contingencies in place if it appears the economy is rolling over and there may be disruptions in their supply chains. One of the best leading indicators of an upcoming recession is when short term rates rise above long-term rates, which is an inverted yield curve. The lead time for a recession when the yield curve inverts is usually about 12 months.

The financial press reports on the yield curve constantly, and it can be monitored here, and here.

The former chart is the one that is usually reported in the financial media. The latter one reflects the Federal Reserve’s ongoing tightening of credit conditions.

Companies should consider setting aside cash from their operations as the year unfolds, which would provide them with the ability to pick up assets on the cheap when producer prices and other prices fall during a recession. Famed investor Warren Buffett, CEO of Berkshire Hathaway, has squirreled away, so to speak, more than $140 billion in cash on the company’s balance sheet, a huge amount of liquidity. Is he waiting for the next stock market decline to pick up quality stocks at bargain basement levels? Time will tell.

GD: Policymakers at the federal level in the USA no longer work for main street or the shrinking middle class. It’s clear that the top 1% of the economic ladder has an outsized influence in policy decisions. How does this impact government policy in a recessionary environment? 

Murray Sabrin: Wall Street is the biggest cheerleader for easy money because it causes asset prices to increase substantially during the boom. When the recession unfolds and the stock market tanks, the 1 percenters know the Fed will “have their back” and inflate to raise asset prices. We’ve seen this play out over and over again since the Fed was created in 1913. Recently, the Fed inflated the supply of money credit after the dotcom bubble burst in the early 2000s and then in the depths of the housing bubble in 2008-’09. And in 2020, the Fed went wild to deal with the government lockdowns and added more than $4 trillion to its balance sheet while the M2 money supply increased 25 percent. The new money has been spreading through the economy causing prices to rise — the law of supply and demand is working as usual — for the past year, and prices will probably accelerate in 2022 unless there’s a huge burst of production that will “soak up” the excess liquidity that’s been injected into the economy.

GD: Let’s talk about the “bust.” Can you lay out a few things that are likely to happen in the next recession?

Murray Sabrin: The next recession should occur in 2023 and no later than 2024 as the Fed begins to tighten money and credit to dampen price inflation. There may be a period known as “stagflation,” where the economy contracts but price inflation is still high. The lead time from tight money conditions to a recession is variable, but should be obvious when the unemployment rate begins to increase.

The post Economist Murray Sabrin Sees Recession Coming appeared first on Grit Daily News.

The National Association of Business Economics (NABE) reported Monday that only 13% of the business economists surveyed expect a recession this year. The same time last year, 42% of respondents said they expected a recession in 2020.

Instead, about 74% of the respondents said their forecasts had a recession coming in 2021 or later.

The survey collected 210 responses during the last week of January and the first week of February, meaning the survey was conducted when the coronavirus outbreak was only beginning to spread.

The economists appeared to be pleased with the Fed’s efforts to steer clear of a recession.

Last year, the Federal Open Market Committee cut rates three times for a total of 75 basis points. At the time, the Fed cited concerns over trade policies and geopolitical tension, adding that inflation was running below its 2% target.

Almost two-thirds, or 63%, of the surveyed NABE members said the Fed now has monetary policy right for the U.S. economy.

The NABE members said some of Trump’s economic policies had helped the economy get a boost to GDP. About 44% of the respondents said policies like the 2017 tax cut and deregulation had provided a “modest boost” to the economy.

But nearly all of the respondents, around 90%, said the tariffs were a net negative and “modest drag” to GDP.

The article Economists Pull Back Odds On A Recession In 2020 by Brian Cheung first appeared on Crunchbase News.

The post Economists Pull Back Odds On A Recession In 2020 appeared first on Grit Daily News.

According to Professor Tan Kong Yam, the co-director of the Asia Competitiveness Institute Research Centre at the Lee Kuan Yew School of Public Policy, manufacturers have been hit hard across Europe, South Korea, and Japan as a result of the “tit-for-tat” tariffs that the U.S. and China have thrown at each other.

However, according to Tan, this entire trade war is but a sideshow, only intensifying a greater war–technology. The tech war, according to Tan, will be a generational struggle, particularly as the automobile industry continues to steadily increase.

