Stingy millennials to blame for sluggish economy

Crashnburn said:
I was laid off in 2002 and it took me 5 years to find my next engineering job.

That job was eliminated at the end of 2015 and it took the better part of 2016 to find a contract that would give me the experience I would need to get another job.

That 6 month contract lasted 14 months and it took 1 month to find a new position. The company reorganized in August and I was RIF’D. I had a new job before the end of that month and recruiters are still calling me!

If the economy continues to stagnate the rest of the year like it has so far, my portfolio will only return 19% for the year. I could do with a little more stagnation!
Click to expand...

You're a poster child for all the things the (I-work-3-jobs-and-can't-afford-my-rent) crowd doesn't seem to understand about economics, education, and capitalism. Thanks for that!
 
i'm also not sure some industries are going to be around in 15-20 years, including RVs.
Click to expand...

@MIFlyer I am not so sure... In a decade all these RVs will be called “Primary Residences”!

-Skip
 
GRG55 said:
The economy is a complex animal.

Consumption drives the economy - there is no point producing anything, goods or services, unless someone wants/needs to consume (purchase) it.

Credit is consumption brought forward (for the borrower).
Savings is consumption deferred (for the saver).
One isn't any better or worse, or more virtuous than the other, assuming all things in moderation.

Once upon a time the banking system existed to take in savings (short term deposits) and lend money out longer term (mortgages, car loans). The latter loans were "assets" on the bank balance sheet, and they made most of their money on the interest spread, and the leverage against deposits (fractional reserves). Once upon a time...

Now the banks are transaction driven, making their money from fees, and shedding the risk of holding loan "assets" by bundling them up and selling them on to external capital providers looking for yield instruments. Deposit taking is almost irrelevant to their business now. In the ECB and SNB NIRP world, depositors pay the bank to hold their money on deposit. That is how unimportant it has become.

Recency bias plays a big role in the economy. That the savings rate went up (and total outstanding household credit declined) in the aftermath of the global financial crisis should be no surprise. Perceptions of income security are a huge driver of savings behavior. That probably explains a lot about the Millenial cohort savings rate, given the "gig economy" many of them deal with. I am the child of immigrant parents, and I have spent 42 years in the deeply cyclical hydrocarbon energy business. The volatility in job security and income stability is probably responsible for my propensity towards a high savings rate (and the reason I haven't blown the budget upgrading to a turbocharged, pressurized twin, among other things ;) )
Click to expand...

Agreed in full. Also a member of that cyclical hydrocarbon business, the past year and upcoming projections show a contraction in the US Shale business since demand and commodity prices have stayed relatively flat. Keeping spending in check and saving what you can is a good mantra no matter the economic outlook, but is especially important in industries that are subject to so much swing. Luckily, the US shale market has been relatively stable, even though it is down from industry highs earlier in the decade.
 
NealRomeoGolf said:
Not sure I agree. Western Europe (which is where all the stock money would be anyway) has not been at war for 30 years. The last 5 years Europe has thrived economically. Cracks are starting to form and Brexit is going to take a sledgehammer to the dam holding it all back.

Living here sure gives a different perspective on how Europe works. I cannot stand many of their economic policies or work (labor) rules, but I can see why it is appealing to them to live the way they do. Millenials remind me a lot of Europeans.
Click to expand...

I should have been clear that I consider “modern” history to be something longer than the colonies have existed. 30 years is a speck of fly poop, historically, when it comes to countries. :)

The U.S. is still just a kid and has a very real chance of morphing into something it wasn’t intended to be in the next couple hundred years.
 
chartbundle said:
Sorry, the proper term is "Tiny Houses"
Click to expand...
I love on those shows where they spend as much for a tiny house and no land as they could have for a much larger old single wide with a proper lot/land that you could build from. yeah, not cool, but a place to live and you own the land
 
MIFlyer said:
I love on those shows where they spend as much for a tiny house and no land as they could have for a much larger old single wide with a proper lot/land that you could build from. yeah, not cool, but a place to live and you own the land
Click to expand...
We're building a tiny house community.... You mean a mobile home park? No, it's a tiny house community!
 
Seriously, I'd rather live in a camper in a large shop like 50 by 100 than buy a house. The tax bills alone on housing is insane IMHO.
 
chartbundle said:
We're building a tiny house community.... You mean a mobile home park? No, it's a tiny house community!
Click to expand...

