Investing

[CMRivdogs]

2 hours ago, Hongbit said:

Affordability has become almost as much of a hinderance to housing as the rate.  

Skyrocketing unemployment and higher average debt to income also make it  harder for many average people to qualify.     

Seems like we're repeating 2020. This time without the virus, so far

[gehringer_2]

4 hours ago, ewsieg said:

I keep on repeating to myself that we are still largely a service economy thus the tariffs aren't as bad as many make them out to be, but we seem to be going in the direction of the doomsday economists that felt the tariffs would destroy the economy.  

Even before Trump was elected, Paul Krugman wrote a piece about the maximum likely effects of Tariffs and the proportions of the economy dependent on import/export and he basically said the same thing - a tariff regime would be counter-productive but not likely the end of the world. Of course what nobody anticipated was that it would not only be tariffs but pure chaos, and the chaos is probably having at least as much deleterious effect on the economy as the tariffs themselves.

Plus the thing this all misses is that tariffs do have an outsize effect on consumer's sense of inflation because other than food, a ton of consumer shopping is for imported goods. And as the Biden admin found out, it doesn't matter what the inflation number really is, all that matters is how it feels to voters. And that not only has the obvious political fallout but also, to the degree it reduces consumer confidence, a slowdown can become a self-fulfilling prophecy.

[gehringer_2]

3 hours ago, Deleterious said:

Our factory production is up against 2024.

considering that the real GDP increased around 45% from 2010 to 2024, the total increase in industrial production is paltry. Even the ~1.1% increase so far this year would be a loss of ground vs the estimated 2% GDP increase.

[Deleterious]

25 minutes ago, gehringer_2 said:

considering that the real GDP increased around 45% from 2010 to 2024, the total increase in industrial production is paltry. Even the ~1.1% increase so far this year would be a loss of ground vs the estimated 2% GDP increase.

I guess I sort of dropped that post in when people were discussing service industries, but that wasn't the point.  The jobs report said we lost 78k manufacturing jobs this year, and I find it interesting we are producing more even with those losses.

Plus, GDP measures dollars and the manufacturing index does not.  You can't compare those two

[Deleterious]

Important for future Michigan QB's.

 

[gehringer_2]

38 minutes ago, Deleterious said:

I guess I sort of dropped that post in when people were discussing service industries, but that wasn't the point.  The jobs report said we lost 78k manufacturing jobs this year, and I find it interesting we are producing more even with those losses.

Plus, GDP measures dollars and the manufacturing index does not.  You can't compare those two

If industrial productivity goes up 2%, and production is up 1%, then 1% of your work force is now unemployed.

Edited September 10 by gehringer_2

[Screwball]

Most of our major reports are piss poor ways to report the state of the economy. There are many faults with them all. CPI for example, and what they call "owners equivalent rent" and how it is weighted as far as the "headline" number. This holds true for all these reports - not counting the revisions. Giggle. 

This is what we, the people via the news, and retail investors get. The pigmen of Wall Street are not fooled. Remember, a mid level Wall Street bankster makes more money than the CEO of the company you work for, and by a lot. That's why he's there. He knows more about your company/industry/sector than the people running the company.

The rest of it is theater. I'm not so sure Orange Hitler isn't getting setup to take the blame for the biggest economic meltdown since the Great depression of 1929. It's a dirty job but someone has to do it. He don't give a **** - he's a showman. They all are.

We should have listened to George Carlin circa 1991. They don't give a **** about you.

[Tigeraholic1]

Inflation flat. Bring on those rate cuts!

[Deleterious]

21 hours ago, gehringer_2 said:

If industrial productivity goes up 2%, and production is up 1%, then 1% of your work force is now unemployed.

Producing more with less people.  Red meat in an investment thread.  

[Deleterious]

Inflation under 3% = rate cut

Inflation 3% = coin flip

Inflation over 3% = no cut

JP has always said it's a balancing act between inflation and unemployment.  If inflation hasn't crept up over 3% I would say unemployment is the biggest concern right now.  Especially with the previous month being revised to negative job growth.  So you need to enact policy to fight that.