The robust growth in Southeast Asia in the automotive industry comes as a breath of fresh air for automakers, who are seeing a slowdown in the world’s top two economies. While the global automotive industry has been doing well the last several years, tracking a relatively steady recovery after the downturn in the early 2000’s, and has been on an upward trajectory since 2015. Industry analysts expect the Southeast Asian auto sales to also slow down this year, as the effects of the U.S. and China trade war will begin to spill over into the regions which are heavily reliant on exports to China.

The Era of Economic Surrender Is Over

Southeast Asia is quickly becoming one of the most dynamic and industrialized regions in the world. Contributing to this rapid development, is the growing car market driven by an increase in demand for automobiles. The additional injection of new technologies are also paving the way for strategic partnerships, which look to improve the mobility of Southeast Asians.

According to media reports, vehicle sales in Southeast Asia jumped six percent in 2018, for the third straight year. This robust growth in 2018 was great news for automakers, with the aggregate of new car sales in Singapore, Indonesia, Thailand, Vietnam, the Philippines, and Malaysia, registering over $3.57 million sales.

By the end of 2019, it is estimated that this number will reach 4.29 million units, according to HIS Markit forecasts, though with the current trade war between the United States and China, this could slow down sales. The U.S. goods trade deficit with China was $419.2 billion in 2018, an 11.7% increase over 2017, according to data from the U.S. Census Bureau.

The world’s top two economies have engaged in this trade war that began a year ago as a tariff fight, eventually finding its way into other sectors such as technology. Over the past few months, Washington has accused Beijing of intellectual property theft, something China has always denied, which along with other issues have been covered in their trade negotiations.

On Thursday, the U.S. and Chinese deputy trade negotiators resumed face-to-face negotiations for the first time in nearly two months. Several rounds of negotiations between the two sides have so far failed to yield a breakthrough. 

Although the rate of growth is likely to slow in the U.S. and Europe due to the current economic disputes, it is fair to assume that automotive markets could shift away from well-established markets in Japan and Korea, and more towards developing and emerging markets.

Sales of new cars in Southeast Asia’s six major markets increased for a third straight year in 2018, rising 6% and breaking the previous record set in 2013.

Thailand’s Massive Jump

Thailand marked a 20% jump in sales to 1.04 million units on the back of a robust economy. Automakers competed fiercely in the second-largest car market in the region to lure customers with low-interest financing and other enticements.

Indonesia’s Projected Growth

Fortunately for prospects in Southeast Asia, many of those developing markets exist in the region, particularly in populous and urbanizing countries like India and Indonesia. 

Indonesia is currently projected to show a sharp rise in consumer demand for personal vehicles as they are in the middle of an extended period of strong employment numbers and general economic growth. With sales growing 7% to 1.15 million units, the total among the six nations, which include, Malaysia, the Philippines, Vietnam and Singapore, came to a record 3.57 million units. 

While China’s rapid expansion seems to be showing signs of slowing as its economy establishes and stabilizes, India’s economic growth is speeding up, effectively balancing overall economic growth for the region.  

Southeast Asia is also entering into a period of rapid urbanization and modernization. China is already the world’s number one market for electric cars and electric mobility, a trend which is expected to continue for the next few years.  

Why China’s Economic Sanctions Won’t Hurt the Automotive Industry

Despite the current economic sanctions hurting trade figures in China, the country is not anticipated to experience a significant economic downturn or a significant decline in its automotive industry or consumer demand.

Investment and government spending, particularly in large-scale infrastructure projects like the Belt and Road Initiative , is currently projected to compensate for trade short-falls, although the continued fluctuations in tariffs do make the situation somewhat volatile.

The Age of 3D Printing

As technological innovations such as 3D printing come about, it has the potential to bring about savings in labor and smarten up supply chain logistics across Asia. 3D printing is already seeing robust growth  globally, including Southeast Asia. 

Last October, HP Inc. launched a research facility in Singapore with Nanyang Technological University (NTU) that focused on digital manufacturing technologies and 3D printing.  Opening with an $84 million U.S. investment, the HP-NTU Corporate Innovation Lab was the US vendor’s largest university research partnership worldwide and first for the Asian region.