Isn't the difference between a mobile home park and a tiny home community that tornados don't have GPS coordinates for the latter?
 
bnt83 said:
Seriously, I'd rather live in a camper in a large shop like 50 by 100 than buy a house. The tax bills alone on housing is insane IMHO.
Click to expand...
The taxes on my house are more than twice as much, per month, than I ever paid for rent prior to owning a house. They're also more than the mortgage payments were on any of my three previous houses. I don't live in a mansion. It's on a little over 2 acres, and I paid just under $140K for it 20 years ago. I pay the government almost $8k a year to permit me to live in the house I own on the land I own. I have a septic system and a well, wood heat w/ propane backup, no natural gas available, and pay for my own garbage pickup. Good deal.

Sing it with me ... "I... Love... NEw YOOORRKKKK!!!"
....
not.
 
I *only* pay $2k for around the same. (129k was appraisal 19 years ago) I do have NG though.
 
That article is terrible. People should be encouraged to save their money as recent history shows when people spend over their means disaster can and will strike!

Relating to the economy, the United States continues to be in an unbelievable situation because of negative yielding interest rates on government debt around the world. It’s absurd that countries like Germany are actually making money off selling debt because you( the lender) actually have to pay the government for them to borrow your money. My fear is all this artificial banking and “let’s make the economy strong by making money free to borrow”— essentially the entire worlds policy right now— is going to end extrodinarily badly. Companies continue to borrow money on epic scales and some are just buying their own stock back. All well and good and stock holders continue to benefit but these highly leveraged companies need to be careful! It does seem like Wall St is becoming wise to this trend based on the failures of most of the IPO’s recently that are companies that are unprofitable with piles and piles of debt. Last time I checked, companies are worth assets plus profits. Debt in this day and age seems to be a spark for increasing assets and I wonder if the extrodinary ease of borrowing money has led to an entirely problematic situation because without profits these companies don’t really own anything— the lender does.
 
TCABM said:
YTD + 16%.
S&P500 index fund (40% of portfolio) +19.7%
Intl Stock fund (31%) +10%
Mid-Small Cap fund (19%) +16%
Fixed Income fund (6%) +7%
Value Stock fund (3%) +18%

Seriously considering swapping allocations for Intl and Value Stock funds.
Click to expand...

Most of Europe is at the brink of recession. It's not a bad idea.
 
3393RP said:
Most of Europe is at the brink of recession. It's not a bad idea.
Click to expand...
I have been reading for 3 years now that we are on the brink of an imminent recession here to. I have been fully invested the whole time and even if we do have a recession now, I can't see me going any further down than where I was 3 years ago. At the moment, there is only one situation that I can see that might bring on a recession, but I'm keeping my mouth shut about it.
 
JOhnH said:
I have been reading for 3 years now that we are on the brink of an imminent recession here to. I have been fully invested the whole time and even if we do have a recession now, I can't see me going any further down than where I was 3 years ago. At the moment, there is only one situation that I can see that might bring on a recession, but I'm keeping my mouth shut about it.
Click to expand...

Someday those “experts” will be correct, then they will all be introduced as “joe expert, who predicted the recession...”

Recession is almost always predicted a year before presidential elections, mainly by the opposition party, and the stock sometimes reflects this. Look at years 2007, 2011 and 2015...all down or flat years for the market. 2019 looks like it will break that trend.

Your one situation doesn’t involve the names Sanders or Warren doesn’t it? ;-)


Tom
 
JOhnH said:
I have been reading for 3 years now that we are on the brink of an imminent recession here to. I have been fully invested the whole time and even if we do have a recession now, I can't see me going any further down than where I was 3 years ago. At the moment, there is only one situation that I can see that might bring on a recession, but I'm keeping my mouth shut about it.
Click to expand...

Most of the prognostications I have seen state the 2017 Tax Cut for Wall Street ( could not resist) kicked the can down the road around two years. So many of the estimations that we were one to two years away from a recession; really need a restart on the clock.

Tim
 
tspear said:
.. I have seen state the 2017 Tax Cut for Wall Street ( could not resist)...
Click to expand...

You should have resisted. I got a nice tax cut last year, and appreciated it very much. I make less than $100k. AND, for the first time in 30 years, I didn't have to itemize. Awesome.
 
Last edited:
Something I've noticed is that the difference between certain things in the rural midwestern areas like where I live and coastal urban areas is huge. Just as an example I saw a house listed for rent at $500/mo in a nearby town recently. A house, like 2-3br... the whole house to yourself $500/mo. Some of you can't even get a t-hangar for that where you live. I can find homes- nicer homes out here for $100-150k. Of course making even close to six figures here also qualifies you as upper middle class-rich. I've known families that count on a successful deer hunt every fall to fill their freezer and feed their families. That's just an entirely different world and mindset than someone in a coastal urban area where you seem to need a six figures job just to afford a modest home. I don't know how you build a single unified national policy on things like wages, taxes, jobs, etc that's going to be good for both at the same time.
 
cowman said:
I don't know how you build a single unified national policy on things like wages, taxes, jobs, etc that's going to be good for both at the same time.
Click to expand...

