Bull market, how long for?

economic

redux wrote: »

You may find it comfortably easy to dismiss this as left wing propaganda, but news agencies such as Bloomberg, Forbes, Fortune and Newsweek aren't usually put in that category.

Lawmakers scrambling to lock up Republican support for the tax reform bill added a complicated provision late in the process -- one that would provide a multimillion-dollar windfall to real estate investors such as President Donald Trump.

The change, which would allow real estate businesses to take advantage of a new tax break that’s planned for partnerships, limited liability companies and other so-called “pass-through” businesses, combined elements of House and Senate legislation in a new way. Its beneficiaries are clear, tax experts say, and they include a president who’s said that the tax legislation wouldn’t help him financially.

“This last-minute provision will significantly benefit the ultra-wealthy real estate investor, including the president and lawmakers on both sides of the aisle, resulting in a timely tax-reduction gift for the holidays,” said Harvey Bezozi, a certified public accountant and the founder of YourFinancialWizard.com. “Ordinary people who invest in rental real estate will also benefit.”

James Repetti, a tax law professor at Boston College Law School, said: “This is a windfall for real estate developers like Trump.”

https://www.bloomberg.com/news/articles/2017-12-18/trump-real-estate-investors-get-last-minute-perk-in-tax-bill

Or

https://www.forbes.com/sites/danalexander/2017/12/18/president-trump-could-save-11-million-a-year-from-new-tax-bill/#2f0ad6b02337

“Ordinary people who invest in rental real estate will also benefit.”

I said either left propaganda or headlines. In this case its headlines.

Its very convenient to have just one line saying ordinary people will also benefit. Where are all the numbers to suggest how much the ordinary average real estate investor will benefit? All i see is poor journalism only focusing on trump, because of course that gets all the headlines these days right?

iro

At what point do US Treasuries represent good value?

Currently the 10 Year is on 2.44% with a gently positive curve out to 30 Years at 2.77%, given the likelihood of a significant deficit (at least in the short term) this would appear to still be pricing in the asset repurchases of recent years.

With annualised CPI in the US at 2.2%, arguably the return in US Treasuries does appear better in real
terms than European Bond markets.

What level of US yields represent an opportunity?

Is it worth waiting for a few more Fed moves on rate rises/asset unwinding possibly until the curve flattens or inverts?

Any ideas gratefully received?

BananaRepublic

Voyager2002 wrote: »

The cost of providing state pensions is a good deal greater than the income from NICs that supposedly pays for them. (And note that when politicians refer to the total "Welfare" bill, pensions make up the bulk of the figure they quote.) So the vast maority of us benefit from funds paid in taxes, just as most of us do when we go to see a doctor trained at the tax-payer's expense.

The state pension system is a mess since as you say, today’s payments simply pay today’s pensions. There is no investment. And we have an aging population which means we will be in trouble as there will not be enough money.

iro

We do seem to be getting a little sidetracked!

reeac

BananaRepublic wrote: »

The state pension system is a mess since as you say, today’s payments simply pay today’s pensions. There is no investment. And we have an aging population which means we will be in trouble as there will not be enough money.

I've always thought that if it's possible to apply it then the system where current pensioners are paid using the pension contributions from current employees is simpler and more efficient than the SIPP/pension pot system where fees associated with the hefty capital sums involved will eat into those sums. Yes, we have an ageing population but then that will apply whichever system is used ....there's no "magic money tree" either way.

chucknorris

BananaRepublic wrote: »

The state pension system is a mess since as you say, today’s payments simply pay today’s pensions. There is no investment. And we have an aging population which means we will be in trouble as there will not be enough money.

I think that the recently introduced mandatory enrolment in employer's pension schemes and the extension of age when you can draw the state pension are probably the first moves of many from the Gov. I don't think that it will ever be abolished, but I can definitely see the inflation indexation disappearing at some point, which would give people plenty time/warning to prepare (but of course not everyone will) as well as solve the 'non sustainability' problem eventually.

A_T

UK state pension is one of the lowest in the developed world. Countries with smaller economies pay higher pensions.

The UK can well afford a good state pension - it's a question of whether the political will is there.

chucknorris

A_T wrote: »

UK state pension is one of the lowest in the developed world. Countries with smaller economies pay higher pensions.

The UK can well afford a good state pension - it's a question of whether the political will is there.

Afford? Is that the correct criteria to commit to expenditure? I could afford to buy many Aston Martins, but guess how many I actually have, correct: none. Why should rich people receive the state pension? My answer would be fairness, after all they paid for it, but you can't get away from the fact that if we all receive it, then it is not sustainable in the long run, for everyone.

redux

economic wrote: »

“Ordinary people who invest in rental real estate will also benefit.”

I said either left propaganda or headlines. In this case its headlines.

Its very convenient to have just one line saying ordinary people will also benefit. Where are all the numbers to suggest how much the ordinary average real estate investor will benefit? All i see is poor journalism only focusing on trump, because of course that gets all the headlines these days right?

There might be a slight difference between what is great for ordinary people who invest in real estate and what is great for ordinary people in general.

If ordinary people in general see a reduction in how much they can claim their mortgages against their tax bill, this might have certain effects. There are predictions of reductions in house prices or in the proportions owning their own home. Maybe it isn't a bad thing long term, but meanwhile this can affect Trump's supporters.

BananaRepublic

reeac wrote: »

I've always thought that if it's possible to apply it then the system where current pensioners are paid using the pension contributions from current employees is simpler and more efficient than the SIPP/pension pot system where fees associated with the hefty capital sums involved will eat into those sums. Yes, we have an ageing population but then that will apply whichever system is used ....there's no "magic money tree" either way.

The problem with paying today’s pensioners with today’s pension contributions is that we have an aging population, and there are not enough young people paying in. Bringing in young migrants from, oh, let’s say Poland as an example plucked from thin air, is one solution but it’s not sustainable unless you continually bring in more and more migrants.

The benefit from paying into a pension fund is that it grows for decades, and hence in the long term it is cheaper. However, a country cannot do that for obvious reasons. ChuckNorris is surely correct in his assertions. The housing crisis, whereby home ownership is dropping does not help, as more future retirees will need to pay rent in addition to other costs.