Financial News

[StrangeSox]

related:

 

Zachary Warmbrodt‏Verified account

@Zachary

 

Mnuchin to financiers at Milken conference, regarding deregulation: "You should all thank me for your bank stocks doing better."

[southsider2k5]

So what about the other 79% that aren't on governmental incomes of one sort or another but still saw 95% of the wealth gains of the past decade go to the top 1%? Maybe there's something wrong with the structure of our economy itself and not just 'government handouts' that has driven more and more wealth to the very top of the pile over the past several decades?

 

The argument seems sort of circular, anyway. People aren't on governmental assistance because they want to be, they're on it because there just aren't enough living wage jobs available, or health care has become too expensive for many people to be able to afford without assistance. The gains flowing to the very top have climbed much quicker as a percentage than government spending as a fraction of GDP, so that just doesn't really seem like a correlation let alone a causal effect.

 

edit: I mean, there are other countries with higher government spending per GDP, much more generous social safety net programs, and much higher economic mobility and lower economic disparity. If "government spending per GDP" is a major causal factor in more and more wealth going towards the 1% in the US, why doesn't it hold true elsewhere?

 

It is creating a permanent underclass that is utterly dependent on the government for just about everything. Our economy is trending more towards a Saudi Arabian look versus the Scandinavian one where a ton of people don't work, and really have no need to do so because the marginal gains aren't worth the different in income, or even the loss of benefits.

[StrangeSox]

It is creating a permanent underclass that is utterly dependent on the government for just about everything. Our economy is trending more towards a Saudi Arabian look versus the Scandinavian one where a ton of people don't work, and really have no need to do so because the marginal gains aren't worth the different in income, or even the loss of benefits.

 

That could potentially explain why say the bottom quintile or two saw their share of economic gains drop, maybe. That doesn't explain, at all, why 95% of the gains went to the top 1%.

[illinilaw08]

That could potentially explain why say the bottom quintile or two saw their share of economic gains drop, maybe. That doesn't explain, at all, why 95% of the gains went to the top 1%.

 

Late to the party on this, but it is a lot harder for the middle class and down to accumulate wealth when interest rates are so low. Savings accounts pay pennies in interest, so there's not a lot of financial benefit to saving. Most gains from the recovery have been in the market. People who can't afford to be in the market, or don't have the same ability to be in the market haven't been able to accumulate wealth through savings.

[NorthSideSox72]

Any of the financial people want to explain how this works and why they'd do it?

http://www.businessinsider.com/spotify-is-...t-an-ipo-2017-4

 

Am I correct that it basically allows investors to offload their stock on a public market but it is not issuing new stock?

It's share dilution, a bit like a warrant but with immediate strike. Since it doesn't raise new money, the only way for the value to float would be as part of the overall market cap. This dilutes the value of all shares. Which makes me surprised they are doing this, as it would reduce value for existing shareholders (unless they plan to do a one-time value split on existing shareholders with it).

 

[caulfield12]

Late to the party on this, but it is a lot harder for the middle class and down to accumulate wealth when interest rates are so low. Savings accounts pay pennies in interest, so there's not a lot of financial benefit to saving. Most gains from the recovery have been in the market. People who can't afford to be in the market, or don't have the same ability to be in the market haven't been able to accumulate wealth through savings.

 

Not to mention the 20% downpayment has made home ownership after 2008 increasingly difficult for the middle class members who are increasingly cash poor.

 

Health care costs have to be another big redistributor of wealth to the top, as well as student loan repayments...not to mention quantitative easing Federal Reserve policies.

 

Lastly, you can look at the evisceration of blue collar workers due to automation and globalization, tax policies highly favoring the 1%, inequality in educational outcomes in public education for the top 20% vs. the bottom 60%, deregulation in the financial industry and the growing divide between the start-up culture of Silicon Valley/NYC and the way of life on Main Street for everyone in-between the coasts.

 

Heck, Amazon and Wal-Mart monopolies alone explain a lot about what happened to the middle of America and the shopping mall experience completely disappearing, replaced by high tech gadgets that are increasingly the domain of wealthy kids.

Edited May 1, 2017 by caulfield12

[southsider2k5]

The VIX is under 10. I just bought some mid term out of the money options for a lottery ticket.

[StrangeSox]

Sweden's tax plan is the opposite of Donald Trump's - and it is proving hugely successful

On average, all strata of Swedish society are getting richer. Compare that to the low-tax US, where most Americans' incomes have fallen

It’s the polar opposite of the policy being developed across the Atlantic, where US President Donald Trump is hoping tax cuts, less regulation and new trade deals will produce 3 percent growth within two years. Meanwhile, in Europe, the Nordic model is attracting attention. Emmanuel Macron, who on Sunday defeated Front National’s Marine Le Pen in the French presidential election, has urged his country to look north for ideas on how to organise a society.

 

Andersson, who lists health care and education, “regardless of how much you earn,” as key to running a successful economy, points to income redistribution as the shield that can keep populist shocks at bay.

