Just joking about my "omniscience," as only Nostradamus Priapus can claim that. But seriously, I believe in September I suggested the economic signs were looking up, and the latest data on Consumer Confidence (a key barometer, as consumer spending is the biggest driver of the US economy) shows it's continuing. Consumer spending for Christmas was strong. Applications for unemployment were up slightly but the four week average is around 375,000, which is consistent with steady job growth. Even contracts to buy homes were up slightly in Nov. The markets have recovered enough so that people feel a bit more comfortable.
Of course, there is still a great deal of global weakness, especially the Eurozone. But unless something comes along to upset the apple cart (always possible), the economic signs are good for 2012. The political implications of this are obvious.
-- Modified on 12/29/2011 11:21:21 AM
There are so many things that can happen.
No. 1 Hormuz - It borders on an act of war to threaten to close international water ways. It is something like 30 miles wide and if there are 7 planes left in the Iranian air force, it could be shut down. I don't even want to Google how much oil goes through there. Could gas prices reach $7?
Europe is so far from resolved. The new Mini-Mi in S. Korea.
CA is in the terlit. Maybe we can sell Hearst Castle.
Even the current climate is iffy. Unemployment is partly measured by people applying, not counting those who gave up. (For all you tax raisers, just remember that Chicago is so far in the hole they had to give the Merc a break to stay in town. The irony is that they need the rich so much, they got exemptions, leaving the burden on the middle. That worked out well, didn't it?"
so the GOP will win big in '12 ?
If I'm wrong, my humblest apologies------
If I'm wrong, my humblest apologies------
I am not hoping for a bad economy, although even if there is a temporary boost to get Pres O through 2012, I think the US would be worse off in the long run.
However, I would like a recovery as fast as possible. When I list in this and other posts the dangers, it is not a wish by any means. However, I see it as a possiblility that Iran may try and shut the Straits of H.
Believe me, although I don't like to drive, anc comute 75 feet to work, I don't want to pay the price of gas that they pay in Europe. I do not want to pay twice as much to take my next vacation.
My gloom is not a desire.
If I'm wrong, my humblest apologies------
Prop 13 is a red herring. The important question is how much the state takes in as a whole in relation to its population, not where the money comes from.
CA is one of the highest tax states in terms of money taken per capita. The fact that we don't take in more from property tax is made up by the fact that we take in more from sales, income and other taxes.
For example, I believe Oregon does not have a sales tax. CA does, up tp 10%. So the money we don't get in property tax, we get in sales tax.
Likewise, Conn used to have a very low income tax rate (maybe none, but I am not sure).
The people who want to repeal Prop 13 want to tax both and everything, while most states do not and get by.
Likewise Prop 13 did reduce government income as much as people say. The reason for that is property is assessed anew each time it is sold. Most houses in CA are owned for 7 years, so it is a small number that are taxed at the old rate. Probably at least 80% of the people that I know moved within the last 7 years, so their property taxes are not low, even if the rate is. In L.A. a $700,000 is not a bargain. There are countless numbers. If the state is getting a low rate on $700K it gets more than Oregon where it may have a higher "rate," but a lesser value. Get the L.A. Times real estate classifieds and see what things sell for and calculate the taxes taken in.
In 1983 I bought a house for $180. That house has sold three times for over $700 since 1989. Thus the tax base that the gov received for that house has gone almost 400%. Most of the houses on that street have a similar story, so that street has increased gov income by hundreds of percents, even if 4 or 5 houses are "undertaxed."
There are dozens of other taxes that CA has. L.A. has a business income tax, and has for decades. Many other cities out of CA do not. Why does L.A. need both income and property tax increase?
I will make a deal: People agree to take in the average tax rate, per capita of the middle 40 states in high v. low tax rate, and you can include the income source as an abolished Prop 13, but lower the sales tax to Oregon levels.
-- Modified on 12/30/2011 7:46:22 AM
The economy, though recovering, is precarious.
Most jobs being created are low level jobs. When you add unemployment to underemployment, etc. -- it's a lot of the population. 51% of wage earners earn so little they don't even pay income tax.
41% of every dollar the feds spend is borrowed.
If the 400 richest Americans were machine-gunned, their bodies thrown into a pit and their income seized, it would only be enough to run the government for a few days, so you can't tax the rich enough to make up for the shortfall.
Every government program has a voting constituency. Even when we had a republican Prez and republican Congress, government spending INCREASED. Democratically elected politicians are incapable of cutting spending.
At a total debt of $13T + , we are quickly approaching a point that will make people nervous about our ability to repay. We will soon HAVE to balance the budget.
Okay -- if we are borrowing 41% of what is spent, that means my current taxes are only at 59% of what they would need to be in order to fund the government. So my tax rate of 39% would need to be 66.1%.
Okay -- 51% earn too little to pay taxes. They have Jack Schitt for discretionary income anyway. Though en masse they are economically important, their primary demand is for necessities -- food, shelter, used cars and things like that.
We've already discussed that even seizing 100% of the income of the wealthiest would do no good.
They have to tax ME and people in a similar tax bracket -- which is most men on this board. And our tax rate has to go from 39% to 66% to balance the budget because the budget can't be cut.