Another major innovation in Singapore is the recent 3D printing planet, opened by German engineering firm, Thyssenkrupp. Emulating the TechCenter in the Asia Pacific region, Thyssenkrupp will focus on polymer and metal additive manufacturing technologies, while serving new customers in a new region and benefitting from the country’s aptitude in manufacturing technology.

Integrative network technology will also be of increasing importance in this region, especially in the premium market, as 26 pilot smart cities have been chosen from participating ASEAN member states, indicating a national and regional commitment toward innovating and planning for more modernized cities. With those innovations will come increased demand for advanced manufacturing and integrative commuter vehicles. 

Natural Disaster Recovery

Currently, the region is still very vulnerable to economic and human damage as a result of natural disasters, yet as the region is able to embrace modern practices and natural disaster planning, the risk of economic damage resulting from chance events will decline.

Partially because Southeast Asia is more vulnerable than other global regions to the adverse effects of global climate change, this is a region that will see more focus on environmental regulation. Environmental regulation and the innovation needed to meet demand and regulatory standards are expected to be one of the significant hurdles for the next decade.

Existing corporations  are currently providing a good model for maintaining an environmental focus, like Giti Tire Group, while still taking care of investors, employees, and consumers. The balance for the automotive business needs to be on meeting environmental requirements without sacrificing global competitiveness. 

Rather than viewing the environmental challenges of this region as problematic, the automotive industry should embrace the challenge in anticipation of global changes to the entire industry as consumer habits and environmental regulation both change. 

Another hurdle currently is the high price of oil and gas throughout Southeast Asia, another reason this region is a particularly good prospect for electric and hybrid vehicles. As gas and oil prices increase, the 

OEM innovation is critical. Southeast Asia is also a good location for meeting manufacturing needs in this respect, however, as the region is focused on innovation and urbanization on a large scale and is becoming increasingly welcoming of forward-looking companies and manufacturers.

More than half of all small-car automotive demand in 2007-2012 came from China, and small and emerging markets, like the emerging countries of Southeast Asia, are expected to contribute as much as 66% of all small-car consumer demand in 2020.

From 2020 on it is expected that consumer demand, particularly in small vehicles, will concentrate on emerging and urbanizing markets, particularly in Southeast Asia as the region is developing into a steady market force. 

It should be remembered that almost every nation in Southeast Asia is currently employing market-price pressure to reduce vehicle ownership and the resulting street congestion, and street congestion is a significant factor in consumer demand. 

However, vehicle ownership is still consistently increasing in Emerging Asia, and while those price-based market controls mechanisms are reducing ownership slightly, they are not currently a significant barrier for the consumers most likely to invest in vehicles. Indonesia is a good example of this, with approximately 60% of the population citing a desire for a new vehicle in the next 2 years. Price pressure would have to increase significantly to make a meaningful difference in consumer demand over the next few years. 

Because Southeast Asia was largely emerging and becoming more economically stable during the shaky years of the early 2000s, the region is now in a strong growth position moving into the next decade. For now, China is still a driving force behind the demand for electric vehicles and funding for electric vehicle innovation, but India and Indonesia are both gaining economic strength and stability, making them good future markets. 

Overall, prospects in Southeast Asia are good. Factors to consider are the high ratios of corporate debt to GDP, particularly in China, as well as economic inequality throughout the region. Consumer demand strongly favors smart vehicles and connectivity innovations, and while environmental innovation is currently favored, it is also expected to be an increasing regulatory requirement as we move into the next decade. 

While there are certainly some risk factors, as in any emerging region, Southeast Asia is now well-positioned as a growing consumer market and a manufacturing center for the automotive industry.

Editor’s Note: This article was originally published on September 29, 2019. 

The post Amidst Economic Trade War Between the U.S. and China, Southeast Asia’s Automotive Industry Has Promise appeared first on Grit Daily News.

Perhaps it is his meditation practice that helps puts him in tune with the movements of the markets. One of the most successful hedge-fund mangers in the world, Dalio has amassed a fortune of more than $18 billion. Part of those riches stem from the fact that in 2007 he predicted that the world was about to experience a global financial crisis.

Now, once again, Dalio has issued a stern warning that something is seriously not right with the global financial system and that a paradigm shift is not only needed, but inevitable.

