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When Do You Think We Will Have the Next Economic Recession?

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VacationForever

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I do not want higher corporate tax rates. I would like to eliminate California state tax. The new tax bill has screwed us royally because we have a lot of state taxes and property taxes that are not longer deductible. However, interest rates are the only way to control the economy. So yes, I feel interest rates should be higher.
You know there is no way California will eliminate state tax, let alone reduce it. There are too many social programs that need tax dollars to support.

Several years ago, I interviewed a young lady, my guess would be she was in her early 20s. She said she was originally from Texas and had lost her parents. She said at the age of 15, she was living out of a car and social workers advised her to point her car in the direction of California and she would be taken care of. Not to get political, but California attracts people who are in need and these social policies don't come free.
 

Brett

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I am pro-business. I do not want higher corporate tax rates. I would like to eliminate California state tax. The new tax bill has screwed us royally because we have a lot of state taxes and property taxes that are not longer deductible. However, interest rates are the only way to control the consumer spending, inflation and bubbles. So yes, I feel interest rates should be higher.

so you want to eliminate state taxes and lower corporate taxes ... to maybe to. ~ 0 %
and the federal budget deficit keeps gets higher and higher
and then state budget deficits get higher and higher
.
any connection between borrowing and budget deficits and government revenue ?
or do you believe in the "free lunch" for everyone?
 

Panina

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I would like a lot of things. You would probably be best to start asking people to get off the free ride program for that to happen.
There are people who legitimately need help and if things went to only people who truly needed assistance we would be able to even help them more.

Unfortunately over the years many have learned to work the system to get a free ride when they are educated, healthy individuals that can work. I personally know a few of them. I can think of five right now. So how far can my tax dollars go to supplement them, so the deficit goes up.
 

dsmrp

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Thanks everyone for your cautious tales and examples.
I talked to DH and he totally agrees he should reduce his risk by selling a good portion of company stock and buying something more conservative. Said he would look into it in a weekend or two... He spends a lot of time submitting insurance claims on behalf of our son (the care providers' offices don't do this to limit their expenses, and we don't want to change providers).

He gets a pension too and his other retirement account with company stock
is a supplemental one. He thinks now is a good time to sell stock,
cause there's no major proprietary knowledge now that could be construed as insider trading. e.g. they know of something in a product line which could affect stock price.

He doesn't work for a FANG (I had to look that one up!), but does work for a certain
brick & mortar airplane manufacturer :) Pensions are contractually defined, but I guess could be renegotiated one more time before he plans to retire ...
 

TravelTime

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so you want to eliminate state taxes and lower corporate taxes ... to maybe to. ~ 0 %
and the federal budget deficit keeps gets higher and higher
and then state budget deficits get higher and higher
.
any connection between borrowing and budget deficits and government revenue ?
or do you believe in the "free lunch" for everyone?

Don't ask me to run the USA...LOL...I'd be called Crooked TravelTime. LOL

On a more serious note, I feel state taxes are distributed unequally. It is unfair and unequal for Californians to subsidize other states. On the other hand, our high state taxes drive inflation in California and that is partially why we need to pay higher wages and everything is so expensive. For anyone who thinks this is not true, I can tell you first hand I have to charge higher rates to customers to cover all my overhead and taxes to be able to pay my employees a living wage. As a small business owner, taxes are always on my mind from an operational perspective. My landlords have the same concerns. My last landlord and my current landlord have indicated they will raise my rent if their taxes go up. In California, we are up to 13% in the personal tax rate. The average person pays 9%+. And this and property taxes are essentially non-deductible now.

I would have preferred to keep the federal income tax rate the same. I think Californians have gotten screwed with the new tax law. We continue to subsidize the USA.

I would like to see a consistent state tax rate for every state. It bugs me that several states have no state income tax and they tend to be whiners! You can't expect federal bailouts and have good local and state services if you aren't willing to pay for them. Most states have a pretty low state income tax and many have no sales tax. Everyone should be paying their fair share.

We have high wages and high housing prices but it becomes a vicious cycle when more than half of many Californians income goes to state income taxes, local taxes, sales tax, federal income taxes and property taxes. And SALT is not deductible anymore. You would think California would be doing better than it is with al the taxes and revenue this state generates.

I do think raising interest rates from what has been essentially 0% for the past 10-20 years would be helpful if the economy is as "hot" as people say. It would help cool inflation a bit. I have read the inflation is starting to erode wage increases. It would also help average people to get some return on their safe investments. In the old days, you could get 5% on CDs. Now no one even knows what a CD is!