It is impossible, and the more controlling the feds get the worse the quality of life will be. The presidency and SCOTU became the legislature a while ago, and its only going to get worse.
 
cowman said:
Something I've noticed is that the difference between certain things in the rural midwestern areas like where I live and coastal urban areas is huge. Just as an example I saw a house listed for rent at $500/mo in a nearby town recently. A house, like 2-3br... the whole house to yourself $500/mo. Some of you can't even get a t-hangar for that where you live. I can find homes- nicer homes out here for $100-150k. Of course making even close to six figures here also qualifies you as upper middle class-rich. I've known families that count on a successful deer hunt every fall to fill their freezer and feed their families. That's just an entirely different world and mindset than someone in a coastal urban area where you seem to need a six figures job just to afford a modest home. I don't know how you build a single unified national policy on things like wages, taxes, jobs, etc that's going to be good for both at the same time.
Click to expand...

Easy. Fair tax. Get rid of income taxes altogether, make all federal taxes a sales tax. Regional differences won’t matter much then, and everyone pays based off of their level of consumption. Poor and can’t afford to buy Mercedes vehicles and flat screens? Great, effective tax burden is lower. The wealthy will pay more in taxes by the nature of their consumption levels and luxury prices.

I’m sure property taxes will still be needed at the local level due to maintaining consistent state services, but that’s fine.
 
SoonerAviator said:
Easy. Fair tax. Get rid of income taxes altogether, make all federal taxes a sales tax. Regional differences won’t matter much then, and everyone pays based off of their level of consumption. Poor and can’t afford to buy Mercedes vehicles and flat screens? Great, effective tax burden is lower. The wealthy will pay more in taxes by the nature of their consumption levels and luxury prices.

I’m sure property taxes will still be needed at the local level due to maintaining consistent state services, but that’s fine.
Click to expand...
only issue with that is it becomes a bigger burden on the low income earners. An extra 20% on food and clothing is not going to work for some people.
 
SoonerAviator said:
Easy. Fair tax. Get rid of income taxes altogether, make all federal taxes a sales tax. Regional differences won’t matter much then, and everyone pays based off of their level of consumption. Poor and can’t afford to buy Mercedes vehicles and flat screens? Great, effective tax burden is lower. The wealthy will pay more in taxes by the nature of their consumption levels and luxury prices.

I’m sure property taxes will still be needed at the local level due to maintaining consistent state services, but that’s fine.
Click to expand...

That would work well for me but you have to realize that people making a fairly low income pay little to no taxes now by the time you factor in the standard deduction and all the other stuff. That actually does make for an effective tax increase on the poor. Maybe if you exempted food, clothes, and necessities but then you’d need a ridiculous sales tax.

That’s the pickle we’re in though- fair is very much a relative and subjective term. You can’t really make any big change at this point without some people getting hosed and others coming out great. At the risk of getting political I think you’ll find who benefits and loses to be pretty predictable along partisan lines when the usual yahoos roll out their new tax plans.
 
SoonerAviator said:
Easy. Fair tax. Get rid of income taxes altogether, make all federal taxes a sales tax.
Click to expand...

Tougher than most think. Article 1 and 16th Amendment become quite cumbersome with respect to taxes levied by Congress.
 
EdFred said:
only issue with that is it becomes a bigger burden on the low income earners. An extra 20% on food and clothing is not going to work for some people.
Click to expand...

The Fair Tax program, as currently defined, includes a “prebate” for those at the lower end, and had proposals for goods like basic groceries and such. It is designed to combat the regressive portion at the bottom of the income earners.
 
My girlfriend is a Millenial, she is a hard worker, fiscally responsible, intelligent, and very reasonable in her thinking.
I am gen X, and not as good with money as she is.
 
SoonerAviator said:
The Fair Tax program, as currently defined, includes a “prebate” for those at the lower end, and had proposals for goods like basic groceries and such. It is designed to combat the regressive portion at the bottom of the income earners.
Click to expand...

Problem to replace the current income taxes is the required effective rate. I forget which news magazine/econ white paper I was reading where they broke it down. Something along the lines of 25%. If you exclude food and rent (the most regressive items) the required interest rate goes to something crazy like 35%.