The good news for startups, however, is that until this paradigm shift occurs, we are in the midst of one of the best times ever for startup founders to raise capital.

Because of policies put in place by the Federal Reserve in the aftermath of the Great Recession, wealthy investors have plenty of cash sitting around earning paltry returns just waiting to be put to work funding ideas and dreams that may turn out to be the next Facebook or Uber.

From the point of view of startup founders, our broken financial system presents what may be a once in a lifetime opportunity to raise capital. Not surprisingly, 2019 was a banner year for IPOs.

As Dalio points out, not since the original dot com bubble of the early 1990s has there been so much money available for tech startups seeking capital on the basis of nothing more than dreams and ideas.

Time to Dream Big

If Dalio is right, Wall Street will continue to unleash waterfalls of money upon founders with big dreams to sell.

Here is the “money” quote:

Because investors have so much money to invest and because of past success stories of stocks of revolutionary technology companies doing so well, more companies than at any time since the dot-com bubble don’t have to make profits or even have clear paths to making profits to sell their stock because they can instead sell their dreams to those investors who are flush with money and borrowing power. There is now so much money wanting to buy these dreams that in some cases venture capital investors are pushing money onto startups that don’t want more money because they already have more than enough; but the investors are threatening to harm these companies by providing enormous support to their startup competitors if they don’t take the money.

But it gets even better. Dalio believes that the market distortions that are producing the unprecedented glut of capital will magnify and get worse, (thus generating more available investment capital for startups) before the whole financial system collapses and a “paradigm shift” occurs.

So dream big all you startup founders! The good times shall continue, until they don’t.

If you have a time horizon longer than the short-term though, you may be interested in why Dalio believes the financial world has gone mad.

Too Much Capital

First, there is simply too much capital in the system. The federal reserve has pumped too much money into the system through quantitative easing and other financial gimmicks.

Dalio points to investor’s willingness to accept negative interest rates as Exhibit A that investors have too much money chasing to few viable investments.

Paying someone for the privilege of using your money is not how capitalism is supposed to work. Negative interest rates violate a bedrock principle of economics – namely, the time value of money, which holds that a dollar today is worth more than a dollar tomorrow.

In a healthy functioning financial system, investors are supposed to get a return for investing and and lending capital not pay a price.

The D-Word

Shakespeare might have written “neither a borrow nor a lender be,” but governments around the world have not heard this message because central banks continue to purchase large amounts of debt and keep interest rates artificially low.

Under normal circumstances, capital markets have a built in safety mechanism to restrain governments from borrowing more than they should. When the supply of government bonds exceeds investor demand, bond prices drop and interest rates rise, making it more expensive for governments to borrow and discourage them from issuing more debt. Under the current financial regime, central banks around the world keep interest rates artificially low by serving as the buyer of last resort for government bonds and other securities.

Dalio says that the whole concept of central banks buying large quantities of bonds is simply “sound finance being thrown out the window” and cannot last forever.

Broken Promises

Corporations and governments have not set aside enough money to pay for the pension and retiree medical benefits that they have promised to their workers.

Low and negative interest rates have exacerbated this problem, because benefit plan managers have assumed expected rates of return that are far greater than their actual investment results in the low and negative interest rate environment that currently reigns supreme.

Dalio expects that governments around the world will eventually monetize their underfunded pension and healthcare obligations. “Monetization of debt” is a euphemism that has been en vogue since the Financial Crisis and is just a fancy way of saying “money printing.”

Dalio does not mince words in warning about how big a problem printing money out of thin air to satisfy pension obligations and retiree medical benefits. He says that governments printing money on such a large scale “threatens the viability of the three major world reserve currencies as viable storeholds of wealth.” Yikes. Bitcoin anyone?

Trickle Down Has Dried Up

Economic policy makers justify showering money on the financial system by saying that the wealth will “trickle down” to the working class as the investor class puts its money to work.

Dalio believes that the trickle is not enough to maintain social order. The gap between those who benefit from our crazy financial system and everyone else is just too big to last foreover.

How it all ends though, and, perhaps more importantly when it ends, is anyone’s guess.