Personally, I think a rate cut will be throwing gasoline on a smoldering fire and jumpstart inflation.  But you can't really run the countries monetary policy on what might happen if you do X.  You have to run it based on the date in front of you.  

 

[Motown Bombers]

What are people's thoughts on employee stock purchase plans? I was laid off from a previous employer after 13 years. Since I worked there so long, I qualified for max severance which was 26 weeks salary. Since I knew the company was collapsing, I cut expenses and saved cash. Long story short, I didn't need to touch my severance and now have a savings of about 18 months of take home salary. My reserves are good right now. This new job is about a 50% increase in salary. I doubled my contributions to my 401k. I have money to work with and was thinking about putting a little towards the company stock. It's a 15% discount. The company is very old, over 150 years old, so the stock has been stable and is not some new startup where you can expect huge gains or fluctuations. I'm not sure the tax implications. I feel essentially I would be buy at a discount and selling probably in a year or two at around the price the stock is now so essentially returning 15%. Given the uncertainty of the economy, I want to keep my reserves large and have investments that are at least liquid. I should also add that in addition to the 401k, this company offers a pension. The company puts away 4% of my salary and is guaranteed to return 3.8%. It's fully vested after three years. I never invested in these employee plans before so I'm not sure they are worth it. 

[Screwball]

3 hours ago, Deleterious said:

Inflation under 3% = rate cut

Inflation 3% = coin flip

Inflation over 3% = no cut

JP has always said it's a balancing act between inflation and unemployment.  If inflation hasn't crept up over 3% I would say unemployment is the biggest concern right now.  Especially with the previous month being revised to negative job growth.  So you need to enact policy to fight that.

Personally, I think a rate cut will be throwing gasoline on a smoldering fire and jumpstart inflation.  But you can't really run the countries monetary policy on what might happen if you do X.  You have to run it based on the date in front of you.  

 

I honestly don't know what to think about all these employment revisions. I haven't believed the numbers for a long time (and not alone). But given what I do read, I don't think they are good, and the economy is in good shape. There is probably enough in these numbers for the Fed to justify a cut (how much????) since it's one of their mandates.

On the other hand, there is the stable price part of the deal. What's that exactly? Cutting rates with the market at, or near, all time highs and under reported and poorly measured CPI numbers that contain no good news. Only to go up. But they have cut rates in environments like this before. I think they will next week. 

It will be fun to watch the tape that day to see if Blue Horseshoe knows anything early. 🙂

I also agree it will be like throwing gas on the fire. 

I've been playing the bond market for the last few years but what I see with the indexes is off the charts wild. Today - ORCL! WTF and that ain't a ticker symbol. I think Jeff Skilling would be proud.

Wait till this Hindenburg pops.

Edited September 11 by Screwball

[Deleterious]

It will be interesting to see who will be around to vote next week.

Cook is the one Trump is trying to fire and is a voting member.  She just received a judgment to temporarily block that.  So she will probably be around.  Unless they can get another judge to remove that order.

Miran will be a voting member when confirmed.  He had his hearing last week but as yet, no vote has been scheduled to confirm him.  I'm sure a vote could be scheduled in plenty of time.

Some on the right did have some concern about Miran not leaving his job at the White House.  His appointment is only until January, so I guess he doesn't want to leave his other job.  Not sure why he isn't just taking a leave of absence.  

There are extra members who are not currently voting.  Not sure if they get rotated in if some of the voting seats are not filled.  

[gehringer_2]

4 hours ago, Motown Bombers said:

What are people's thoughts on employee stock purchase plans? I was laid off from a previous employer after 13 years. Since I worked there so long, I qualified for max severance which was 26 weeks salary. Since I knew the company was collapsing, I cut expenses and saved cash. Long story short, I didn't need to touch my severance and now have a savings of about 18 months of take home salary. My reserves are good right now. This new job is about a 50% increase in salary. I doubled my contributions to my 401k. I have money to work with and was thinking about putting a little towards the company stock. It's a 15% discount. The company is very old, over 150 years old, so the stock has been stable and is not some new startup where you can expect huge gains or fluctuations. I'm not sure the tax implications. I feel essentially I would be buy at a discount and selling probably in a year or two at around the price the stock is now so essentially returning 15%. Given the uncertainty of the economy, I want to keep my reserves large and have investments that are at least liquid. I should also add that in addition to the 401k, this company offers a pension. The company puts away 4% of my salary and is guaranteed to return 3.8%. It's fully vested after three years. I never invested in these employee plans before so I'm not sure they are worth it. 