 

The numbers are compelling. Sweden has one of the world’s highest tax burdens, with tax revenue about 43 percent of GDP, according to OECD data. The equivalent figure for the US is about 26 percent. Sweden’s economy has grown almost twice as fast as America’s, expanding 3.1 percent last year, compared with 1.6 percent in the US

 

Sweden has the highest labour force participation in the European Union. Andersson attributes this to tax-funded parental leave and affordable daycare, which make it easier for both parents to work.

 

In contrast to most of its European peers, Sweden has budget surpluses. The EU average will be a shortfall of 1.6 percent in 2018, while the estimated deficit in the US of 5.7 percent of GDP, EU Commission data published in February show.

 

[caulfield12]

https://www.bloomberg.com/view/articles/201...&yptr=yahoo

 

 

A government economic model suggests that lower tax rates do lift investment spending. The independent OBR has its own model, which reaches similar conclusions, and uses it to adjust its forecasts of business capital spending when policy changes. A one-percentage point cut in the corporation tax rate has in the past been estimated to lift business investment spending by as much as 0.5 percent within 5 years.

 

If that holds true then the planned 11 percentage point cut in corporation tax might create a medium-term boost to business investment of around 5 percent. There will be more machinery, buildings and software available to produce output than before the cuts. Still, even with this impact, cutting corporation tax is not even close to paying for itself. The government estimates that the cost of the cuts would be halved only over the course of a couple of decades.

 

The problem with these assessments is that they assume all else is equal, which it isn't. As others have rightly noted, the impact of corporate tax cuts on the economy depends on where the money to pay for the measure has come from. In the U.K., businesses have been induced to spend more but public investment has been shrinking relative to GDP. And spending on healthcare and education -- investment in human capital -- has been squeezed compared with historical norms.

 

Trump should take note. A lower U.S. corporate rate may encourage companies to invest more there. But if he decides to cut growth-friendly funding to win support for his corporation tax plans, the growth dividend he hopes will help pay for them may never materialize.

[caulfield12]

Sweden's tax plan is the opposite of Donald Trump's - and it is proving hugely successful

On average, all strata of Swedish society are getting richer. Compare that to the low-tax US, where most Americans' incomes have fallen

 

Good thing you didn't quote from the second half of the article...

[Harry Chappas]

A financial instrument that is going to help the younger generations is the 401K.

 

My mother passed away and left me $15K in life insurance and $15K in a 401K that she gotten into later in life. She also left me a small house that was paid off.

 

She lived on a pension mostly and some social security.

 

If I stop contributing to my 401K at 60 and drop dead the next day, I will have some very happy heirs with their hopefully 7 figure 401K inheritence.

 

If I had a pension, they get nothing.

 

I never thought of this until my mother's passing.

[StrangeSox]

OTOH, a whole heck of a lot of people approaching or at retirement age right now have no pensions and little or no retirement savings at all.

 

It'll help the heirs of people who had enough extra cash to save substantially for retirement, which are fewer and fewer people these days. Lots of pensions have survivor benefits, too, which would pass benefits on to minor children and surviving spouses or other designated beneficiaries.

Edited May 17, 2017 by StrangeSox

[illinilaw08]

A financial instrument that is going to help the younger generations is the 401K.

 

My mother passed away and left me $15K in life insurance and $15K in a 401K that she gotten into later in life. She also left me a small house that was paid off.

 

She lived on a pension mostly and some social security.

 

If I stop contributing to my 401K at 60 and drop dead the next day, I will have some very happy heirs with their hopefully 7 figure 401K inheritence.

 

If I had a pension, they get nothing.

 

I never thought of this until my mother's passing.

 

Inherited 401ks don't just sit there and grow. Make sure you look at the rules, because you will have to take mandatory distributions, and you will be taxed on those distributions. You have, like, 1 year to decide what to do with them.

[StrangeSox]

CNBC ✔ @CNBC

BREAKING: Letter that begins NAFTA renegotiation process sent to Congress - source (via @kaylatausche) http://cnbc.com/id/104478441

[Harry Chappas]

Inherited 401ks don't just sit there and grow. Make sure you look at the rules, because you will have to take mandatory distributions, and you will be taxed on those distributions. You have, like, 1 year to decide what to do with them.

 

Ya I cashed it in and paid the taxes as it was not a large amount. I was going to have to take out like $150 a year.

[caulfield12]

http://money.cnn.com/2017/05/18/pf/college...ness/index.html

400k were promised student loan forgiveness, now they are panicking

[bmags]

This is pretty important after years of the recovery debates.

 

https://www.economy.com/dismal/analysis/dat...-It-Used-to-Be/

[caulfield12]

This is pretty important after years of the recovery debates.

 

https://www.economy.com/dismal/analysis/dat...-It-Used-to-Be/

 

If you broke it down into Rust Belt, Deep South and Appalachia....you'd still see some huge anomalous areas that don't fit with the coastal trends quite so well.

[bmags]

If you broke it down into Rust Belt, Deep South and Appalachia....you'd still see some huge anomalous areas that don't fit with the coastal trends quite so well.

 

Not really. Macro indicators are pretty good indicators. Even WV at 4.7, full employment is why these groups would drag back in.