Bottom line – until our financial system collapses, the good times for startup founders should continue and may get even better as the distortions increase. Just don’t forget that we live in a financial world that has “gone mad” — Dalio’s words — and could collapse on a dime.

Also be sure to save some of your pennies for a rainy day, because you may need them when the inevitable paradigm shift shuffles in.

The post The Silver Lining for Startups in Ray Dalio’s Call for Financial Collapse appeared first on Grit Daily News.

What does the future entail? Failed state? Or economic prosperity for 40 million people?

Without a doubt, 2019 will go down in history as a pivotal year for Ukraine. The last couple of years have yielded slow economic degradation. The only possibilities seem to be either a j-curve on the road to prosperity or a deep slide into a failed state.

Yes, 2019 is a year of presidential and parliamentary elections. These events of course are of critical importance but in my humble opinion are secondary in nature.

It is equally difficult for people, outside and inside of Ukraine, to see the ‘tipping point’ because Ukraine is full of contradiction. Ukraine is notorious for corruption but unlike previous times, today, everyday authorities arrest people that take or give bribes;  the majority of international observers do not see that. Unfortunately, most offenders do not go to jail. Instead they are removed from the system and they lose their voice. Still, sophisticated corruption schemes are prominent at the highest levels of the government along with the business elite. At the same time, people are willing to die for independence and yet many want a “strong man” to lead the country.  

While economic indicators are rising from a low base signaling a turn around, investors do not return due to a lack of trust. Ukraine’s businesses are screaming for new markets, strategic partners, education and liquidity. Meanwhile, over 40% of Ukraine’s GDP is in the “shadows,” and therefore unaccounted for.

The country is in a hybrid war with Russia: Sure, it has full intentions to embrace western values. This would indicate significant anti-Russian sentiment — yet how can one explain trade has increased by double digits with the “enemy?”

Ukraine’s geopolitical role in the economic tension between United States, Russia, China and EU makes it difficult to forecast where the country is going to be in five years. As Wall Street traders say, ‘”there is no trend line.” But one thing is very clear: There is a “fight” between letting go of the known past and embracing an uncertain future.

Ukrainians have no choice but to embrace the uncertain future without fear and without reservation. There are several major underlying trends that are irreversible and irrespective of the political outcomes in 2019 that will define Ukraine for foreseeable future:

No more “Mother Russia”

Russia is seemingly holding Ukraine back. Russians under any leadership will continue to attempt to influence the economy and politics of Ukraine. Fortunately, the grip that was on Ukraine for hundreds of years is gone. After the annexation of Crimea, over 13,000 citizens killed and millions displaced, Ukraine is permanently out of Russia’s economic and psychological grip.

Demographics

There are two major positive and negative trends.

Positive: The younger generation is coming to power. This group has never experienced the reign of the Soviet Union while adults and those of older generations have no resources, drive or knowledge to sustain the fight.

Negative: Declining birth rates have been rising, exacerbated by a “brain drain” to more lucrative salaries and tech opportunities in the west.

Technology

Ukraine’s businesses are poised and government agencies are forced to use the latest technology across all operations to greatly improve efficiency and allow full transparency in order to build trust and adaptability. Additionally, the latest technology makes corruption schemes on all levels much harder to execute and keep hidden from public scrutiny.

Economic opportunity

For Ukraine, intellect will drive economic prosperity in the 21st century. Its 99% literacy rate, history and culture of revolutionary innovation, gas deposits that can support over ten percent GDP growth for 75 years and vast agricultural lands that are envied by many other countries are factors that show why Ukraine has among the best economic opportunities in the world. All sectors of the economy — from all types of infrastructure to its space program — can easily absorb tens of billions of dollars of investment with potential ROI ahead by double digits from similar investments opportunities in other parts of the world.  

In reality, 2019 will have minimal activity on the investment front for the country’s future. Everyone will be waiting for the political and possible geopolitical outcomes to materialize which will make things clear.

With that being said, it is important to understand that Ukraine and its supporters around the globe should not waste time. All must focus on building the foundation that tips the scale towards a prosperous future in the next twelve months.

I propose to start the change with a discussion that will unite people within and outside of Ukraine about the future direction of the country: this all starts with identity.

