Stock Thread 2019

[UDRider]

Well Warren Buffet thinks otherwise: https://youtu.be/iim4LG6pK64

Now I was somewhat glib in my original post, but overall point stands. US debt doesn't matter that much, or at least not as much as one party thinks it is.

Much bigger issue is increasing health care costs, and aging baby boomers.

 

[rodr]

Well Warren Buffet thinks otherwise: https://youtu.be/iim4LG6pK64

Now I was somewhat glib in my original post, but overall point stands. US debt doesn't matter that much, or at least not as much as one party thinks it is.

Much bigger issue is increasing health care costs, and aging baby boomers.

Interesting video, thanks. I would just note two things:

1. It's from 2013.

2. He has caveats like "unless we do something really stupid...." In particular he said the political parties should agree not to use the debt limit as a bargaining chip in the future because it is "a political weapon of mass destruction."

 

[byke]

Plus, a 1% day is kind of a joke of a response to debt and a downturn. Those 1% days come from someone farting. Multiple consecutive 3%+ days and then we might have something.

 

[UDRider]

Interesting video, thanks. I would just note two things:

1. It's from 2013.

2. He has caveats like "unless we do something really stupid...." In particular he said the political parties should agree not to use the debt limit as a bargaining chip in the future because it is "a political weapon of mass destruction."

1) Yeah and at that time was 4+%. Actually not much different then it was in 2018, except there was no tantrums on the hill last year and Ted Cruz was no where to be seen.

2) Yeah I agree with him on that one. Deficit/debt in it self is not necessary a problem. Stupid political games are.

 

[afm199]

Well Warren Buffet thinks otherwise: https://youtu.be/iim4LG6pK64

Now I was somewhat glib in my original post, but overall point stands. US debt doesn't matter that much, or at least not as much as one party thinks it is.

Much bigger issue is increasing health care costs, and aging baby boomers.

I keep hearing this, and keep wondering how ever growing cost of debt service doesn't matter. As more and more of the budget is used to service debt, less and less is available for other things. I realize that inflation has always been the means of dealing with debt ( inflate currency 3-4% yearly and deal with debt by paying it off with cheaper money), but it's not a viable long term tactic.

 

[Entoptic]

Pge still has legs!

Tesla looking like a buy.

Tvix still rising.

 

[UDRider]

I keep hearing this, and keep wondering how ever growing cost of debt service doesn't matter. As more and more of the budget is used to service debt, less and less is available for other things. I realize that inflation has always been the means of dealing with debt ( inflate currency 3-4% yearly and deal with debt by paying it off with cheaper money), but it's not a viable long term tactic.

What is it now around 250B, and like ~1.5% of GDP? It's not the end of the world. Now I am not saying US Government should go gangbusters, and spend like drunken sailor, but debt is not as big of a deal as some make it seem. As long as politicians don't do stupid thing. Cough *tax cuts during booming economy. Cough* petty fights and shut down threats to raise debt ceiling. Cough* shutdown over a wall.

Why do you think it's not a valuable long term strategy? Worked for decades so far.

 

[afm199]

What is it now around 250B, and like ~1.5% of GDP? It's not the end of the world. Now I am not saying US Government should go gangbusters, and spend like drunken sailor, but debt is not as big of a deal as some make it seem. As long as politicians don't do stupid thing. Cough *tax cuts during booming economy. Cough* petty fights and shut down threats to raise debt ceiling. Cough* shutdown over a wall.

Why do you think it's not a valuable long term strategy? Worked for decades so far.

The relationship to GDP is meaningless. The relationship to the budget is not.

Currently the interest cost is $365 billion yearly. That's huge, it's half the defense spending. That's double what it was ten years ago. It is projected to be over $800 billion in ten more years. That's also 1/3rd, more or less ( currently) of all discretionary spending. More than any other component other than defense. In fact if you take the next five categories, Housing, Vets, Education, and Government, they don't even come close to that. You have to add in almost ALL discretionary spending outside of defense to equal the amount spent for interest.

That's not healthy and it's not sustainable. Whatever lies they spin about GDP and interest don't matter. Ten years from now we simply won't have the money to pay the military salaries and retirements without huge increases, social security spending will be much higher, and interest will more than double. All that in an economy growing at 2-3% if lucky.