Corporate tax rates...no strong opinion. If it truly drives investment in the USA, then perhaps it is helpful. But that remains to be seen. It does seem silly to overtax corporations. 35% was a super high tax rate for corporations, IMO. It makes sense corporations do not want to bring money back to the USA. Even 21% is high. Remember most corporations are already paying taxes on the money earned overseas. Then they pay again when they bring it back home. Unless, of course, they are in some kind of safe haven country. But I have very little understanding of how all that works, given it does not affect me and my business.

As a final comment, I do not believe in a free lunch for anyone! I think we need to balance government control, taxes and social services with an incentive to work and motivate entrepreneurs and businesses to run efficiently and provide jobs and pay a living wage to employees.
 
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tompalm

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Thanks everyone for your cautious tales and examples.
I talked to DH and he totally agrees he should reduce his risk by selling a good portion of company stock and buying something more conservative. Said he would look into it in a weekend or two... He spends a lot of time submitting insurance claims on behalf of our son (the care providers' offices don't do this to limit their expenses, and we don't want to change providers).

He gets a pension too and his other retirement account with company stock
is a supplemental one. He thinks now is a good time to sell stock,
cause there's no major proprietary knowledge now that could be construed as insider trading. e.g. they know of something in a product line which could affect stock price.

He doesn't work for a FANG (I had to look that one up!), but does work for a certain
brick & mortar airplane manufacturer :) Pensions are contractually defined, but I guess could be renegotiated one more time before he plans to retire ...

Well if he works for Boeing, he has done well and that stock has gone up a lot during the past few years. Now would be a good time to take some profits and get more conservative. Congrats to him.
 

TravelTime

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You know there is no way California will eliminate state tax, let alone reduce it. There are too many social programs that need tax dollars to support.

Several years ago, I interviewed a young lady, my guess would be she was in her early 20s. She said she was originally from Texas and had lost her parents. She said at the age of 15, she was living out of a car and social workers advised her to point her car in the direction of California and she would be taken care of. Not to get political, but California attracts people who are in need and these social policies don't come free.

Yes and it will get worse in the future with the possible new Governor who is the front runner. I hope a more conservative Governor wins - regardless of party. We need balance in California.
 

Big Matt

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I think there will be a very interesting series of events that happen over the next 30 years. A huge number of people are going to become rich through inheritance from baby boomers who die and leave a lot of their 401k money behind. Combine that with an aging work force that doesn't retire early any longer and you are going to see an elite class of people aged 55-80. These folks are going to be a very strong voting block. The country very well could change very quickly in terms of social and economic policy. We are leaning towards socialism now, but I think the events I mention will swing the pendulum in the opposite direction.
 

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WinniWoman

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I feel truly sorry for the younger generation. Gee, only 25 or less years ago a young couple could buy a house in San Fran or Seattle or Vancouver....Now, at 1.8 million and up they can kiss that dream out of the window. Not everyone can get a 150 k a year job or qualify for a million plus mortgage.

Sigh, maybe dad was right.

He said

1. In his generation expect a house and a recreation property
2. My generation gets a house
3. My kids MIGHT get a house
4. My grand kids....maybe a townhouse or condo
5. Great grand kids...probably rent.


Sent from my iPad using Tapatalk


Many of our kids are already in the rent category. Heck- we ourselves could be falling into that category.
 

WinniWoman

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You know there is no way California will eliminate state tax, let alone reduce it. There are too many social programs that need tax dollars to support.

Several years ago, I interviewed a young lady, my guess would be she was in her early 20s. She said she was originally from Texas and had lost her parents. She said at the age of 15, she was living out of a car and social workers advised her to point her car in the direction of California and she would be taken care of. Not to get political, but California attracts people who are in need and these social policies don't come free.


As does New York!
 

Brett

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I think there will be a very interesting series of events that happen over the next 30 years. A huge number of people are going to become rich through inheritance from baby boomers who die and leave a lot of their 401k money behind. Combine that with an aging work force that doesn't retire early any longer and you are going to see an elite class of people aged 55-80. These folks are going to be a very strong voting block. The country very well could change very quickly in terms of social and economic policy. We are leaning towards socialism now, but I think the events I mention will swing the pendulum in the opposite direction.