What does Ukraine stand for? What is the country’s ideology? What are its people’s values? What is the country’s vision?

Historic transformations of idolic countries like Israel and Singapore began with a very specific focus on the country’s identity, ideology, and vision for the future. It is a great road map for Ukraine to follow. As an Ukrainian native and US citizen, here is where I stand.

Ideology

Ukraine will have a “digital democracy” that values transparency, prosperity and social responsibility. It is simple: Technological innovations make all government and non-government activity transparent. It increases trust between the government and its people along with furthermore eradicating corruption. Simultaneously, it increases efficiency in all operations that would lead to economic prosperity and an opportunity to gather real time data to engage the government, corporations and local communities in a collaborative effort to serve those in need.

Vision

Ukraine is the “intelligent logistics hub to the world”. The vision is based on three core assets of Ukraine: The intellect of its people, natural resources and geography.

Ukrainian combined intellect can make the country a leader in over twenty industries in the 21st century. Examples include nanotechnology, aggrotech, space, new materials, biomass, robotics and many others.

The natural resources of the country reduce costs across the board from production to logistics. Its ideal geographic location, being in the center of Europe, with availability of modes of transportation infrastructure — which all needs to be refurbished for the 21st century.

Easy access and travel to countries of the European Union, Asia, Middle East, Africa and Russia will make Ukraine an intelligent logistical hub to the world.  Although it may be common sense from an outside perspective, it is vital that Ukraine implements these ideas and show the world its potential.

The world must pay attention

For the first time in history, the United States, China, European Union, Russia and counties of Middle East have an opportunity to coordinate economic renaissance with each other and in the process create new economic models of cooperation. A thriving Ukraine will become a country that unites humans need for a better life. Without further adieu, lets “tip” Ukraine into prosperity for all.

The post Henry Shterenberg: Ukraine is at a tipping point appeared first on Grit Daily News.

The Future Investment Initiative conference is scheduled for the end of October in Riyadh. It was a chance for Saudi Arabia to highlight it’s economic situation and highlight their role in global business. Counting on outside investment, Saudi Arabia may lose out a lot of potential capital.

Currently, business owners and CEOs that have confirmed they will be abstaining from the conference include:

• Uber CEO Dara Khosrowshahi
• Jamie Dimon of JPMorgan Chase
• Bill Ford, Chairman of Ford Motor Co.
• Viacom Chief Executive Bob Bakish
• Billionaire Steve Case, one of the founders of AOL
• Los Angeles Times owner Patrick Soon-Shiong
• HP executive Joanna Popper
• Arianna Huffington, who sits on Uber’s board and runs a consulting firm called Thrive Global.(Huffington is no longer affiliated with HuffPost.)

Other media companies said outright they won’t fly to Saudi Arabia for the conference include Bloomberg, CNN, the New York Times, and several other outlets.

Not all American businesses have canceled on the summit as of yet, but it looks like they might.

Khashoggi was a reporter for the Washington Post and was a known critic of Saudi politics, which is what authorities presume led to his disappearance and probable death. He was seen entering the Saudi embassy in Turkey earlier this month, and hasn’t been seen since. Turkish authorities speculate that he was killed inside the building.

This latest political killing could have an effect on global economics. American businesses like Ford and Chase prey on expansion in the Middle East, but politics have always made business tricky in the area.

NBC reports:

The disappearance of Saudi journalist Jamal Khashoggi has led to an exodus of international A-listers from what is called “Davos in the Desert,” potentially undermining the event. The Khashoggi case itself also threatens to derail Crown Prince Mohammed bin Salman’s international effort to rebrand the kingdom.

In the past days, a slew of business leaders announced they would not attend the second Future Investment Initiative. Larry Fink, chief executive of BlackRock, the world’s largest fund manager, and Stephen Schwarzman, CEO of the huge private equity company Blackstone, on Monday became the latest executives to withdraw, according to Reuters.

While Saudi Arabia does continue to make some effort towards progress, like finally allowing women to drive last year – the country has also seen a widespread crackdown on dissent. If the situation continues to dissolve into violence, it could threaten the entire country’s earning potential.

The post Chase and Ford Drop Out of a Saudi Investment Conference After Journalist Goes Missing appeared first on Grit Daily News.