Oops, why not viable long term? Well, first, it hasn't worked well for decades. We have had some serious financial problems and a Great Recession. We're deeply in debt from that recession and no way of paying it off, the interest payments are only going to grow. It's a bit like credit cards. If you are clever, you can live off them for years. Then you run out of available new cards to spread the debt to. I've seen that happen to friends living in Piedmont, with $80k in CC debt. Nobody argues that debt is good or bad. Only that when it reaches a point where a large proportion of your budget is servicing it, you are starting to have a large problem. When the prognosis is for that debt to grow over 100% in ten years, you have a huge problem. When major corporations have been issuing bonds as fast as they can, many of them basically junk, and municipalities issuing uncovered bonds as well, you begin to have a massive problem. The US is swimming in debt; personal, corporate, state, and Federal. It won't magically disappear because some arbitrary number called the GDP reflects some odd statistic.

 

[Entoptic]

PGE cleared of 2017 wild fires. Price mooning. It’s been halted twice today....

Ten minutes the halt will lift. Get ready!

Third halt now.... at 14.88

I assume this will drop again and then we wait for the 29th news. If it’s good this may moon again.

 

[Blankpage]

 

[Entoptic]

Dude we're in halt number 4 right now. Huge swings for such a low priced stock right now. Big boys are playing and I can't even read the books because they're flying so fast.

 

[UDRider]

The relationship to GDP is meaningless. The relationship to the budget is not.

Currently the interest cost is $365 billion yearly. That's huge, it's half the defense spending. That's double what it was ten years ago. It is projected to be over $800 billion in ten more years. That's also 1/3rd, more or less ( currently) of all discretionary spending. More than any other component other than defense. In fact if you take the next five categories, Housing, Vets, Education, and Government, they don't even come close to that. You have to add in almost ALL discretionary spending outside of defense to equal the amount spent for interest.

That's not healthy and it's not sustainable. Whatever lies they spin about GDP and interest don't matter. Ten years from now we simply won't have the money to pay the military salaries and retirements without huge increases, social security spending will be much higher, and interest will more than double. All that in an economy growing at 2-3% if lucky.

Oops, why not viable long term? Well, first, it hasn't worked well for decades. We have had some serious financial problems and a Great Recession. We're deeply in debt from that recession and no way of paying it off, the interest payments are only going to grow. It's a bit like credit cards. If you are clever, you can live off them for years. Then you run out of available new cards to spread the debt to. I've seen that happen to friends living in Piedmont, with $80k in CC debt. Nobody argues that debt is good or bad. Only that when it reaches a point where a large proportion of your budget is servicing it, you are starting to have a large problem. When the prognosis is for that debt to grow over 100% in ten years, you have a huge problem. When major corporations have been issuing bonds as fast as they can, many of them basically junk, and municipalities issuing uncovered bonds as well, you begin to have a massive problem. The US is swimming in debt; personal, corporate, state, and Federal. It won't magically disappear because some arbitrary number called the GDP reflects some odd statistic.

Ok.. It's projected to climb from 7.4% to 12.2% or so in next 10 years. Not ideal, but not the end of the world. For the military. About quarter goes to personal. Rest for toys and facilities, etc. There is more than enough room to cut. Of course the military contracts are treated as a form of federal aid for home their home states by some members of congress and manufacturing of military stuff is spread over multiple states to maximize the leverage on the state representatives.

Everything you mentioned wasn't caused by inflation. Also I realize it's tempting to compare federal debt to personal debt, but it's not a very good comparison. Although I would agree prevalence of personal debt in this country is a big problem. Not to mention Baby Boomer generation haven't saved enough for retirement and will have SS as their main form retirement income. Throw in increasing medical costs, and that would be the biggest issue over next 10-20 years.


But anyway. How about PGE. If someone who is more adventurous bought in at 6.36 they could have made nice chunk of money now. Looking at todays chart is cray cray. It doubled in 20 minutes.

