Financial News

[Balta1701]

14 minutes ago, southsider2k5 said:

The fed funds rate is 2.25%.  If the economy can't handle a 2 1/4% FF rate, this economy is a house of cards.

Take a look at this chart and tell me how the fed is overreacting again.  Hell our big problem is WHEN we do get our next recession (not if) there will be nothing left on the books to do to try to fix the economy again.  Interest rates are already WAY under historical norms.  The Fed still has trillions of holdings on the books.  Labor Force participation is already 5% points under historical numbers, so tax cuts will have a limited effect because too many people aren't working anyways.  The deficit is already approaching a trillion dollars annually.  Having a real interest rate was LONG overdue, and probably a great statement as to how artificial and manipulated the entire "economic health" is right now if it still needs tax cuts and 0 interest rates to survive.

https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

.....we could do a stimulus at the federal level where the federal government spends money....

[Y2HH]

2 hours ago, southsider2k5 said:

The fed funds rate is 2.25%.  If the economy can't handle a 2 1/4% FF rate, this economy is a house of cards.

Take a look at this chart and tell me how the fed is overreacting again.  Hell our big problem is WHEN we do get our next recession (not if) there will be nothing left on the books to do to try to fix the economy again.  Interest rates are already WAY under historical norms.  The Fed still has trillions of holdings on the books.  Labor Force participation is already 5% points under historical numbers, so tax cuts will have a limited effect because too many people aren't working anyways.  The deficit is already approaching a trillion dollars annually.  Having a real interest rate was LONG overdue, and probably a great statement as to how artificial and manipulated the entire "economic health" is right now if it still needs tax cuts and 0 interest rates to survive.

https://www.macrotrends.net/2015/fed-funds-rate-historical-chart

I don't think they're "overreacting", I simply think they're trying to course correct in to swift a fashion. I'm not opposed to the rate hikes, as a matter of fact I think they're necessary and long overdue -- however -- I think they're coming too fast.

[southsider2k5]

6 minutes ago, Y2HH said:

I don't think they're "overreacting", I simply think they're trying to course correct in to swift a fashion. I'm not opposed to the rate hikes, as a matter of fact I think they're necessary and long overdue -- however -- I think they're coming too fast.

Its really not though.  If you go back and look at the last raise cycle, they went from 1 to 5% in the time we have gone from 0-2.  The raise cycle before that we went from 3-6% in about the same period of time.

Again, if the economy can't handle 2%, there is really something wrong with the economy.

[raBBit]

Look at interest rates historically. The federal fund rates had been kept under 1% for 10 years ending at the end of last year.  Before '08 we hadn't had the rate under 1% since 1954. We are a debtor nation with an economy built on free money. While some will say Trump's administration's monetary policy is too aggressive given the recent market performance, in reality, the current rates are nowhere near historical average. The entire economy has been propped up by these rate decreases over the last ten year. As soon as the Fed pulls the carpet out from underneath it'll get scary quickly. 

[Y2HH]

1 hour ago, southsider2k5 said:

Its really not though.  If you go back and look at the last raise cycle, they went from 1 to 5% in the time we have gone from 0-2.  The raise cycle before that we went from 3-6% in about the same period of time.

Again, if the economy can't handle 2%, there is really something wrong with the economy.

It can handle it, which is why I said there is likely nothing to worry about in my original post (I use the word likely because I don't "call" markets, I'm not stupid enough to pretend to be that smart!)

I still think they're going at it a bit too swiftly only due to how long it's been since they started raising rates. Gotta wean these people back into it instead of yanking off the band-aid.

[southsider2k5]

1 hour ago, Y2HH said:

It can handle it, which is why I said there is likely nothing to worry about in my original post (I use the word likely because I don't "call" markets, I'm not stupid enough to pretend to be that smart!)

I still think they're going at it a bit too swiftly only due to how long it's been since they started raising rates. Gotta wean these people back into it instead of yanking off the band-aid.

Again, it hasn't been that quick.  If anything this is super slow compared to historical raise periods.

[caulfield12]

 

If Obama's FED hadn't lowered rates and the debt HAD increased even more considerably (trying to get out of the unprecedented Great Recession), then I can't imagine how hard he'd be getting hammered right now for blowing up the Federal debt.

Meanwhile, we're heading for a $1+ trillion deficit, hitting the end of our 10 year economic expansion and NOW having to discuss cutting SS/Medicare/Medicaid/Social Programs (of course, not defense/military, they get 10% more that they didn't even ask for) and having no fiscal/monetary policy tools left because the tax cuts are already baked in (and some more permanent than others) and spending even more money on infrastructure as we go into a contractionary period is going to come at a heavy cost for both sides politically.

Of course, NO political side wants to be the accountable to electors to put in 15% cuts to these programs due to reckless government policies and free money. 

Trump's trade war and this interest rate/debt funding/bond market issue is going to overwhelm everything else.