Not a lot to go on here to judge the pension but I'll comment on ESSP. I had one for a number of years. Sounds like it was a similar deal, 15% discount on the stock price. That part is free money and means almost certainly worth taking.

The down side of an ESPP is that it *can* be a lot of work on your taxes. It depends on how much of the accounting work your employer provides you with. In my case, it was zero and without that it will be a pain to track your gains for your tax returns. Plan on using a higher level version of TurboTax! When I was in the plan most of the time I spent on my taxes (including a full schedule A in those years) was spent on the ESPP. In the ESPP I was in, the actual internal stock purchase date was always the 1st day of the year but the award date was whenever the company decided - usually it was in the fall, so my taxable income from the plan was based 15% off on prices I had to go look up and track myself. The paper work they provided was the barest minimum. It was all stuff they could have provided but didn't. Once I set up a spreadsheet that tracked it all it wasn't too bad.

My plan had no hold requirement, so I could sell the shares the day I got them if I didn't like where I thought their price was going and often as not I did. And if prices were rising, i could hold the shares till they converted to long term gains and get taxed at a lower rate. The 15% discount is always regular income though - so that's one way the accounting gets complicated.

In any case, at least the 15% on the $$ I put in the pool was guaranteed if I didn't want to hold the stock so why turn that down?

 

Edited September 11 by gehringer_2

[Deleterious]

WTF Ford.  

 

[gehringer_2]

50 minutes ago, Deleterious said:

WTF Ford.  

 

Apparently for Ford, even hindsight isn't 20/20....

[Deleterious]

 

[Deleterious]

I forgot the exact number.  But jobless claims were about 265k vs 235k expected.

 

[Hongbit]

The only question now is the cut next week 25 or 50.

Edited September 11 by Hongbit

[Hongbit]

It’s mind boggling that we continue to use unreliable data to make economic decisions on the strength of our economy and everyone is perfectly fine with it.  

[Screwball]

It doesn't matter. None of these worthless pukes (The Fed or .gov) have a clue what the **** they are doing anyway (to include both fiscal and monetary side). Or, they are just doing what their owners tell them to do.

37 trillion in debt, which costs around 800 billion annually (going up) in interest (wonder what that would pay for? more war, probably) gets us the largest stock market bubble in history and record breaking homeless and starvation. Only in America. Thanks you bunch of clueless assholes.

[oblong]

14 hours ago, Motown Bombers said:

What are people's thoughts on employee stock purchase plans? I was laid off from a previous employer after 13 years. Since I worked there so long, I qualified for max severance which was 26 weeks salary. Since I knew the company was collapsing, I cut expenses and saved cash. Long story short, I didn't need to touch my severance and now have a savings of about 18 months of take home salary. My reserves are good right now. This new job is about a 50% increase in salary. I doubled my contributions to my 401k. I have money to work with and was thinking about putting a little towards the company stock. It's a 15% discount. The company is very old, over 150 years old, so the stock has been stable and is not some new startup where you can expect huge gains or fluctuations. I'm not sure the tax implications. I feel essentially I would be buy at a discount and selling probably in a year or two at around the price the stock is now so essentially returning 15%. Given the uncertainty of the economy, I want to keep my reserves large and have investments that are at least liquid. I should also add that in addition to the 401k, this company offers a pension. The company puts away 4% of my salary and is guaranteed to return 3.8%. It's fully vested after three years. I never invested in these employee plans before so I'm not sure they are worth it. 

nothing to offer except congrats on the new job.  I remember your post about when you lost your job.

[gehringer_2]

2 hours ago, Deleterious said:

I forgot the exact number.  But jobless claims were about 265k vs 235k expected.

 

300K is normally the level you don't want to see. Getting a bit close.

Edited September 11 by gehringer_2

[Deleterious]

Let the mortgage rates drop.

 

[gehringer_2]

Over/under on how many outlets report "Inflation last month rose at a 4.8% annual rate"?