THE BEAUTIFUL BUDGET
I don't think it's very beautiful, from what I've heard about it.
No need to increase the military budget, let alone a la
CPI is a lagging indicator
10% tariffs started in April and some of the others started in may
We will see the supply chain ripple next quarter and then the China tariffs the quarter after
Man it's prices in may 2025 vs april 2025, what lagging indicator? may 2025 tariff revenues were record high, prices increased only 0.1 MoM.
I know that you love to cosplay as someone who understands things on the internet, but trying to present macroeconomics as just too complicated to follow or understand doesn't actually make you look informed
Literally right now: Dollar is down 10%, interest rates are up 100%, and prices of goods are up 2.4%. Thats enough data to know that the first 5 months of this presidency have been a disaster
I know that you love to cosplay as someone who understands things on the internet, but trying to present macroeconomics as just too complicated to follow or understand doesn't actually make you look informedLiterally right now: Dollar is down 10%, interest rates are up 100%, and prices of goods are up 2.4%. Thats enough data to know that the first 5 months of this presidency h
What do you mean with "interest rates are up 100%"??
I got this wrong. Had an image in my head that I misremembered
I'd say I was wrong and I'm happy that the country isn't doomed
What would you say?
Man it's prices in may 2025 vs april 2025, what lagging indicator? may 2025 tariff revenues were record high, prices increased only 0.1 MoM.
Prices are going up currently, but most prices aren't going to just jump 10% the same day a tariff is collected. Walmart as an example said they will start raising prices this month.
How could tariff revenues not be at a record high? May was the first month of the first time the US has had sweeping tariffs
Prices are going up currently, but most prices aren't going to just jump 10% the same day a tariff is collected. Walmart as an example said they will start raising prices this month.
How could tariff revenues not be at a record high? May was the first month of the first time the US has had sweeping tariffs
you previously said they hadn't actually been implemented yet.
This you?
/ The thing about tariffs causing inflation is that you have to actually implement the tariffs and not just threaten to implement tariffs that then don't get implemented
Yeah man he threatened tariffs for 3 months before a single one stuck. We aren’t going to see inflation spike based off one month of tariffs.
If in 3 months cpi hasn’t spiked you can start to maybe take a victory lap assuming nothing else changes
But if June cpi is 4% or more I do expect you to circle back and point out that I was right and you were wrong
That's a big word salad, but it doesn't change the fact that everyone knows tariffs are a horrible idea with serious negative consequences. Just like the defund the police idea, we don't have to actually run the experiment to figure out how awful an idea it is. We already know.
Stock buybacks are a big reason why IRAs and 401ks increase in value over time, and how pensions can payout nite than they are funded with, so they absolutely fo benefit workers and the middle class.
And our standard of living can never increase without increasing productivity, so essentially that’s what benefits workers most. If AI replaces jobs because it turns out to increase productivity, it’s going to be one of the best boon to workers in history.
That's a big word salad, but it doesn't change the fact that everyone knows tariffs are a horrible idea with serious negative consequences. Just like the defund the police idea, we don't have to actually run the experiment to figure out how awful an idea it is. We already know.
Looks like the post I was responding to got deleted.
Stock buybacks are a big reason why IRAs and 401ks increase in value over time, and how pensions can payout nite than they are funded with, so they absolutely fo benefit workers and the middle class. And our standard of living can never increase without increasing productivity, so essentially that's what benefits workers most. If AI replaces jobs because it turns out to increas
stocks buyback bring 0 gdp...
all it does it makes stock market more expensive , a waste of capital that could be better invested .
especially when all they do is buy it near all time high.
no wonder the markets are so overvalued
all it means is the US dollars is crashing ( saw gold lately ?) and those that only have wages as income are getting poorer .
ps: yes its great those pension funds for those that have them.
The richest Americans own the vast majority of the US stock market, according to Fed data.
The top 10% of Americans held 93% of all stocks, the highest level ever recorded.
Meanwhile, the bottom 50% of Americans held just 1% of all stocks in the third quarter of 2023.
crazy idea i know but debts isnt wealth.
were you responding to this post
not necessarily, try to think second order effects.First order is headline prices of the tariff-ed items go up, definitionally inflationary.Second order is people are poorer because of increased fiscal intake which depresses demand thoughout the economy which is definitionally deflationary.Raising taxes keeping expenditure the same is definitionally deflationary (that's true fo
Buybacks are a return of profits to investors just like dividends. He difference is buybacks are more tax efficient. Without a share of profits, investors would never invest. So it definitely increases GDP growth because without investment, GDP grown would be negative.
And obviously the top 10% would own most of the stocks because that’s how math works. The median income is about $50k while the top 10% is about $180k. The average savings rate is 5%, but it’s far higher the higher your income. So if the savings rate is 20% for the top 10 percentile of earners, but 5% for the median The median person saves $2, 500/year while 10%er saves $36K a year. If both put their entire savings in stocks, the 10%er buys 15x more stocks than the median income level person.
