News and my thoughts from the last week (02Sep24) - Debt, Affirm, Budget
News and my thoughts from the last week (02Sep24)
If we cannot spend within our means, will debt and bankruptcy be our downfall?
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U.S. credit card debt hits all-time high of $1.14 Trillion! - X User RadarHits
The sale of the logistics arm of Germany’s national railway Schenker has the potential to create a new supply chain powerhouse in the United States. - FreightWaves
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Did you know the US Government is planning on adding another $16 trillion to our national deficit through 2035?
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Decreasing loss & increasing revenue - these look good for Affirm but not so much for the economy. What is the default or delinquency rate?
Allstate to increase home insurance rates for California customers by an average of 34.1%, per Bloomberg. The rate hike, which will take effect from November, will impact about 350,000 policyholders. Some customers will face premium increases of up to 650%. - X user Unusual Whale
Super Micro Computer, $SMCI, has delayed its 10K filing after Hindenburg Research said it was committing accounting fraud yesterday. The stock is now down 34% over the week.
Kamala Harris economic adviser affirms that there is a plan to tax unrealized gains, for households worth more than $100,000,000. CNBC says: "It will not happen in my lifetime."
I guess messing up the border is not sufficient. Now there is a migration policy that goes after the rich households. There are many places that welcome this wealth transfer. Failure to attract and keep the rich implies that one may have a policy that is counter-capitalism.
The California State Senate has passed a bill providing undocumented immigrants up to $150,000 in state-supported home loans.
One of San Francisco's most iconic malls has plunged ~$1 BILLION in value since 2016 The value of the Emporium Centre (formerly Westfield Centre) went from $1.22B in 2016 to $221M according to an appraisal done by KBRA The owners stopped making payments on a $558M loan tied to the property and placed into receivership per TRD In 2009, the mall was 1 of 9 finalists vying for the title of the “World’s Best Shopping Center” by ICSC. X user “Triple Net Investor”
Russia to start using cryptocurrency for international transactions on September 1st. Russia plans on testing crypto payments as a way to break away from Western sanctions. - BRICS News
KAMALA PLEDGES $25,000 FOR FIRST-TIME HOMEBUYERS IF ELECTED PRESIDENT “Even if aspiring homeowners save for years, it is often still not enough. My administration will provide first-time homebuyers with $25,000 to help with the down payment on a new home.” Source: X
The taxpayers are paying for this. This would be funded by debt. Sellers would bump up their price by $25K and more. Affordability, income, and value need to be addressed. These help to propel the country forward, not free handouts.
Tuesday got off to a tragic start at Atlanta’s international airport after a tyre unexpectedly exploded on a Delta Air Lines jet and killed two workers instantly. What a loss. Prayers for the family. - The Daily Beast
For regular usage, homeowners will have fewer needs to visit the petrol kiosks when they can charge their vehicles at home. This is a convenience that can lead to some lifestyle changes.
Mark Zuckerberg, in a bombshell letter to House Judiciary Chairman Jim Jordan, expresses deep regret over Meta's compliance with Biden Administration pressure to censor COVID-19 content in 2021. The tech mogul admits they should have been more outspoken against government-led censorship attempts. Zuckerberg reveals the White House repeatedly urged Meta to remove COVID-related content, including humor and satire, causing internal frustration. He now believes this government pressure was "wrong" and vows to push back against similar future attempts. In a stunning political shift, Zuckerberg also announced he will not contribute money to Democratic candidates this election cycle. Source: BRICSinfo
"Charlie Munger gave me a great quotation on this subject, from Demosthenes: “Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true." - Howard Marks, The Most Important Thing: Uncommon Sense for the Thoughtful Investor
Some highlights from X user The Kobeissi Letter
US government spending is estimated to hit $6.8 trillion in Fiscal Year 2024, the most since 2021. Medicare, Medicare, and Social Security expenditures are projected to reach a MASSIVE $3.1 trillion, or 46% of the budget. Defense and non-defense discretionary spending will likely exceed $1.8 trillion, accounting for 27% of all expenditures. Net interest and other spending are set to hit $892 billion and $908 billion, respectively, or 13% a share each. All while the government projects $4.7 trillion in revenue. This leaves a whopping $1.9 trillion budget gap which has to be borrowed, the highest in 3 years. The US government has a spending problem.
US net interest payments on national debt hit $861 BILLION over the last 12 months, according to the latest US Treasury report. Interest costs have nearly DOUBLED in just 2 years. This does not include $100 billion of Federal Reserve payments handed to banks as interest payments. Including those payments, effective interest costs over the last year hit a RECORD $962 billion. The US government needs lower interest rates more than anyone.
What could be the outlook of a lifestyle or economy funded by debt? Eventually, there may be no more creditors when they realize that there is no intent or means to repay. The printer would be turned on, and inflation would rise again. We need fiscal responsibility.
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