How do you feel the recent government spending will affect the market and future?
I tend to believe we will continue to print new money in hopes of ensuring the continuing housing bust does not collapse the economy. Most 401k stable return funds are based partially in mortgage backed securities. It makes sense that we will continue to print money so all the no risk people do not lose all faith in our banking industry by defaulting all the AA "no risk" rated investments. Although, these derivatives that ensure security are many times the size of our actual economy (does this mean major future bust?).
I also think inflation (as mentioned in other threads) could be a problem in the long term.
The plus side is that all the spending might possibly keep the market out of a second recession. Though looking at history, I will be surprised if we don't get another correction.
Your thoughts?
Taxpayer Bailout Spending
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AlexOliver
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George the original one
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> How do you feel the recent government spending
> will affect the market and future?
Those effects are over & done with, except for infrastructure spending which produces returns many years into the future. They've softened the blow of a severe downturn and provided stability in a time of extreme doubt. The only question is whether resolving the short term angst (and whether the effects of an untampered economy were as dire as we imagined) was worth the future cost.
Local building permits and employment are flat. If you just want "a job", then you can find something that won't pay well, but if you want "a career" or "good pay", then your expectations are too high. Local government & school offices are still planning more cutbacks, but can likely hold out until June when the next fiscal year budget begins provided they were aggressive enough during the last round.
As for what it's meant for me? I've recently trimmed back my municipal bond fund because the NAV had peaked and begun falling backward. Since I had a 7% capital gain for the past 9 months in addition to the 7% yield I've enjoyed, it seemed like a good idea.
In other investments, I'm not finding many good bargains unless I selectively pick something from the past month's Dogs of the Dow (in my case, JNJ was the best bargain since I already own T). So long as I don't overweight the portfolio such that my current yield falls below 6.5% (currently 6.7%), I can add something like JNJ.
> will affect the market and future?
Those effects are over & done with, except for infrastructure spending which produces returns many years into the future. They've softened the blow of a severe downturn and provided stability in a time of extreme doubt. The only question is whether resolving the short term angst (and whether the effects of an untampered economy were as dire as we imagined) was worth the future cost.
Local building permits and employment are flat. If you just want "a job", then you can find something that won't pay well, but if you want "a career" or "good pay", then your expectations are too high. Local government & school offices are still planning more cutbacks, but can likely hold out until June when the next fiscal year budget begins provided they were aggressive enough during the last round.
As for what it's meant for me? I've recently trimmed back my municipal bond fund because the NAV had peaked and begun falling backward. Since I had a 7% capital gain for the past 9 months in addition to the 7% yield I've enjoyed, it seemed like a good idea.
In other investments, I'm not finding many good bargains unless I selectively pick something from the past month's Dogs of the Dow (in my case, JNJ was the best bargain since I already own T). So long as I don't overweight the portfolio such that my current yield falls below 6.5% (currently 6.7%), I can add something like JNJ.
Check this out.
http://www.usdebtclock.org/
None of these numbers make much sense to me because I don't see how they will be paid back. How can the total debt per family be $660,000 when the average family only makes $63000?
http://www.usdebtclock.org/
None of these numbers make much sense to me because I don't see how they will be paid back. How can the total debt per family be $660,000 when the average family only makes $63000?
@The Dude
The same way that the same family can have a $300K mortgage?
Perversely enough it in the government's (and all debt-holders) interest for inflation to rise. Because then they can repay their debts with devalued future money. This makes me a biased observer as I do hold debt (mortgage), so I'd see a benefit from inflation, whereas those with build up capital would see their buying power decreased.
That said, I'm not worried that much about inflation since even with the measures it's been pretty flat based on CPI and the uproar I've heard about COLA for SS and such programs. If anything economist writings I've seen indicate that the stimulus measures might have helped keep away deflation.
The same way that the same family can have a $300K mortgage?
Perversely enough it in the government's (and all debt-holders) interest for inflation to rise. Because then they can repay their debts with devalued future money. This makes me a biased observer as I do hold debt (mortgage), so I'd see a benefit from inflation, whereas those with build up capital would see their buying power decreased.
That said, I'm not worried that much about inflation since even with the measures it's been pretty flat based on CPI and the uproar I've heard about COLA for SS and such programs. If anything economist writings I've seen indicate that the stimulus measures might have helped keep away deflation.