Buybacks are a return of profits to investors just like dividends. He difference is buybacks are more tax efficient. Without a share of profits, investors would never invest. So it definitely increases GDP growth because without investment, GDP grown would be negative.And obviously the top 10% would own most of the stocks because that's how math works. The median income is
it is not the same.
if it was the same, you telling me just receiving dividends from a company increase the GDP ?
i mean if buyback and dividends are the same....
if a corporation does buyback instead of dividends, i am force to sell a portion of the company that i own to get that stream of income....
and i get fees to pay for selling stocks to get that stream of income.
buybacks increases the stock prices evermore , making it more and more difficult for the median income to gain stocks.
you see corporations that can abuses economic crisis by borrowing cheaply (thx QE) and buyback shares even more too, making it even harder for the median incomer to gain shares since if there is a big recession or crisis, they probably dont have much cash at hands (or a job) to buy stocks...or borrow to buystocks.
increasing wealth inequality even more.
yeah banks during crisis will tighten there borrowing qualification of course for the median incomer.
buybacks send a distort signal to the market seeing the prices going higher when in effect its just a accounting manipulation with less shares affecting the p/e ratio.
u think the corporation grows but in effect it isnt, the top line on the income statement is not growing.
there is a distortion to the upside for management because they know with inside information when there is a period on stock buybacks, if they should sell or buy while the retail investors have absolutely no idea on what they should do.
artificial stock buyback , which is the norm today under the " its the same as dividends, means the price of stocks shouldnt matter anymore....
buy low or high becomes irrelevant for the company which obviously is not possible.
there is probably more problems with the concept of stock buybacks and dividends are the same but its late, im tired...
This is the best description of our little Lucy that I've ever seen.
That's a big word salad, but it doesn't change the fact that everyone knows tariffs are a horrible idea with serious negative consequences. Just like the defund the police idea, we don't have to actually run the experiment to figure out how awful an idea it is. We already know.
Yes but not because of inflation. Or not necessarily because of that. Tariffs are bad and stupid because they make the quality of life of people worse, they make them poorer in real terms.
Yeah man he threatened tariffs for 3 months before a single one stuck. We aren’t going to see inflation spike based off one month of tariffs.
If in 3 months cpi hasn’t spiked you can start to maybe take a victory lap assuming nothing else changes
But if June cpi is 4% or more I do expect you to circle back and point out that I was right and you were wrong
If june or july cpi is 4% or more and it isn't because of a big jump in oil then ye i would agree that tariffs were indeed inflationary (at least for a while).
That's a big word salad, but it doesn't change the fact that everyone knows tariffs are a horrible idea with serious negative consequences.
Republicans don't seem to know this.
They know it but it doesn't align with their current self serving objectives.
That's a big word salad, but it doesn't change the fact that everyone knows tariffs are a horrible idea with serious negative consequences. Just like the defund the police idea, we don't have to actually run the experiment to figure out how awful an idea it is. We already know.
You don't think an leo budget can be trimmed ever? Don't you at least want to destroy their union and slash their pay/benefits etc? Why shouldn't they be able to get a healthy dose of the system they want everyone else to live with? Let's whittle that hourly down to the bone in the name of true freedom 😀
Stock buybacks are a big reason why IRAs and 401ks increase in value over time, and how pensions can payout nite than they are funded with, so they absolutely fo benefit workers and the middle class.
Buybacks are a return of profits to investors just like dividends. He difference is buybacks are more tax efficient. Without a share of profits, investors would never invest. So it definitely increases GDP growth because without investment, GDP grown would be negative.
This is not really true for the group you are talking about. Buybacks are way more tax efficient for the wealthy who have to invest in taxable accounts. For workers and the middle class who invest only in tax advantaged accounts they are the same. I'm not going to blanket say dividends would be better for the median investor, but it's not at all obvious buybacks > dividends either.
I didn’t say the same, I said they were similar. And clearly you don’t understand how stocks work. Without buybacks OR dividends the intrinsic value of stocks is zero, they would be no different than NFTs.
Stocks are partial ownership of businesses. Without any way to share in the profits of a business, no investor would ever fund any business. Without investment, no business could expand, so no GDP growth.
if a corporation does buyback instead of dividends, i am force to sell a portion of the company that i own to get that stream of income....
and i get fees to pay for selling stocks to get that stream of income.
With dividends, in taxable accounts you are forced to pay taxes on the dividend before you can use it to buy more stock. Investors typically reinvest to grow the value of their investments, buybacks allow them to increase the value of their investment tax free simply by doing nothing. Every buyback slightly increases the value of each share as it owns a slightly higher percentage of the company.
And if the investor wants cash instead, they can sell some shares. Buybacks give every investor the tools to do what they want in the most tax efficient manner.
buybacks increases the stock prices evermore, making it more and more difficult for the median income to gain stocks.
This is so silly it’s as if a child wrote it. Stocks have never been more affordable. Commissions are so low they are practically free, a tiny fraction of what was charged 50 years ago.
And with or without buybacks most stock prices go up over time, as the business grows and increases revenues and profits.