"we are now leaning towards socialism" --- so you think these old elite rich people will not like 'socialist' programs like Medicare and social security and will vote to eliminate those programs
funny how some older people literally count the days until they are eligible for medicare and social security. I suppose if the "future elite" inherit multiple millions in a roth IRA they won't care about medicare, they will just pay cash for knee and hip replacements
 

Ralph Sir Edward

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What you and others here are talking about is Day Trading. Us folks here specialize in Vacation trading. Feel free to speak and speculate. Maybe when I get to retire I can play with you.

Trading in and out once every 4 to 10 years is hardly day trading. But it is very profitable.
 

Ralph Sir Edward

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Its State Resident calculation is bad. It double counts the money for Federal jobs. The Federal spending includes the amount for Federal jobs. The amount for Federal jobs should not be counted again.
 

CalGalTraveler

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He thinks now is a good time to sell stock,
cause there's no major proprietary knowledge now that could be construed as insider trading. e.g. they know of something in a product line which could affect stock price.
.

If he is not designated as a restricted 10b5-1 senior executive, he has nothing to worry about and can trade the stock at any time (sooner the better). If he is designated as 10b5-1 (he will know because they are all over executives for this), then he should start working ASAP with a broker who can sell during the next open trading window (usually a few days after a quarterly close for public companies). He can also set up a 10b5-1 trading plan to sell the stock at designated trigger prices when the trading window is closed (like a blind trust).

Glad to see that he is taking action on this. I know he is busy, but right now this is much more important than work or a delay filing for a medical reimbursement because a sudden crash of the stock e.g. tariff regulation, international tensions, N. Korea or Iran surprises could affect the livelihood of your family for decades.

The guideline given by Bob Brinker, a financial pundit is that you should not be invested in ANY stock more than 4% of your portfolio. A company stock perhaps even less given @bogey21's scenario of too many eggs in one basket.
 
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bluehende

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Really!!

George
Yes California is a net donor state. It is not one of the top ones like NJ,NY CT but they do send more to the feds than they get back. One of a few. Their cost of living does mean they get a lot for federal programs, but their large economy more than makes up for it.
 

bluehende

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Makai Guy

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This thread is getting very close to being closed due to too much politics creeping in. The topic is "When Do You Think We Will Have the Next Economic Recession?". Let's get back to it, please.
 

vikingsholm

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The economy is a very complex beast, and every time I think I'm starting to understand it, it changes.

One theory that I tend to subscribe to though is that we now are driven more by credit and debt cycles than by the past understanding of normal economic cycles. This is a link to a series of short articles that expounds on this view. A recommended read for those who like to look behind the curtain a little further. I don't agree with all the points of view in these, nor claim to be versed enough to agree with or rebut the detailed specifics, but think that there are a lot of facts and good information here that you'll never see in the daily mainstream economic reporting.

One premise is that corporate debt has gotten out of hand and some of the shakier elements are coming due soon. Also, that easy credit in general has just become a really big issue, even post-2008 (up to 2008 or so it was most egregiously applied to housing):

First in series: http://www.mauldineconomics.com/frontlinethoughts/credit-driven-train-crash-part-1

Later in series, with links to the other prior weekly articles near the top right after the subscription plug (which can be easily ignored in each article): http://www.mauldineconomics.com/frontlinethoughts/unfunded-promises/P10

I've found these types of articles often to be correct about a lot of things, but even by their own admission, the timing to react to it is very difficult. Those of us who read these may be early in understanding (if not always savvy in reacting), because it can go on a lot longer than you think, and it often just continues until it doesn't. As others here said earlier, timing is possible, but takes a lot of work and deeper understanding of what's going on out there than most of us have time or expertise to figure out.

I will stay away from more bombastic commentary other than to say look at when the booms occur and why, when the busts occur and why, and who ends up cleaning up the messes. Then draw your own conclusions.
 

TravelTime

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The economy is a very complex beast, and every time I think I'm starting to understand it, it changes.

One theory that I tend to subscribe to though is that we now are driven more by credit and debt cycles than by the past understanding of normal economic cycles. This is a link to a series of short articles that expounds on this view. A recommended read for those who like to look behind the curtain a little further. I don't agree with all the points of view in these, nor claim to be versed enough to agree with or rebut the detailed specifics, but think that there are a lot of facts and good information here that you'll never see in the daily mainstream economic reporting.