Note: this was only income tax. It did not include, Social Security, Medicare, FUTA, SUTA, State Taxes....

Tim
 
Mtns2Skies said:
I think we can all agree here and say congrats and well done ;)
Click to expand...

Well, maybe maybe not. Gen Xers last birth year is 1980 and Millennials were born starting in 1981 there might not be that much congrats to be given. Now 1965 to 1990s...
NeilPatrickHarrisHighFive.gif
 
jspilot said:
That article is terrible. People should be encouraged to save their money as recent history shows when people spend over their means disaster can and will strike!

Relating to the economy, the United States continues to be in an unbelievable situation because of negative yielding interest rates on government debt around the world. It’s absurd that countries like Germany are actually making money off selling debt because you( the lender) actually have to pay the government for them to borrow your money. My fear is all this artificial banking and “let’s make the economy strong by making money free to borrow”— essentially the entire worlds policy right now— is going to end extrodinarily badly. Companies continue to borrow money on epic scales and some are just buying their own stock back. All well and good and stock holders continue to benefit but these highly leveraged companies need to be careful! It does seem like Wall St is becoming wise to this trend based on the failures of most of the IPO’s recently that are companies that are unprofitable with piles and piles of debt. Last time I checked, companies are worth assets plus profits. Debt in this day and age seems to be a spark for increasing assets and I wonder if the extrodinary ease of borrowing money has led to an entirely problematic situation because without profits these companies don’t really own anything— the lender does.
Click to expand...

To restate a principle - There is No Such Thing As A Free Lunch. Americans pay for negative interest rates, they just don't pay in the loan. The public winds up paying for it in higher taxes / lower services / trade imbalance / inflation / monetary devaluation / etc. Somewhere the value of money comes out.

I've always thought that the theory of highly leveraged companies is flawed because it doesn't consider the situation of future debt burden, which is a significant risk to long term valuation. Leveraging makes the company brittle and more likely to break rather than survive a future crisis.
 
bflynn said:
To restate a principle - There is No Such Thing As A Free Lunch. Americans pay for negative interest rates, they just don't pay in the loan. The public winds up paying for it in higher taxes / lower services / trade imbalance / inflation / monetary devaluation / etc. Somewhere the value of money comes out.

I've always thought that the theory of highly leveraged companies is flawed because it doesn't consider the situation of future debt burden, which is a significant risk to long term valuation. Leveraging makes the company brittle and more likely to break rather than survive a future crisis.
Click to expand...

Yeah exactly. What’s even more scary is the “growth at all costs” mindset many of these companies have. Look at UBER— hugely influential company but can’t make money and might never be able to. These executives are actually just being paid by venture capitalists and even richer people than them but can’t actually support themselves or the company off of the profitability of the company. It’s kind of bizzaro world right now.
 
tspear said:
Problem to replace the current income taxes is the required effective rate. I forget which news magazine/econ white paper I was reading where they broke it down. Something along the lines of 25%. If you exclude food and rent (the most regressive items) the required interest rate goes to something crazy like 35%.

Note: this was only income tax. It did not include, Social Security, Medicare, FUTA, SUTA, State Taxes....

Tim
Click to expand...

Understood, but the rate is what it is. It's not that it would be set at some artificially-low percentage, but that it would be equal for everyone. The rate should be set at "parity" to current revenues, then worked up/down depending on gov't budget needs. The difficulty in the US tax code regarding income taxes, is that people have different ways of classifying "income". Then you get tax credits, and tax deductions, etc. The Fair-Tax eliminates the loopholes and such, and the majority of the IRS. There are no annual reports to file per say, since the tax is collected when purchases are made. If that tax is 30% on a new car, so be it, you didn't get taxed on your income so the money to pay for it was still received. It makes revenue planning pretty simple for the government, since it would follow consumption. It's a lot easier for people to rally against raising taxes when everyone's at the same tax rate . . . which means it's easier to tell the gov't to shove it and cut expenses, too. The US tax code is just unnecessarily complicated (purposefully so).
 
Shuswap BC said:
I was married, my wife passed away, which is why I have a girlfriend at my age. We are actually getting married in July 2020.
Click to expand...

My first wife also passed away. It really is kinda amazing the dating scene at our ages. I reached out to someone for advice; and she stated something very interesting. We are all damaged goods. But the damage from losing a spouse can leave you vulnerable to manipulation. So she was emphatic, do not post you are a widow in your online profiles....

I have remarried since, but went with another Gen X (from France no less).

Tim
 
You must log in or register to reply here.
Back
Top