[Y2HH]

15 hours ago, southsider2k5 said:

Again, it hasn't been that quick.  If anything this is super slow compared to historical raise periods.

These people don't have a long term mindset anymore -- so while it's not quick compared to the past, the past no longer matters -- what matters is these suddenly fast rising rates (after a decade of none) are being combined with a trade war, and while either separately wouldn't make a dent, both combined are making for a potential storm.

I think if they had started the rate hikes long before they did (and they should have), and spread them out over these years they slept at the wheel, not only could we be way ahead of where we are now in terms of interest rate, but it would have been a lot more seamless/painless.

[southsider2k5]

1 hour ago, Y2HH said:

These people don't have a long term mindset anymore -- so while it's not quick compared to the past, the past no longer matters -- what matters is these suddenly fast rising rates (after a decade of none) are being combined with a trade war, and while either separately wouldn't make a dent, both combined are making for a potential storm.

I think if they had started the rate hikes long before they did (and they should have), and spread them out over these years they slept at the wheel, not only could we be way ahead of where we are now in terms of interest rate, but it would have been a lot more seamless/painless.

They weren't asleep at the wheel, they knew the economy wasn't nearly as strong as pundits made it out to be.  It still isn't as strong as people are acting like.

[raBBit]

13 hours ago, caulfield12 said:

 

If Obama's FED hadn't lowered rates and the debt HAD increased even more considerably (trying to get out of the unprecedented Great Recession), then I can't imagine how hard he'd be getting hammered right now for blowing up the Federal debt.

Meanwhile, we're heading for a $1+ trillion deficit, hitting the end of our 10 year economic expansion and NOW having to discuss cutting SS/Medicare/Medicaid/Social Programs (of course, not defense/military, they get 10% more that they didn't even ask for) and having no fiscal/monetary policy tools left because the tax cuts are already baked in (and some more permanent than others) and spending even more money on infrastructure as we go into a contractionary period is going to come at a heavy cost for both sides politically.

Of course, NO political side wants to be the accountable to electors to put in 15% cuts to these programs due to reckless government policies and free money. 

Trump's trade war and this interest rate/debt funding/bond market issue is going to overwhelm everything else.

What are you even talking about? The Federal debt did blow up under Obama? 

EDIT: Before you respond with your partisan stuff, it blew up under Bush too and will continue to blow up under Trump. Believing one fact doesn't permit one from believing other facts.

Edited October 12, 2018 by raBBit

[caulfield12]

3 hours ago, raBBit said:

What are you even talking about? The Federal debt did blow up under Obama? 

EDIT: Before you respond with your partisan stuff, it blew up under Bush too and will continue to blow up under Trump. Believing one fact doesn't permit one from believing other facts.

How much of the Obama $10 trillion was directly related to cleaning up Bush’s debacle?

Half?  

What should Obama have done differently that wouldn’t have added to the deficit but still would have ameliorated all the overhanging problems?

If we had followed the Romney plan of letting all the automakers fail and be acquired as distressed assets (like his Bain & Co. does) where would we be now?

And the biggest BS is Trump running up $3-4 trillion in additional debt when the economy is supposedly humming along...the deficits should be closing, like they did in the late 90’s under Clinton with higher capital gains taxes, lower estate level taxes, higher corporate taxes and the truly rich in this country like Bezos paying a “fairer” share.  It’s almost like Trump wants to bankrupt the country, then magically print $25 additional trillion under the cover of night and “pay it all off at once.” 

[NorthSideSox72]

45 minutes ago, caulfield12 said:

And the biggest BS is Trump running up $3-4 trillion in additional debt when the economy is supposedly humming along...the deficits should be closing, like they did in the late 90’s under Clinton with higher capital gains taxes, lower estate level taxes, higher corporate taxes and the truly rich in this country like Bezos paying a “fairer” share.

This nails two of the biggest policy frustrations I have right now, and this is coming from someone who is not fiscally liberal. First: Trump and his buddies have massively increased deficits and added to the debt WHEN THE ECONOMY IS ROARING, which is patently stupid. No economist thinks this is a good idea, nor anyone with a real grasp of how the economy and government debt work. When this run slows down or reverses - which it will because that's how reality works - the deficits will explode from being too high to being outright dangerous. And this is being done by the party who constantly moans about mounting debt!

Then the other aspect here, the idea that the GOP has pushed since Reagan that taxes are just too damn high. Back then it was probably true. But right now the tax burden on everyone, but especially the wealthy and corporations, is dramatically lower than it was even during the roaring 90's, let alone the sky-high rates of the 80's. The whole idea that the deficits are a spending problem is assinine (not that there aren't some spending problems too, but that is not the major problem here).

 

[Balta1701]

The NY Times published another one - this time how Jared Kushner and his family have basically avoided paying taxes and how avoiding taxes is basically their only income source.

