patrick.net

ECBB,

Debt is a tool….just like a knife. It cuts both ways. With that said, do what makes you feel comfortable. A piece of mind is worth a lot.

What I’ve learned is that liquidity = value during time of crisis like a recession or a job loss. We don’t have access to the liquidity when we’re paying down our mortgage…especially at 3% interest rate.

How about an alternative? Instead of paying $2k/mo towards mortgage principal, put that money in short term CD’s. Quite a few banks offer north of 4% now. Here’s a sheet I recently got from Fidelity.

Once you have amassed enough cash from these CD’s, you can payoff the house at once if you’re desired to. In the meantime, hang onto the liquidity and use CD’s as a way to offset the interest you’re paying on your mortgage?

To emphasize that debt is a tool, here’s a short read from someone who shared his personal experience going from being a normal Joe to having a net worth of $10M, etc…

“When I finally achieved a net worth of $250,000, I realized that within a few years I could be a millionaire.

By the time I had a net worth of $500,000, I realized that I was absolutely going to be a multimillionaire.

A few years later, when I became a millionaire, I realized that three million would be fairly easy to achieve.

When I reached three million a few years later, I realized that I could be at five and ten million in no time at all.

The time from five million to ten million was much shorter than the time that it took me to achieve my first $250,000.

I had a steady income, just an average paying salary. I was living below my means and that allowed me to invest in, and eventually buy, the company that I was hired 20 years earlier to start. Then I was able to pay myself a little more and receive benefits of business ownership on a larger scale.

Any additional income came from various real estate investments.

Today, nearly forty years later, 95% of my net worth can be attributed to real estate.”

Of course you can make money in real estate.

The problem is you may have an illiquid net worth; my friends in Santa Cruz own expensive houses but can't raise $1000 in a hurry.

My mutual funds are liquid; I can move a mouse and put a lot of dough in my checking account anytime.

But it's not too bad collecting rent either if you own more than one place.

https://nakedemperor.substack.com/p/this-weeks-must-reads-18-24-march

Patrick says

https://nakedemperor.substack.com/p/this-weeks-must-reads-18-24-march

overdue for a recession but not going to happen (as far as being reported in the economic data) during a re election year with a Democrat in the White House

they let the air out or burst right after the November election just like gas prices conveniently or "miraculously" increased after the 2022 midterms because of how they manipulated and misused the strategic oil reserve

AD says

Patrick says

https://nakedemperor.substack.com/p/this-weeks-must-reads-18-24-march

overdue for a recession but not going to happen (as far as being reported in the economic data) during a re election year with a Democrat in the White House

they let the air out and burst right after the November election just like gas prices conveniently or "miraculously" increased after the 2022 midterms because of how they manipulated and misused the strategic oil reserve

Agreed

AD says

gas prices conveniently or "miraculously" increased after the 2022 midterms because of how they manipulated and misused the strategic oil reserve

Gas prices are creeping up now. It can't be good for the incumbent. Why aren't they "manipulating" them down?

Price suppression only goes so far. The natural force of the free market cannot be contained forever. Hyperinflation is the only logical outcome of central banking..

30 billion deficit month after month means they will have to get it back with inflation, interest, taxes and the climate fraud. Those 5% bank rates only extend out 5 years that will be here soon after that who knows.

Eric Holder says

AD says

gas prices conveniently or "miraculously" increased after the 2022 midterms because of how they manipulated and misused the strategic oil reserve

Gas prices are creeping up now. It can't be good for the incumbent. Why aren't they "manipulating" them down?

Because they already drawn a lot of oil from the strategic reserves for about 7 months before the 2022 midterm election.

.

They'll just let the Trump tax cuts expire in 2025. There is not enough consensus in Congress now (and likely in 2025 to 2027) to at least partially renew them.

So that extra tax receipts or revenue will go to reduce the deficits (increase "net income" or cash flow) if the federal government can restrain spending increases.