And as a companies stock price rises typically they perform stock splits that keep the stock price trading in a price range the company views as optimal for allowing broad ownership of their stock. They absolutely don’t want the price of each share to go too high.
The example is if you own 10 shares in XYZ corp you paid $10 each for, giving you a 1% ownership out of its 1, 000 total shares. The first year they earned $100 profits, or 10 cents per share and profits increase 14% a year, doubling every 5 years. After about 10 years assume they bought back and retired about 500 shares, and profits would have quadrupled, so now they earn $400 and because there is only 500 shares they are now earning 80 cents per share and your ownership percentage has increased to 2%.
But the stock now trades at around $80, making it less affordable. So the company will do a 8-1 split, increasing shares to 4, 000 total, and you now have 80 shares trading around $10 and the stock is as affordable as ever.
The biggest counter example is Warren Buffett company. When he took over it each share of stock traded for about $10, and for over 50 years, and before he did his first buyback, the trading price increased to over $100, 000 each. He finally started buying back stock and it now trades for $730, 000 per share.
He never believed in splitting the stock because it doesn’t change its fundamental value, your percentage ownership doesn’t change. But even he had to admit it was getting absurd when the prices first got in the tens of thousands and he didn’t want shareholders to have to sell a whole share if they needed cash (he’s never paid a dividend). So he created B shares worth 1/30th of the original shares, which trade at 1/30th of the price.
you see corporations that can abuses economic crisis by borrowing cheaply (thx QE) and buyback shares even more too, making it even harder for the median incomer to gain shares since if there is a big recession or crisis, they probably dont have much cash at hands (or a job) to buy stocks...or borrow to buystocks.increasing wealth inequality even more.yeah banks during crisis w
Companies that are very profitable, such as Apple, look for the most tax efficient ways to pay you and I our share of profits. In apples case about 70% of profits are made overseas. If they directly bring those profits out of their international subsidiaries, they become taxable, but if they leave them there they aren’t. So instead they leave them there and borrow against them to pay dividends.
The math works this way. Let’s say they earn $1B in Apple Germany, and pay 20% in taxes to Germany. Then they pay the remaining $800M in profits to Apple USA so they can dividend it to shareholders. California will take about 10% leaving $720M, and the US will take 21%, leaving about $580M (58%) to pay shareholders. In a taxable account, A California shareholder will owe about 10% to California, leaving 52%, and then owes 20% in federal income tax, so they end up pocketing a little over 40% of their share of Apples profits.
Or Apple Germany can keep that $800M overseas and Apple can borrow $800M for incredibly low rates because the loan is secured by the overseas monies, and buy back stock.
Now the Apple Shareholders stock price increase proportionally to 80% of its profits, instead of only 40%. it’s obviously the right thing to do for your shareholders. And if you don’t like it, question why we need five layers of taxation on overseas profits (or quadruple taxation on domestic profits). It would be much better for everyone involved, including the US taxpayer, if we just taxed profits when they got to individuals pockets, and far more progressive.
buybacks send a distort signal to the market seeing the prices going higher when in effect its just a accounting manipulation with less shares affecting the p/e ratio.
u think the corporation grows but in effect it isnt, the top line on the income statement is not growing.
It’s not manipulation at all. Fewer shares equals higher profits per share, this is just basic math. Shares are pieces of ownership, not the whole thing, and shares trade on their “share” of profits and buybacks absolutely increase that.
If buybacks were banned, the same profits would be returned as dividends, just as they were in the 70s before buybacks became a thing. The after tax returns to shareholders would be significantly lower, leasing to less investment in the US, lower growth and the stock market would suck, like it did in the 70s.
there is a distortion to the upside for management because they know with inside information when there is a period on stock buybacks, if they should sell or buy while the retail investors have absolutely no idea on what they should do.
This is of course pure BS. It’s illegal for management to trade during quiet periods when they have material non public information and they are forced to file public reports for every trade they make when they make it. The rare CEO or exec who breaks these rules faces severe punishments and it’s really hard to hide it when you need a broker involved.
And the value in stock ownership has little to do with this quarters results and everything to do with its next decade if results, giving insiders little ability to redo higher share of long term value.
artificial stock buyback, which is the norm today under the " its the same as dividends, means the price of stocks shouldnt matter anymore....
buy low or high becomes irrelevant for the company which obviously is not possible.
there is probably more problems with the concept of stock buybacks and dividends are the same but its late, im tired...
This is basically gibberish. I think what you meant to say was that execs stock option plans favor pumping up the stock price with buybacks to get it well above their exercise price, even if the buyback prices are well above the stocks intrinsic value.
If that’s what you meant I agree, but that’s not a buyback problem, that’s a stewardship problem. If you banned buybacks they’d just do the same thing using dividends, even if they had to borrow more than was justified to pay them.
The stewardship problem is the SEC doesn’t allow shareholders in public companies to control the board of directors, out of fear that “corporate raiders” will be able to buy enough shares in companies to throw out terrible management that uses buybacks and stock options to line their own pockets at expense of shareholders. So we aren’t allowed to propose new board members to vote in, we only get to rubber stamp managements picks.
