Investing Thread

[The Sultan]

Well if that's the case, we are going to be in for some troubles in the next decade or so, because they number of people exiting the workforce via retirment is going to WAY exceed the number of people entering.  Just looking at a simple demographic chart will show that.

It would be great for our economy if we had a better immigration policy right now.

[TSmith34, Inc.]

Well if that's the case, we are going to be in for some troubles in the next decade or so, because they number of people exiting the workforce via retirment is going to WAY exceed the number of people entering.  Just looking at a simple demographic chart will show that.

It would be great for our economy if we had a better immigration policy right now.

Right, there is already a worker drought in many, many positions. The "they're coming to take our jobs!#$!" fear and loathing approach is such bullshit

[MUBurrow]

I find that line of thinking to be pretty reasonable.  I'm far from someone who will excuse away poor policy and Fed strategy over the years.  I think governments (the US as much as anyone) are incredibly slow to react and adjust, so setting up the country for capital investment and growth in a way that was great 50 years ago but not so much today, takes far too long to correct.

I just can't rationalize some mentality of addressing current rampant inflation (or many other burgeoning economic issues which too many people aren't aware of or ignore as stated in previous posts) is some plot to further cut the legs out from the workers.  Thats just some armchair socialist conspiracy theory wet dream.

I'm right there with you. And its tough, because we somehow both need to know what the tax laws/rates will be 5 or 10 years from now, yet also need to be able to use tax policy as an economic tool.  Like, it is pretty objectively not good and not fair to the working/middle class to have a 20% cap gains rate at the same time we have 9% inflation.  But at the same time, we can't be constantly changing the cap gains rate or other investment-inducing tax policies every time inflation creeps up.  That isn't good and predictable tax policy, and it takes too long to turn the ship anyway.  At the end of the day, to course correct in a meaningful way would probably require us to choose to wear a little economic pain when things are stable - which is politically untenable so I'm just shaking my hand at a cloud.

[4everwarriors]

Gas price is up 70 cents at my neighborhood gas station since Sunday. I'm good with it and then some, hey?

[Lennys Tap]

So the time period in which parents were directly responsible for the reading, writing, adding and subtracting education their child received was a failure?

I'm shocked.

LOL I thought the government/teacher's unions sold us on virtual learning. Who knew the abdicated and went all in on home schooling?

[Uncle Rico]

Gas price is up 70 cents at my neighborhood gas station since Sunday. I'm good with it and then some, hey?

What is your local congressperson doing to help alleviate that?

[tower912]

I agree we are going to have to loosen up immigration in order to replace the workers retiring over the next decade.

[forgetful]

Forgetful...You're a smart guy, but are you f'ing serious?  You really think everything is superb, domestically and globally, across all economic categories and this is just some conspiracy to crush the poor?  Come the hell on.  I'm not excusing a hapless Fed, but there is some GNARLY structural issues with the economy.  Its not some money grubbing nonsense.  But sure, lets get to 8-10% inflation that won't harm the lower classes at all!

I totally see how you thought my post was saying the bolded, and the lack of clarity is 100% on me, but I was not suggesting that there was any sort of conspiracy to crush the poor, or that everything is superb domestically or globally. Yes there are some barometers that suggest the economy is running hot, but the underlying data says a major global recession...the question is how deep it will be.

My wording sucked. I agree 100% on the gnarly structural issues with the economy. I also fault almost 15 years of reckless Fed policies contributing to the mess. It really was a perfect storm of issues that got us to where we are.

My quoted statement, was more of a reflection of who is harmed in all of this (not relating to some kind of conspiracy).

What is being done right now to fix the mess harms the poor/middle class the most, they are the ones that get doubly crushed by inflation and interest rates, and in many regards they were the ones who least benefitted from much of the reckless Fed policy over the years. My statement was more a reflection of concern/compassion for these classes as they are going to go through some serious pain in the next several years (in my opinion).

Mea culpa.

[LAZER]

Wags

I saw last week that middle class America had a once in lifetime increase in wealth over the past two years. I think lower and middle class America (my family) was given a golden ticket by the Fed. Wealthy, and especially very wealthy people always have an advantage and that is life. I believe the Fed and Treasury worked very hard to help the lower and middle class since the start of the pandemic. Crazy stock market and housing helped many Americans feel a lot wealthier than they did pre-pandemic. I still believe the wealth effect is a major reason for the inflation we are experiencing today.

Does the stock market and housing really benefit lower/middle class?

[The Sultan]

Does the stock market and housing really benefit lower/middle class?

Middle class?  Sure...if you include 401(k)s.

[Goose]

Lazer

Middle class America saw an almost $200k increase in their net worth during the pandemic. I am sure what the classification for middle class is, but many Americans' saw a nice boost to their nest egg during the pandemic.

[TSmith34, Inc.]

Does the stock market and housing really benefit lower/middle class?

The fact there is a question whether the stock market and housing benefit middle class people pretty much indicates there is a problem, no?