 

[afm199]

Ok.. It's projected to climb from 7.4% to 12.2% or so in next 10 years. Not ideal, but not the end of the world. For the military. About quarter goes to personal. Rest for toys and facilities, etc. There is more than enough room to cut. Of course the military contracts are treated as a form of federal aid for home their home states by some members of congress and manufacturing of military stuff is spread over multiple states to maximize the leverage on the state representatives.

Everything you mentioned wasn't caused by inflation. Also I realize it's tempting to compare federal debt to personal debt, but it's not a very good comparison. Although I would agree prevalence of personal debt in this country is a big problem. Not to mention Baby Boomer generation haven't saved enough for retirement and will have SS as their main form retirement income. Throw in increasing medical costs, and that would be the biggest issue over next 10-20 years.


But anyway. How about PGE. If someone who is more adventurous bought in at 6.36 they could have made nice chunk of money now. Looking at todays chart is cray cray. It doubled in 20 minutes.

Of course there's room to cut. Government is notoriously wasteful. When is it going to happen? When you factor in student debt and credit card, the situation is just laughable. More borrowing and spending is not the answer. That's been a historical trick to pump up the economy, but it is not a solution, it's a band aid. That debt is not going away, nor is it decreasing. Ditto interest payments. If interest rates go up 1-2%, the economy is going to take a massive shit.

Yes, PG&E doubled, and it's down 13% today. That court decision didn't make it back into a healthy and booming company. PG&E is a great stock for people who use Index options to bet on small moves. It will remain volatile. So will the index options. Catch them right and you make a ton, catch them wrong and you don't.

 

[afm199]

What is it now around 250B, and like ~1.5% of GDP?

PS: Where have you been napping? It's 50% more than that and projected to be well over $900 billion in less than ten years.

It has doubled since 2017. Doubled. It's not that $368 billion is a huge amount, nor that it is unassailable, it is that it represents a massive sum much larger, and is due every year.............

$368 billion currently. https://www.nytimes.com/2018/09/25/business/economy/us-government-debt-interest.html

 

[UDRider]

arty

PS: Where have you been napping? It's 50% more than that and projected to be well over $900 billion in less than ten years.

It has doubled since 2017. Doubled.

$368 billion

Ok 368B. GDP is what around 20 trillion? So that's about 1.8%

 

[afm199]

arty

Ok 368B. GDP is what around 20 trillion? So that's about 1.8%

Yes, you mention that as if it meant something.

GDP is not a measure of productivity, it's a measure of commerce. If I spend one million in the neighborhood, and it goes to local workers due to services or products, and they in turn spend it on more services or products, it adds layers of millions to the GDP. It's the same million dollars counted several times.

The same question remains: "What services and goods can the government no longer provide in order to service the increasing debt?" GDP is not the answer to that.

 

[UDRider]

Yes, you mention that as if it meant something.

GDP is not a measure of productivity, it's a measure of commerce. If I spend one million in the neighborhood, and it goes to local workers due to services or products, and they in turn spend it on more services or products, it adds layers of millions to the GDP. It's the same million dollars counted several times.

The same question remains: "What services and goods can the government no longer provide in order to service the increasing debt?" GDP is not the answer to that.

Well you brought bit back that's why I replied. I already addressed if you want to count it at % of budget.

 

[2legs2wheels]

I expected some activity on this thread today but its quite in here.

Anyways there are a bunch of major earnings, interest rate decision, and china talks this week. Should be interesting.

 

[afm199]

Well you brought bit back that's why I replied. I already addressed if you want to count it at % of budget.

I haven't seen a post from you that really justifies your stand that debt doesn't matter, and that somehow the GDP is responsible for that.

 

[UDRider]

I haven't seen a post from you that really justifies your stand that debt doesn't matter, and that somehow the GDP is responsible for that.

Perspective. Yeah it sounds huge, but when put in percentage to GDP or budget, as you suggested, it shows how much it really matters. Let's say I pay 1000 dollars in interest a month, so 12k a year. Sounds a lot. Now say I make 500k a year. That's only 2.4%. Doesn't sound like that a big deal then. The greater threat to US economy is not dept, but uncertainty in it's political system.

This guy says it better, although his point is more towards austerity. There was a better one, but can't find it at the moment.

Another relevant talk. Congress testimony.