One premise is that corporate debt has gotten out of hand and some of the shakier elements are coming due soon. Also, that easy credit in general has just become a really big issue, even post-2008 (up to 2008 or so it was most egregiously applied to housing):

First in series: http://www.mauldineconomics.com/frontlinethoughts/credit-driven-train-crash-part-1

Later in series, with links to the other prior weekly articles near the top right after the subscription plug (which can be easily ignored in each article): http://www.mauldineconomics.com/frontlinethoughts/unfunded-promises/P10

I've found these types of articles often to be correct about a lot of things, but even by their own admission, the timing to react to it is very difficult. Those of us who read these may be early in understanding (if not always savvy in reacting), because it can go on a lot longer than you think, and it often just continues until it doesn't. As others here said earlier, timing is possible, but takes a lot of work and deeper understanding of what's going on out there than most of us have time or expertise to figure out.

I will stay away from more bombastic commentary other than to say look at when the booms occur and why, when the busts occur and why, and who ends up cleaning up the messes. Then draw your own conclusions.

I haven’t read the article yet but I agree easy credit has been a huge problem since the 2000s. That fueled the housing boom because then banks were able to structure subprime loans with low interest rates to get people with bad credit into homes as well as many people got in over their heads with 3 and 5 year mortgages that exploded after the intro period. I know there were many other complicating factor that enabled a perfect storm. I believe the housing boom was really consumer driven because of absurdly low interest rates. Low interest rates then unable the creation of new mortgage products. This is why I commented earlier that it would be wise for interest rates to increase. In 2005, I thought interest rates should go up to stop the boom. Then in 2008+, we needed to maintain low interest rates to prevent aother Great Depression. Instead we were lucky and only got as Great Recession. Now it is time to end the party...the questions is when and how will it end? No one knows but it has to end. I just hope we have a soft landing this time.
 
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Panina

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I haven’t read the article yet but I agree easy credit has been a huge problem since the 2000s. That fueled the housing boom because then banks were able to structure subprime loans with low interest rates to get people with bad credit into homes as well as many people got in over their heads with 3 and 5 year mortgages that exploded after the intro period. I know there were many other complicating factor that enabled a perfect storm. I believe the housing boom was really consumer driven because of absurdly low interest rates. Low interest rates then unable the creation of new mortgage products. This is why I commented earlier that it would be wise for interest rates to increase. In 2005, I thought interest rates should go up to stop the boom. Then in 2008+, we needed to maintain low interest rates to prevent aother Great Depression. Instead we were lucky and only got as Great Recession. Now it is time to end the party...the questions is when and how will it end? No one knows but it has to end. I just hope we have a soft landing this time.

I sold real estate during the time of easy loans for a luxury builder. I remember people who had great credit ratings getting approved for loans they really couldn’t afford from day one. There was no income/savings cushion for anything such as fixing a car, a gift for someone, etc. Many customers came in with pre approved mortgages.

When I saw these situations I always advised my customers they really couldn’t afford these homes. Most got mad at me as I charted out income/savings versus expenses accusing me of many things. Many after going home and going over the numbers called or came back in thanking me as they really didn’t realize they could not afford it.

I never would sell a home to someone I knew could not afford it. I educated them on what they could really afford. It always upset me tremendously when other agents didn’t care and took any deal that could be made.
 
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CalGalTraveler

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Prices in SF Bay Area have continued to climb based on a report today.

We have just put our house on the Market (SF Peninsula). Ranch style - 3Bd/2Ba - 2000sqft... (basic home) listed at $1.8M (as is).

Now fingers-crossed no economic downturn or major earthquake in the next month.

I personally think the affordability index has been reached for our area.
Of course they have been saying this since the 1970s...


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Smart move. It is a good time to do this before rates get too high and market downturns.

We have about six friends and work colleagues nearing retirement who are "cashing out" their homes in the SF Bay Area and moving to less expensive locales. Many are taking north of $1 million off the table for retirement by selling their basic tract home that they purchased in the 80s and 90s for $250 - $600k. 3 of our friends are independent consultants who can work from anywhere but still support clients in the area.
 
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lizap

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Prices in SF Bay Area have continued to climb based on a report today.

We have just put our house on the Market (SF Peninsula). Ranch style - 3Bd/2Ba - 2000sqft... (basic home) listed at $1.8M (as is).

Now fingers-crossed no economic downturn or major earthquake in the next month.

I personally think the affordability index has been reached for our area.
Of course they have been saying this since the 1970s...


Sent from my iPhone using Tapatalk

Wow. In our area, your home would likely sell for around 200k.
 
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