WE have disposable income. You know this because we spend it on escorts -- talk about blowing money! LOL But WE are the people who drive the economy, the new jobs, the investments and so forth in aggregate.
What is raising our taxes from 39% to 66% going to do? It's going to give us the same level of discretionary income as those who pay no taxes: zilch.
And that means you can stick a fork in this economy: it's DONE. Because that is going to be a massively destructive thing. And the sort of thing perfect for a lame duck communist like Obama.
Unless, of course, the politicians surprise me, which I doubt.
but they have nothing to do with the present state of the economy or whether or not the current expansion continues. Of course, if we cut spending or increase taxes, that can slow things down. But neither of these things will happen before the 2012 election because the current Congress can't agree on anything relating to taxes or spending. They will just kick the can down the road to the next Congress.
And because I am betting they will kick that can down the road until they try to inflate themselves out of the hole, I've been buying stock in copper mines and things like that.
That doesn't make much sense.
... to try to inflate themselves out of the mess instead of tax themselves out of it.
Whenever there is that sort of inflation, the price of raw materials keeps pace. It's not a winner, but it doesn't lose.
Obviously, that's not the only thing I buy. For long range, I have a lot of oil stocks because I expect the long-term trend to be for higher prices even if the economy sucks because people have to have it. I'm earning about an 11% dividend on one tobacco company's stocks. I own those stocks because their product is addictive so it weathers recessions well.
You get the idea. I bet all sides somewhere and in aggregate I always win. I wish I had known about trading stocks in high school.
It's an industrial metal, and if the global economy is stagnant, so is copper. More specifically, as China goes, so does copper. Just overlay copper with the Hang Seng Index and you'll get your answer. Plus look at FCX, Vale, SCCO prices. Not a pretty picture. Now, if you are just trading and not investing, then maybe a bounce is possible in the 1st half of 2012. But the rest of the world isn't doing well right now including China, and the price of copper, as well as the stocks of companies that produced it are priced accordingly.
What tobacco stock is paying 11%? Hope you are not smoking their product. I have Altria, and it's not even close to 11%, and neither are its competitors. Now MLP's are great investments.
Sounds like you follow Jim Rogers.
What tobacco stock is paying 11%? Hope you are not smoking their product. I have Altria, and it's not even close to 11%, and neither are its competitors. Now MLP's are great investments.
Sounds like you follow Jim Rogers.
icki, you seem to cotradict yourself:
"""the points you make about taxation and our national debt are valid...but they have nothing to do with the present state of the economy or whether or not the current expansion continues. Of course, if we cut spending or increase taxes, that can slow things down"""
I agree, John's points are valid and you seem to ackowledge whatever growth were are having is coming at the expense of fiscal matters and that Obama will benefit from it. If that's what you mean I agree. If not, clarify...
The size of the national debt, and the issue of whether or not to increase taxes on the wealthy have nothing to do with whether the economy will stay strong during 2012. I'm using that time frame because my original post in this thread had to do with the state of the economy now and moving toward the election. The national debt and taxation issues won't have anything to do with this short-term period. Long term, of course they matter. But nothing will be done about them in the months before the election and it won't have any impact on the economy during that time.
When you're disposable income plummets, expenditures on escorts will too, driving the standard prices way down to BP special levels.
... because I'm not hobbying due to the unintended attachment of a girlfriend.
Things ain't great, but they are getting a bit better, irrespective of all the crap going on around the world. We seem to be the best house in the worst neighborhood. As long as their is marginal improvement, and with no help from Obama, he will get reelected. I do wish he would get off his ideological soapbox, and be a bit more logical, especially with his decisions (see Keystone Pipeline). He could make his reelection so much easier, but then again he has to pander to the assholes on the left, while the GOP candidates pander to the assholes on the right. Maybe there is a part of me that hopes he gets elected so MSNBC would FUCKING STOP showing those really stupid "Lean Forward" commercials on CNBC. Nothing like being schooled in the inequities in life by a lesbian, black, socialist and a fat person. I left out Matthews. I didn't know what category to put him in other than turd.
No matter what we do or who we elect. The debt is $17T and growing. It will eventually sink us. There is no amount of growth or taxes which will stop this. Maybe at this point the best way out is depression with deflation.
It will probably come to that somewhere down the road.
The economic data and numbers we are getting right now looks a little better but this is the year end bounce. We get it every year when funds rebalance.
As for buying copper, I don't understand that. Copper is an industrial metal used in manufacturing. If the economy is going to go down the demand for copper will go down along with the price. I can see oil or gold, although I don't trade gold.
Buy large international industrials which pay a decent dividend. That's what I do anyway.
Tobacco. Addictive product -- I am getting an 11% annual reinvested dividends in the midst of a danged recession. I don't smoke myself, but I'm pleased that others do. Now I just need to get stock in a company that makes those oxygen tanks people carry around.
Another good one for me has always been water. People don't stop bathing in recessions either. Again, consistent dividends.
The copper (actually, stock in well-performing mining companies that mine copper) is a bet that the status quo is going to try inflating their way out of debt. If they try inflating, at least initially, copper will hold its value at the rate of inflation or pretty near.