 

https://www.bls.gov/news.release/pdf/laus.pdf

[StrangeSox]

The employment numbers may be there, but how do the wages compare to the previously lost jobs?

[bmags]

That doesn't have anything to do with 6-7 years ago when people thought the bigger issue was structural and not demand driven. We hit full employment and suddenly those thought to be structurally out of workforce reappear as employable. That's good for wages anyhow. But money is still not pushing to labor for other reasons.

[StrangeSox]

You're right, I was just curious and didn't see it discussed in the article. I remember all of those 2009-2013 or so stories about the increasing SSDI numbers indicating the 'structurally unemployed,' too.

[caulfield12]

Who knew, Millennials actually were saving more (travel/eating out/fitness clubs), but not for marriage/children/houses/retirement

https://finance.yahoo.com/news/millennials-...-195619131.html

 

 

But while millennials may be eschewing more traditional financial goals, they’re still focusing on building their savings. This age group, which includes people 18 to 34, is saving more money than any other generation; on average, millennials save 19% of their annual paychecks, compared with 14% for baby boomers and Gen Xers. More than a third (36%) of millennials say they save more than 20% of their paychecks each year.

 

So where does that money go to if it’s not being funneled into retirement accounts? According to the Merrill report, 81% of millennials spend their money on traveling. Eating out and exercising are the two other activities millennials listed before they’d save for retirement. These spending habits point to a shift in the way millennials use their money for personal fulfillment, compared to older generations.

 

 

Thought this comment was interesting:

 

people are saying well they all live at home with mommy and daddy. ok, fair. BUT most millennials are racked with outrageous student debt, apartments cost a small fortune (except the ones that are rat infested and are deteriorating), and the job market is a disaster overall. there isn't just 25 millennials you know.....it's a huge age group, more than any other generation and they have come into a crisis born out of irresponsibility and greed, not to mention rampant corruption at every level of government (local, state, and federal). so is this generation full of schmucks? yes. but don't even preach at me how the other generations are just amazing specimens that are the ideal role model to follow. so give me a break with that garbage. and if you disagree, then take a look around you at people your own age. yes, you all got your share of losers, criminals, and corrupt dirtbags. but oh, let's just highlight the shortcomings of millennials to deflect the failures of the other generations. let's do that. it's the adult thing to do. not help them out or encourage them. NO. that would take effort. instead let's be loser slobs on an internet comment board and act like they aren't willing to try and become productive citizens in a country that is currently full of turmoil.

Edited May 23, 2017 by caulfield12

[CrimsonWeltall]

Who knew, Millennials actually were saving more (travel/eating out/fitness clubs), but not for marriage/children/houses/retirement

https://finance.yahoo.com/news/millennials-...-195619131.html

 

 

But while millennials may be eschewing more traditional financial goals, they’re still focusing on building their savings. This age group, which includes people 18 to 34, is saving more money than any other generation; on average, millennials save 19% of their annual paychecks, compared with 14% for baby boomers and Gen Xers. More than a third (36%) of millennials say they save more than 20% of their paychecks each year.

 

So where does that money go to if it’s not being funneled into retirement accounts? According to the Merrill report, 81% of millennials spend their money on traveling. Eating out and exercising are the two other activities millennials listed before they’d save for retirement. These spending habits point to a shift in the way millennials use their money for personal fulfillment, compared to older generations.

 

Maybe I'm missing something, but how does it count as *saving* money if they're *spending* it on vacations and eating out?

[caulfield12]

From yahoo board this morning...scary AND sad

https://finance.yahoo.com/news/message-trum...-022438684.html

 

I worked in corporate America from 1975-2012, 50-60 hours a week. I was let go in March 2012 because I wouldn?t cover up a product defect (electrical fires). Since March 2012 I have had 3,432 emails regarding jobs in every part of the USA. I have gone on interviews from Miami to Seattle and had 10 job offers that I accepted and then they were all rescinded once the company found out my birthdate (55-59). I have been using the money I saved to live on while continuing to look, for 5 f*cking years. How many of you have 5 years of savings laying around to live on? A year ago, I moved from Ecuador where I was preserving my savings to a Medicaid Expansion state to help me with my medical bills for a heart condition, diabetes, and respiratory illness?while I keep looking. So, when someone tells me, after working 37 years, they are going to take away medical support and that I should just go get a job, that is pretty damn pompous, na�ve and gutless. Did you know that even Walmart and Home Depot want a year or two of experience in retail to start at minimum wage? I had no plans to retire 10 years early. I would be ecstatic to land a job. I suggest you realize that some people on Medicaid or food stamps (Snap) are not the low lives you think we are. We don't all have 7 babies, or spend our days smoking crack in our trailer parks. And I would be happy to show anybody any day the attempts I make every day to get a job. If everything goes as the republican's plan, some of us are going to snap from the pressure of no job, no medical and less and less money and then we are going to load up that Glock 9mm and before we escape all the #$%$ we are going to wreak havoc on those who belittle our misfortune.

Less

Edited May 23, 2017 by caulfield12