[JWags85]

I totally see how you thought my post was saying the bolded, and the lack of clarity is 100% on me, but I was not suggesting that there was any sort of conspiracy to crush the poor, or that everything is superb domestically or globally. Yes there are some barometers that suggest the economy is running hot, but the underlying data says a major global recession...the question is how deep it will be.

My wording sucked. I agree 100% on the gnarly structural issues with the economy. I also fault almost 15 years of reckless Fed policies contributing to the mess. It really was a perfect storm of issues that got us to where we are.

My quoted statement, was more of a reflection of who is harmed in all of this (not relating to some kind of conspiracy).

What is being done right now to fix the mess harms the poor/middle class the most, they are the ones that get doubly crushed by inflation and interest rates, and in many regards they were the ones who least benefitted from much of the reckless Fed policy over the years. My statement was more a reflection of concern/compassion for these classes as they are going to go through some serious pain in the next several years (in my opinion).

Mea culpa.

Appreciate the clarification.  We're much closer to the same page.  I sort of echo Goose's post above.  Some situations are naturally going to benefit the wealthy more.  And often with recessions, sometimes the levers you pull will hurt some, but the alternative is a far more enduring issue that hurts everyone.  Recession fixes or prevention that also strengthen the poor is far above my pay grade.

[LAZER]

Lazer

Middle class America saw an almost $200k increase in their net worth during the pandemic. I am sure what the classification for middle class is, but many Americans' saw a nice boost to their nest egg during the pandemic.

Can you share where you found this $200k figure? I think the definition of middle class is important...I remember seeing some surprisingly low numbers for middle class retirement savings and net worth

[Goose]

Lazer

I will try and find the link, but it was a Bloomberg article and the headline said something like once in lifetime wealth accumulation coming to end for middle class America.

There is no doubt that many middle class people are woefully behind in retirement savings. Mind you, the article started the uptick from the 2020 low in the market until sometime mid summer 2022. I have said many times on here, you could not have lost money in stock or housing market if you tried for the two year time period.

[forgetful]

Can you share where you found this $200k figure? I think the definition of middle class is important...I remember seeing some surprisingly low numbers for middle class retirement savings and net worth

I was confused by that also. Most definitions I see, say the average net worth for the middle class is between ~$44k-$200k, so unless they were also substantially in the red, they weren't getting $200k increases.

I think this is an example of people and publications grossly misunderstanding who is middle class.

[The Sultan]

According to this, the median net worth of those in the top 20% is only a shade over $600,000.

https://www.thebalancemoney.com/american-middle-class-net-worth-3973493

I think this is an example of people and publications grossly misunderstanding who is middle class.

This. Exactly. I think many people are way further up the ladder than they realize.

[Hards Alumni]

According to this, the median net worth of those in the top 20% is only a shade over $600,000.

https://www.thebalancemoney.com/american-middle-class-net-worth-3973493


This. Exactly. I think many people are way further up the ladder than they realize.

And way further down as well.

[MUBurrow]

Aided significantly by the fact that most financially-focused publications (thinking Bloomberg, Forbes, CNBC, Fox Business, etc.) all get their bread buttered by advertising targeted at upper class folks who consider themselves closer to the middle than upper class.

[Goose]

If the average net worth is accurate in the article shared, we are in big time trouble as an economy and a country. I have very hard time believing those numbers, but that is my opinion. If they are accurate, we will not have housing shortage for long.

[tower912]

There will be a housing shortage as long as the number of houses built fails to keep up with population growth.

[Goose]

Tower

There will be no housing shortage if people cannot afford to buy one. Sadly, I believe that the housing market is looking at a very serious situation. I am on several email lists for condo/house for sale in SW FL and the mid range is reducing pricing weekly. I have seen one condo in Sarasota drop the price three straight weeks. They are not a pre pandemic pricing but down 15-20% at the moment.

There will be price range/markets that hold up better than others, but I think there is going to be bargains to be had in next 12-18 months. The cost of homes has been artificially propped up by free money and those days are gone.

[tower912]

Goose, upper class and boomers owning multiple homes is a contributing factor (not the only one or even biggest) to the housing shortage.   So, the situation you describe in Sarasota (vacationed on Lido Key multiple times, noticed empty high rises all of them) can also be seen as an opportunity, not just a crisis.

[Goose]

tower

There has been great opportunities with free money from the banks. I believe you will see boomers that have two places decide to downsize to one and pocket the money. I think everyone forgets that we have lived in fantasyland since the Great Recession. This has not been a normal economic time in our history and think people have blinders on. I have said it many times, I am extremely thankful that my kids have not overpaid for a house in the past 30 months.

[tower912]

Yes, we are now facing challenges that we haven't faced in a generation.  Ways have always been found and they will be found now.   After the requisite hand wringing and kvetching.   

If the boomers sell off their second homes and pocket the money, the housing crunch eases and their kids end up with a few extra shekels in a decade when the boomers pass away.