At this point I'm confused if we're trying to slow inflation or fuel it. It will be interesting to see how the bond market reacts.
The Steross Market and Investing Thread
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Honestly, I always had a lot of respect for the Fed and Jerome Powell but I think their confidence in "transitory inflation" a while back that turned out to be not even close to true has them scared and chasing their tails a bit. They don't know whether to fear crashing the economy or inflation more. And, with Trump heading into office with his mouth, it ain't gonna get easier for them.
Is anyone else concerned about the economic impacts of tariffs and deportation? Seems highly likely to cause inflation.
I was about to ask the same question. What do we think the odds are they actually enact broad tariffs? That would be incredibly inflationary.
Yeah. I'm guessing (hoping) there will be enough smart economic policy advisors around to talk about how bad those ideas are and all we will see is minor "campaign promises" and not major policy shifts.
My guess is that cooler heads prevail and he enacts some specific high-profile tariffs but not broad tariffs.
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I just don’t think the fed will be successful in muscling rates down. You’re right that they missed their chance to get on top of inflation early and it seems like they’ve been behind the power curve this whole time. I guess I’m in the camp that thinks it’s a mistake to keep kicking this can down the road and I think lowering rates here is a mistake. Nobody wants to be “that guy” but this economy is going to crash and the longer we put it off the more painful it will be.
I don’t think even Trump believes that he will use tariffs to the extent he claims. He’s an experienced deal maker and he’ll use the threat of tariffs as a hammer to get something else he wants. I’ll be the first to start raising heck if he doesn’t use them on Mexico his first week in office to start solving this ridiculous border problem.
I hope so. Hopefully a lot of this is no more than bluster.
You might be overassuming Trump’s mental capabilities at this point. Whatever you thought of Biden the past 4 years it looks like Trump is in a similar situation.
Thanks for the heads up.
Projectionism is a disease……
‘I Don’t Know Where to Turn or What to Do.’ His $763,094 Retirement Fund Is in Limbo.
Richard Whitacre transferred his entire 401(k) into an account offering a ‘guaranteed’ 15.25% return. Will he ever see his money again?
Richard Whitacre’s life turned upside down in 2023. First the industrial mechanic in Pasadena, Md., got laid off from his longtime job. Soon after, he was diagnosed with colon cancer.
Then, out of nowhere, it seemed that a single investment would put Whitacre’s life back on track. Through a friend, he heard about a firm called Yield Wealth and the “guaranteed” 15.25% return it was offering to investors on some products.
“I figured this is an amazing opportunity and I’ll be set for life,” recalls Whitacre, 60. He talked about it so obsessively, says his wife, Kimberly, that despite her misgivings she eventually told him, “It’s your money, I have no clue, I don’t care anymore, do what you gotta do.”
In March, Whitacre withdrew his entire 401(k) from Fidelity—$763,094.21—and rolled it over into an individual retirement account with Yield, which was affiliated with a firm called Next Level Holdings.
FYI for any small business owners:
Millions of Americans Have Failed to Comply With New Tax Ownership Rules
Can’t read it.
That's weird. Usually gives a shareable copy.
Millions of Americans Have Failed to Comply With New Tax Ownership Rules
Whether you are an owner of a large private business with cross-border operations or a simple LLC holding a family cottage, it’s likely that you are obligated to comply with new federal ownership disclosure rules by year-end—but have failed to do so.Three-quarters of the 32 million private companies and pass-through entities that are required to file ownership information to the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) starting this year still haven’t done so, risking up to a $10,000 penalty or jail time for noncompliance.
The new rules, passed under the Corporate Transparency Act (CTA) in 2021, apply to people who have substantial control or at least a 25% stake in a business or pass-through entity that isn’t registered with a federal government agency such as the Securities and Exchange Commission.
This generally includes LLCs and private corporations such as S corporations and businesses that were created by filing documents with a state government, and foreign entities registered to do business in the U.S.
Public companies, nonprofits and private companies such as registered investment advisors (RIAs) that already file ownership information with the federal government have no CTA filing obligations.
The rules are an effort by the Treasury Department to crack down on money laundering and tax evasion to reduce the nation’s nearly $700 billion tax gap, which is the difference between taxes owed and taxes paid to the Internal Revenue Service.
“When FinCEN tries to find out who is doing money laundering and hiding money, they’re having a difficult time tracking cash flows because they don’t see who owns what, because people have been able to shield their names and ownership,” Yun says.
But the low compliance rate so late in the year reflects problems with the general way the CTA was written, says Alan Granwell, an attorney at Holland & Knight. While many owners may not be aware of the new rules, even those who are and have best intentions to file are stumped by myriad questions, he says.
“We’re getting calls left, right and sideways about this stuff,” Granwell says. “You have different questions arise depending on whether you’re in private equity, venture, construction, real estate—each has its own issues.”
Some business owners may be holding off on filing, hoping that the CTA will be overturned in the courts or that Republicans, who typically favor easing regulations and less oversight on businesses, will cancel the CTA requirements next year now that they have a majority in the Senate and the House.
But that’s a risky stance, says Carolyn Yun, a client advisor at Hollow Brook Wealth Management. If the law sticks, FinCEN will have to make an example of non-filer to encourage compliance, she says.
“I would expect jail time would be reserved for egregious offenders. But FinCEN may have to apply daily penalties,” she says.
FinCEN can charge an entity $500 a day up to $10,000 for noncompliance.
Cargill: America’s biggest private company is laying off thousands of workers | CNN Business
Cargill, the megasized Minnesota-based food production giant, is laying off about 5% of its global workforce as food commodity prices drop.
Cargill to layoff 5%