Economy

[TennesseeTuxedo]

I love this little cafe in downtown Hutto.

 

[TennesseeTuxedo]

Goldman Sachs Prediction ( Doesn't mean the economy, but not good)

https://www.cnn.com/2020/02/20/investing/goldman-sachs-stocks/index.html

Nothing bad at all about a 10% correction. It's actually healthy for the markets and offers a buying opportunity.

 

[shaz]

Ya, smart money is moving from oil and hardware and financials to investing in the cloud. Should I sell my Apple stock?

No, I just bought Skyworks and you should take your beating along with me

 

[Brute 23]

The median price of a home sold in 2019 was $236,900.
So to you ex bankers and mortgage brokers. What kind of income would a couple have to have to buy this house. How much would the insurance and taxes be on it. How much down payment is it 29% now. Now for a thirty year loan what would the cost be for owning this home be monthly.

Not a banker, but step-son is in the process of buying/building a home in that price range now. It is going to take about $1825 a month to service a 20% down, 3.78% 30 year loan, taxes and homeowners association fees.....that is, until the true tax consequences are disclosed. I think they are underestimating those about $150 a month. So roughly $2000 a month in the Hutto, Texas area. Property tax rates are somewhere around 2.85%.

My concern is a lot of these people buy/ build these large house but do not contribute any thing to retirement or savings. Every thing they have goes to the house because they have been duped in to the idea that your house is an investment or think they need these large homes.

$2000 a month with 2 incomes is not bad if you are not contributing to retirement. If you are maxing out your 401k and other retirement options it's a pretty good chunk.

 

[Stocker Steve]

Building big new houses is not a sign of a booming economy. It is a sign of booming consumption.

A booming economy is when you hire people to do things that add value.

 

[TennesseeTuxedo]

Building big new houses is not a sign of a booming economy. It is a sign of booming consumption.

A booming economy is when you hire people to do things that add value.

Must be why unemployment is at a 50 year low.

 

[Stocker Steve]

Building big new houses is not a sign of a booming economy. It is a sign of booming consumption.

A booming economy is when you hire people to do things that add value.

Must be why unemployment is at a 50 year low.

Maybe or maybe they are not willing to hold any kind of a job so they are not counted as unemployed...

Unfortunately there are an amazing number of people "employed" in positions where it they disappeared suddenly, the world would still go on, and perhaps would even be better off. :shock:

There is a huuuuuge difference between collecting a check and adding value.

 

[ccr]

Don't know about naysayers, but seems like people working to build houses, roads, utilities, and adding to the local economy is adding value. If not what is adding value?

 

[1982vett]

The median price of a home sold in 2019 was $236,900.
So to you ex bankers and mortgage brokers. What kind of income would a couple have to have to buy this house. How much would the insurance and taxes be on it. How much down payment is it 29% now. Now for a thirty year loan what would the cost be for owning this home be monthly.

Not a banker, but step-son is in the process of buying/building a home in that price range now. It is going to take about $1825 a month to service a 20% down, 3.78% 30 year loan, taxes and homeowners association fees.....that is, until the true tax consequences are disclosed. I think they are underestimating those about $150 a month. So roughly $2000 a month in the Hutto, Texas area. Property tax rates are somewhere around 2.85%.

My concern is a lot of these people buy/ build these large house but do not contribute any thing to retirement or savings. Every thing they have goes to the house because they have been duped in to the idea that your house is an investment or think they need these large homes.

$2000 a month with 2 incomes is not bad if you are not contributing to retirement. If you are maxing out your 401k and other retirement options it's a pretty good chunk.

Your senecio is probably true....Thankfully my stepson is very good with his financial situation. It's not going to a problem for him to put the 20% down. Now that I'm typing this I realize the numbers above are the numbers for a 15 year loan @ 3.18%, not a 30 year. I'm thinking the 30 year payments ran about $1250.

 

[Stocker Steve]

Don't know about naysayers, but seems like people working to build houses, roads, utilities, and adding to the local economy is adding value. If not what is adding value?

So we run underground power and NG and sewer and storm water, pave the street, put up a big house for a small family, and perhaps add an in ground pool with a cabana. Nice. Could git r done for only a mil at 3.5% APR. All this counts to GNP, but, how important is this? Is this spending going to generate any future benefits? Do the GNP counters have a clue?

Borrowing lots of money at low rates to buy things that you don't need is booming consumption, not a booming economy.

More specifically - - value is what is important. I value things that keep generating returns rather than just maintenance bills. Think what you could do with a mil worth of polywire? :cowboy: Could cross fence a small state...

 

[greybeard]

Do the companies that build the house have employees that are going to be paid?
Does the annual upkeep and maintenance cost of a $1 million house = more or less than the proceeds from $1 million poly fence?
Most everything built or bought adds value...value to the economy. And that's what is being discussed..the overall economy.. not just value to the owner.