.

AD says

So that extra tax receipts or revenue will go to reduce the deficits (increase "net income" or cash flow) if the federal government can restrain spending increases.

There will be no 'extra' tax receipts or revenue. In fact, it will go down.

The tax cuts were not for 'the rich' as the media falsely claims but for the middle class at the expense of said rich. Example, the rich's precious SALT deduction will be restored. The Treasury will lose hundreds of billions in revenue when that happens.

Then there are the Laffer Curve effects blown away from the reversion of the business tax code back to what it was.

DemocratsAreTotallyFucked says

The tax cuts were not for 'the rich' as the media falsely claims but for the middle class at the expense of said rich. Example, the rich's precious SALT deduction will be restored. The Treasury will lose hundreds of billions in revenue when that happens.

Then there are the Laffer Curve effects blown away from the reversion of the business tax code back to what it was.

Absolutely true.

Patrick says

Damn, if you could borrow at 2.1% and buy US Treasuries at 4.5%, you'd have a perpetual money machine.

Ding, ding, ding... our fearless leader points out the yen carry trade before it went south. Feels like old times. Wonder what other secrets are hiding in our financial systems...

Oh looky!

Democrats are suddenly concerned about the national debt!

"One quarter of the war budget would have fixed Social Security for the next seventy-five years."

https://www.rollingstone.com/politics/politics-news/the-2-trillion-war-44421/

DemocratsAreTotallyFucked says

Oh looky!

Democrats are suddenly concerned about the national debt!

... but "conservatives" suddenly don't mind neither $5K child credit nor $20 Federal min wage. And I suspect if their guy came up with the idea of POTUS not allowing potatos to get more expensive they would love it too. (They hate, HATE it now).

🤡 world.

RWSGFY says

but "conservatives" suddenly don't mind neither $5K child credit nor $20 Federal min wage. And I suspect if their guy came up with the idea of POTUS not allowing potatos to get more expensive they would love it too. (They hate, HATE it now).

🤡 world.

You forgot to include the word 'Soviet' in that bs.

Much of this debt is denominated in USD or currencies with reserves denominated in USD.

That is a LOT of future demand for USD. So I doubt the dollar is going to crash soon.

DemocratsAreTotallyFucked says

RWSGFY says

but "conservatives" suddenly don't mind neither $5K child credit nor $20 Federal min wage. And I suspect if their guy came up with the idea of POTUS not allowing potatos to get more expensive they would love it too. (They hate, HATE it now).

🤡 world.

You forgot to include the word 'Soviet' in that bs.

Thanks, bud. Here you go: Soviet Union had price controls on everything (and empty shelves and long lines in every store) and paid assembly line type of workers 2x-7x more than it paid engeneers. And it was (and still is) a shithole as a result of these sound and conservative econ policies.

I bet if I presented it like "people who get sweaty turning wrenches and doing REAL WORK should be paid MOAR than the assholes whose job is to tap on a keyboard and drag a mouse around", I'd get many "conservatives" latch on that lure. 🤡

DemocratsAreTotallyFucked says

DemocratsAreTotallyFucked says

DemocratsAreTotallyFucked says

yes, and Harris said in a campaign stop in Pennsylvania she will support fracking

she thinks she is going to bamboozle enough independent voters

.

DemocratsAreTotallyFucked says

DemocratsAreTotallyFucked says

As a parent, I don't want either. Lower the overall cost of living. We have the resources. A bit behind on manufacturing, but it's welfare at the core of it. I don't want money I didn't earn. No one should. Because it will expected in the future and never go away. No one will be motivated.

I don't care if it looks like she's copying JD. They're both wrong. Unless you're disabled, work. Or support someone that works. Government hand outs should make most men feel weak. Scary that it doesn't.

