Economic slowdown coming

[hanera]

@marcus335

I think the market keeps going higher but don’t confuse an increasing market with economic growth.

This is not a good sign and in fact is the definition of bubble.

[hanera]

@Jil

With this kind of economy, FED will not increase rate. If they do, DOW will dive back to 10000 easily to create issues like year 2008!

What if FED does? Are you fast enough to avoid the debris?

[hanera]

@sheriff

Companies should be buying back stocks. When companies issue stock options, they dilute the value of the stock that their shareholders already own. By doing a buyback, they are basically return the stock to its rightful value.

Apple buybacks more than that. In fact, it has bought back enough shares to compensate for the dilution of EO and RSUs for the past 20 years. I have to wonder what the fxxk for. No good M&S targets? Invest in more companies like Didi

[Jil]

@hanera

What if FED does? Are you fast enough to avoid the debris?

First, I will sell all my stocks, closing my eyes, at market sell. Cash it ready for next real estate opportunity.

I recently paid off one rental mortgage to have good positive cash flow. I may regret paying ahead !

[marcus335]

How did the wars cause the real estate collapse? By highest point, you mean the dotcom bubble?

It was Clinton’s administration who pushed HUD into subprime and lowering freddie/fannie standards. That’s the origins of the housing bubble. There’s a reason those people were considered subprime. They had a history of not paying bills on time and defaulting. It’s no surprise they ended up default on their mortgage in high numbers. Subprime mortgages defaulted at 3x the rate of conforming mortgages.

Clinton signed the repeal of Glass-Steagall which deregulated the banks.

It’s funny they only show recent presidents for economic growth. We didn’t even have an income tax until 1913. When it started, only 7% of people had to pay it and the most popular rate was 1% of income above the equivalent of $75k/yr today. Government spending was <5% of GDP. Government spending didn’t really change until WW2. That’s when the tax base was increased to 64% of people, and government spending shot up to 20% and didn’t go down after the war. We’ve been running massive deficits and growing slower ever since.

[hanera]

@marcus335

We didn’t even have an income tax until 1913

Wow. And now higher than UK?

[manch]

@marcus335

We didn’t even have an income tax until 1913.

Women could not vote in 1913, and Jim Crow laws prevented many blacks from voting. We didn’t have social security, certainly not Medicare or Medicaid.

In short, our country has come a long way since 1913.

[MM_HH]

@sheriff

@MM_HH

@marcus335

GDP is a measure of economy not the stock market. The economy sucks. Also, corporate profits are decreasing not increasing.

Our economy is on life support with low interest rates. We have been in an earnings recession for 5 quarters (Market Watch). Many stocks are going up because of stock buy backs. Corporations can borrow money cheap (Corporate Debt Ballooning) since interest rates are crazy low and then buy back their stock to artificially inflate the price. If rates go up in Dec, stocks & housing will be in trouble.

Companies should be buying back stocks. When companies issue stock options, they dilute the value of the stock that their shareholders already own. By doing a buyback, they are basically return the stock to its rightful value.

I’m sure there are some situations where a buy back is warranted. But in today’s market it being way overused. Rather than using debt to invest in the growth of their business, many companies are using it for buy backs to boost their ratios and stock price. This means overinflated stock prices, underinvestment in the US economy and more risk to the company during the next downturn.

[marcus335]

Are we better off for income taxes though? We also didn’t have debt back then either. Now we have a debt that’s bigger than our economy and by 2032-2041 those 3 programs you mention and interest on debt will consume all tax revenue. That doesn’t sound like freedom. As a country, we’ve become indentured servants, and we’ll never earn our freedom from the debt. Household debt is also at near historic levels. It was only higher before the 2008 financial crisis. Is the middle class really better off when most of their life is spent working to payoff debt and taxes?

It’s ironic people think the country was founded on equality, inclusion, diversity, etc. The country was racist, sexist, and classist. Slavery was allowed. Women couldn’t vote. Only property owners could vote. People really romanticize the founding.

[manch]

I was debt free before 2011. In 2011 I took on a mortgage, bought a house, and have not looked back since. Now I am more indebted than ever but I am also happier than ever.

The federal debt doesn’t bother me much. There are many more pressing problems.

US is a pretty young country. Median age is around 37 years old. If you map it to people that’s prime working age. We should take on much more debt to invest in ourselves. At 37 years old the peak is still ahead of us instead of behind. Thanks to immigration our aging trend is also much more benign than other advanced economy. I’d much rather invest heavily in our own present and future citizens.

[manch]

@MM_HH

This means overinflated stock prices, underinvestment in the US economy and more risk to the company during the next downturn.

It’s really not up to the companies I think. Demand is pretty weak so the rational thing to do is to hold back. We are slowly picking up steam though.

[Jil]

@marcus335

How did the wars cause the real estate collapse? By highest point, you mean the dotcom bubble?

It was Clinton’s administration who pushed HUD into subprime and lowering freddie/fannie standards. That’s the origins of the housing bubble.

You are conveniently forgetting Mr.Bush and his tenure !

Bush would have removed those program during his 8 years tenure, right? Exact blow up happened during the 8 years of Bush Administration. Since he was focusing US wars, spent lot of tax payers money, he did not even bother about local economy and real estate burst. Finally and graciously accepted intelligence failure !

Simply he drove the economy and made it like TOTALED CAR in 2008 !

[Terri]

@Elt1

I am seeing plenty of signs of a slowdown. …Rental glut is driving down highend rental prices…Highend glut of houses and condos…The exburbs even are showing signs of softing…Have sold 5 of my Stockton houses…The Sixth one is seeing a price deduction. .Time of year, election uncertainty. …Wait till spring to confirm it…But a friend who manages 450 luxury apartments in SF and his wife who is a South bay realtor say the slowdown is upon us…

Thank you for sharing this information. Very good to have.

[Elt1]

Slowdown hasn’t happened yet

[hanera]

Not Spring yet.

[Elt1]

Looks like very low inventory and still high demand…Spring buying season officially starts the week after Super Bowl…less than one month

[Jil]

@Elt1

Looks like very low inventory and still high demand…Spring buying season officially starts the week after Super Bowl…less than one month

This year, corp tax rate reduction will boom US economy even though FED is applying rate hikes.

With the way stocks are jumping over Trump’s win, I really do not see slowdown next 2-3 years.

[hanera]

@Jil

With the way stocks are jumping over Trump’s win, I really do not see slowdown next 2-3 years.

Stock market is a leading indicator… Trump is not in office yet… Dow is not over 20k yet… People are getting complacent… we shall see…

[manch]

Buy the rumor sell the news. Expect sell off after Trump takes office.

[hanera]

@manch

Buy the rumor sell the news. Expect sell off after Trump takes office.

Depend on what he said on Jan 20. If no mention of repatriation and lower corporate tax, most likely sell the news.