 

[Brute 23]

Not a banker, but step-son is in the process of buying/building a home in that price range now. It is going to take about $1825 a month to service a 20% down, 3.78% 30 year loan, taxes and homeowners association fees.....that is, until the true tax consequences are disclosed. I think they are underestimating those about $150 a month. So roughly $2000 a month in the Hutto, Texas area. Property tax rates are somewhere around 2.85%.

My concern is a lot of these people buy/ build these large house but do not contribute any thing to retirement or savings. Every thing they have goes to the house because they have been duped in to the idea that your house is an investment or think they need these large homes.

$2000 a month with 2 incomes is not bad if you are not contributing to retirement. If you are maxing out your 401k and other retirement options it's a pretty good chunk.

Your senecio is probably true....Thankfully my stepson is very good with his financial situation. It's not going to a problem for him to put the 20% down. Now that I'm typing this I realize the numbers above are the numbers for a 15 year loan @ 3.18%, not a 30 year. I'm thinking the 30 year payments ran about $1250.

Ya sorry. I wasnt talking about him specifically. Just kind of where things have evolved in the housing market in our country... an average of $200K+. Its just hard to grasp when I see so many of the old farm houses still standing that raised 5+ kids no problem.

 

[sstterry]

Don't know about naysayers, but seems like people working to build houses, roads, utilities, and adding to the local economy is adding value. If not what is adding value?

I agree with you, but we are not improving infrastructure at all. Our country's infrastructure is woefully inadequate. And, both parties in Washington can't get their heads out of their you know whats to fix it.

 

[Stocker Steve]

Countries that are kicking US ass don't spend all their funds on nicer cars and bigger houses and dollar stores. The government targets specific industries that they think are key to profitable future production and new skills and living wages. They help with real estate and permitting. They build infrastructure. They provide grants for training new workers. They provide short term tax breaks.

So Americans get a bigger house or a bigger pickup, and some other country gets the new job skills. Which of these economies is going to last?

 

[Richnm]

Doing better as opposed to what. Since Obama since the Recovery Act 11 years ago, the US has been on the biggest economic boom in its history. But, there has been tons of deficit spending in those years. The stock market is not a good indicator of how an economy is doing, wage growth is one thing to look at also. To be fair, we do have one of the lowest rates of unemployment in history but this to has been falling for 11 years.

What's causing the deficit spending? :hide: Is it mostly Social Security and Medicare? I don't think we spend as much % of the GDP on defense as we used to.

This gets complicated. Had the powers that be left the Social Security Trust fund alone and not raided it beginning in the 60's (both parties), it would be in great shape. But now, there is essentially no trust fund at all. It is pretty much pay as you go.

Last year we had a massive tax cut. This, of course, led to more deficit spending. The farm bailout bill (because of the China problem) is now one of the biggest in history. Congress and those in Washington like to spend like drunken sailors. How long has it been since we had a real budget? Every 6 months congress is having to raise the debt ceiling. The last administration that had a reduction in deficit spending was Clinton. Trump has proposed cutting SS and Medicare benefits, but that has not gotten much air time. But that won't solve the problem.

The Clinton Administration got the credit. But Newt Gingrich is the one who got the deficit under control.

 

[hurleyjd]

We now have the Federal Reserve Rates at about the 2017 level of 1.00 to 1.25 percent. If the economy is doing so great why the lower rate. I just wish my portfolio of stock was still at the same level as when Trump took office. I really think that the stock I own is producing products that people in America need.

 

[TennesseeTuxedo]

We now have the Federal Reserve Rates at about the 2017 level of 1.00 to 1.25 percent. If the economy is doing so great why the lower rate. I just wish my portfolio of stock was still at the same level as when Trump took office. I really think that the stock I own is producing products that people in America need.

Hurley, stop, just stop the stirring. Raven got banned for being a nuisance and you're just as bad.

The market is still up over 40% since President Trump took office. You're more than welcome to back track to 2016 levels if you wish.

Now go out and vote for your fellow socialist buddy Bernie Sanders.

 

[Sostra]

What we are witnessing has little to do with US economy. China simply got their "black swan" that showed the emperor has no clothes. Big number of zombie companies (not generating profits, supported by government banks), inflated property prices, inflated debt etc. It is coming on global economy, it is inevitable. Only the mainstream media do not want to talk about it.

 

[sstterry]

The market is still up over 40% since President Trump took office.

Dow Jones Industrial Average - Historical Annual Data Year Average
% Change
2020 -6.43%
2019 22.34%
2018 -5.63%
2017 25.08%
2016 13.42%
2015 -2.23%
2014 7.52%
2013 26.50%
2012 7.26%
2011 5.53%
2010 11.02%
2009 18.82%
2008 -33.84%

Thanks Obama! :cowboy:

Edit: The current Fed rate cut has nothing to do with anything other than Covid 19 os going to play havoc with the economy. (But according to the President it will be gone by April)

 

[shaz]

I don't see why we need a rate cut now? It is kinda nice to know rates won't be increasing. Not that the absolute rate matters to me as much as the direction.