WookieMan says

DemocratsAreTotallyFucked says

DemocratsAreTotallyFucked says

As a parent, I don't want either. Lower the overall cost of living. We have the resources. A bit behind on manufacturing, but it's welfare at the core of it. I don't want money I didn't earn. No one should. Because it will expected in the future and never go away. No one will be motivated.

I don't care if it looks like she's copying JD. They're both wrong. Unless you're disabled, work. Or support someone that works. Government hand outs should make most men feel weak. Scary that it doesn't.

It's not a hand out if you're taxed too much to begin with, or taxed at all. To make this go away, come up with a flat tax of 15%-20% max for everyone, regardless of source of income. Otherwise it's valid as society will break down without kids wiping boomers asses

mell says

It's not a hand out if you're taxed too much to begin with, or taxed at all. To make this go away, come up with a flat tax of 15%-20% max for everyone, regardless of source of income. Otherwise it's valid as society will break down without kids wiping boomers asses

right now based on what my neighbors told me, their household our effective federal tax rate is around 20% including social security and medicare tax (for self employment)

so 80% remains ... let's call it 80 ...about 40% of that (32) is spent locally so the sales tax rate (6% Florida and 1% county) is applied

about 40% of their total gross income is spent on housing (mortgage, property tax, property insurance and HOA fee) and about 10% of that 40% goes to property tax

(100/100) x 20% + (32/100) x 7% + (40/100) x 10% = 20% + 2.24% +4% = 26.24%

about 26.24% of their gross income goes to federal taxes, state/county sales tax, and property tax

.

mell says

Otherwise it's valid as society will break down without kids wiping boomers asses

Robots.

mell says

Otherwise it's valid as society will break down without kids wiping boomers asses

Robots. AD says

is around 20% including social security and medicare tax (for self employment)

They are part of the 50% that pretty much only pay FICA and either zero or little federal income taxes, then.

mell says

It's not a hand out if you're taxed too much to begin with, or taxed at all.

Are they promising a cash payment? Or a tax credit? You can't get a credit on your taxes unless you pay taxes.

Onvacation says

mell says

It's not a hand out if you're taxed too much to begin with, or taxed at all.

Are they promising a cash payment? Or a tax credit? You can't get a credit on your taxes unless you pay taxes.

Wanna bet ????

Plenty of welfare Hoes do exactly that.

Onvacation says

You can't get a credit on your taxes unless you pay taxes.

Yes, you can. The EIC can give you a refund when you do not pay taxes. It is a negative income tax.

HeadSet says

Onvacation says

You can't get a credit on your taxes unless you pay taxes.

Yes, you can. The EIC can give you a refund when you do not pay taxes. It is a negative income tax.

Same with child tax credits.

DemocratsAreTotallyFucked says

mell says

Otherwise it's valid as society will break down without kids wiping boomers asses

Robots.

That is why I see more productivity gains with senior care. They'll use technology to double the number of seniors cared for by 1 nurses aid or LPN.

Also expect to see more work visas for nurses aids.

Senior care will be a growth industry.

.

Ok, a quick answer as to why everybody's banks are suddenly all at once asking their customers to update their financial profiles.

You see our intrepid risk management professionals at the various banks have all of a sudden come to a startling conclusion. You know all that student loan debt that is not getting paid back. Well, there were no credit ramifications the last few years for withholding payments. These same bunch of Black and Hispanic debtors have run up their credit card bills. They have no intention (and never did) of repaying these loans.

Looks like the banks are gonna have to write off at least $200 billion in bad credit card debt. The wizards of Wall Street get to learn the lesson again that if a loan is bad, it doesn't matter what the interest rate you charge is. Of course, if long term rates don't plummet, the banks will have to realize those persnickety losses on their "Hold to Maturity bonds" because they will be forced to sell them to cover the losses on their credit card portfolios.

Yes Virginia...there will be another bank bailout.

AD says

Senior care will be a growth industry.

As will crematorium and mortician.

There should be no tax credits for anything, especially someone else's brats.
If you can't afford them, don't have them.