 

[raBBit]

2 minutes ago, Balta1701 said:

The NY Times published another one - this time how Jared Kushner and his family have basically avoided paying taxes and how avoiding taxes is basically their only income source.

How do you avoid taxes if you don't have any income to be taxed?

[Balta1701]

9 minutes ago, raBBit said:

How do you avoid taxes if you don't have any income to be taxed?

You borrow money and have the government give you money back based on the interest and over-claimed depreciation, then you sell the property and invest into another one to do the same thing without having to pay capital gains taxes on them. Standard legal fraud, like I assume at this point most wealthy people are doing.

[raBBit]

2 hours ago, Balta1701 said:

1.) You borrow money and have the government give you money back based on the interest and

2.) over-claimed depreciation, 

3.) then you sell the property and invest into another one to do the same thing without having to pay capital gains taxes on them.

4.
) Standard legal fraud, like I assume at this point most wealthy people are doing.

That writer is pretty interesting. He used to write back in 2010. Nothing too inflammatory just informative stuff for the lay man. Once Trump got elected, he started writing extensively and exclusively about Trump, Cohen and Kushner specifically. That's all he's done for the last 18 months. 

1.) Where in the article did it say  the government gave him money?

2.) Depreciation is limited for multifamily properties (not as much as residential real estate) and standardized for residential real estate. If you disagree with the tax implications of depreciation I would first say you should learn more about it because focusing on one individual for tax law that is applicable to every person doesn't seem to make a lot of sense.

3.) The 1031 tax reform doesn't allow you to avoid capital gain taxes. It allows you to defer them in exchange for taking on more risk. You keep the same basis of the property so if your new property results in additional recognized gains you're paying more capital gains taxes later on. Acting with jurisprudence is the difference between making it in real estate and not making in real estate. A piece of tax code is the difference between an investor making a deal or sitting out of a deal.

4.) This isn't fraud. This is an example of a real estate giant acting within the law to best serve their business practice. You would not be able to become a real estate giant if you didn't do exactly that. You see, his business is going to act with the shareholders, creditors and other stakeholders best interest in mind. Some CEO's can be fired if they don't act in the best profiting interest of the company they lead. So when you look at it from the person in scope's point-of-view, you could see why they act in the best interest of the company. CEO's have regulations and laws to have them act  legally and ethically. Past that, they worry about appeasing stakeholders not the whimsical hearts of bystanders who don't have the slightest understanding of the business practice.

In any case, it seems your issue is more with the law or the government corruption that influences and creates law. That I can get behind. But highlighting one person because of a circumstantial relationship that you are diametrically opposed to implies your concern for this piece of tax law isn't all that genuine.

Edited October 13, 2018 by raBBit

[caulfield12]

#4 is exactly why Mnuchin or Countrywide/Mozilo was never prosecuted in 2009/10.

Because our country has legalized fraud, such as parking immense amounts of corporate and individual profits offshore in tax havens like the Caymans, Panama, Switzerland.  Why is our Treasury currently running a trillion dollar deficit when corporate profits have never been higher?  

Whereas the upper middle class guy with an income of $75K who gets audited and can’t afford to fight the IRS indefinitely with an army of lawyers gets screwed.

While it might not be fraud because a lobbyist or Congressperson in their pockets created a loophole big enough to get Refrigerator Perry through...it’s shady/unethical (not in the best interests of MOST Americans), representing the utter lack of morals and values that are ubiquitous across corporate America these days, and with the Kavanaugh appointment, not even ultimately challengeable through our court system.

The 1% never really suffers, no matter what moral harms or hazards they bring down on everyone else.  Right now, someone in the Madoff, Kushner and Manafort families are still living the life of Riley on the backs of those they’ve screwed over or cheated.  When they do get caught, they settle outside of court and only 20-30% of the real victims are made whole, like those owning Kushner apartments in NYC and NJ who had their rents raised based on fraudulent information and were illegally convicted, or those who believed that Trump University could make the rich (or 85% of the people who have ever worked for Trump), too.

Obama, Schumer and Frank are just as guilty as anyone of letting all those white collar criminals get off with light raps on the wrist.

Edited October 14, 2018 by caulfield12

[bmags]

Bad Blood by John Carreyrou on his investigative work on Theranos is a highly entertaining, great read.

[StrangeSox]

If you're worried about deficits, vote Democratic. The GOP tax cut for billionaires that was not only going to pay for itself, it was going to pay down the debt has instead led to a deficit increase of 17% while corporate tax payments fall 31%. Who could ever have predicted this??

 

 

Edited October 15, 2018 by StrangeSox

[raBBit]

7 hours ago, bmags said:

Bad Blood by John Carreyrou on his investigative work on Theranos is a highly entertaining, great read.

Could you cliff-note why Theranos is in the news again? I thought the fraud was exposed and criminal charges were levied already?