While I have never experienced outdoor bathrooms, my father sure has…. So when something in not correct in that warm or cool, comfy bathroom a little reflective perspective …
Immigrants Coming to the USA – WOW
Work School Family…. An astounding 98% of Immigrants come to the USA for one of these reasons…
Pretty strong and valuable reasons….. This from our buds at Visual Capitalists ….
Apartment List Research Department hit our in box earlier this week with an interesting statistic…with Copyright permission from earlier, we are gladly sharing…. Hope you find it as interesting as we do!
From Apartment List – More Spare Bedrooms than EVER before
This neat article By Chris Salviati hit our inbox this week and we wanted to share…
Anytime EVER is mentioned we take note…as EVER is a long time….
From the Article:
Using this definition, we find that 62 percent of all U.S. households had at least one spare bedroom in 2021, while 26 percent had exactly the required number of bedrooms, and 12 percent had too few bedrooms.
Who has all those bedrooms?
A lot of seniors aging in place …
Also, homes are just darn bigger!
Some great ideas on how this may be greatly productive in multiple ways…in the essence of time, will let you read the authors points near end of the article…good stuff…
On Thursday, October 26, 2023, the BEA (Bureau of Economic Analysis) released the Advanced Estimate aka first try at the Q3 2023 GDP for the US Economy….
As a quick reminder, GDP is one of the broadest measures of US Economic growth …. heck two consecutive negative GDP prints is the basic definition of a recession….back to the print…
The most followed headline number was a 4.9% increase…. at first blush a very positive number and a bit of a head scratcher…. especially given Capital Market’s recent crankiness…..
Government defense spending was (thankfully under current Geo Politics) up huge due to defense spending. Defense spending is not the same as organic Economic growth… it just does not filter through the system the same…still VERY important under current circumstances….
Have a Great “Now you Know the rest of the GDP Report” Day!
We definitely wanted to talk about this, but it is rather complicated, so it makes our Advanced Analysis Series….Part 5
Inverted Yield Curve is a Big Deal
When short term rates are higher than long term rates, a very unusual and non sustaining event, it is called an inverted yield curve.
Here is a list of over 30 – YEP over THIRTY different articles we have written in just the last 5 years if you need a refresher…
The Un-Inversion (the actual process) or at least Narrowing of Inverted Yield Curve a BIG Deal too
Orange line below the white/zero level = Inverted
Maybe Un-invert, or for sure narrowing?
Note orange line headed towards zero or break even…..Narrowing for Sure –
In true it is different this time…. the UN-inversion is occurring because of what is called a Bear Steepener … something we have not seen in a LONG time…
Note going back all the way to the 1980’s, the most prevalent type of narrowing or Un-inversion is a Bull Steepener, or the FOMC (Federal Open Market Committee) lowering rates – noted by the above white line on the chart (2 year Treasury) marked by the arrows….
A bear steepener occurs when there’s a larger spread or difference between short-term bond rates and long-term bond rates–as long as it’s due to long-term rates rising faster than short-term rates.
What does all of this mean and why are we talking about it?
Bear Steepeners occur when Capital Market Participants begin to price in higher inflation expectations … OR maybe this time, finally accepting the FOMC is not ready to quickly lower rates! hmmmm
You see now why we went for another edition of Advanced Analysis… Stay tuned on this, we will be monitoring closely and will bring you more as this plays out!
Have you ever had some type of team that you follow, could be sports related or the other, that has a pretty good record, seems to be doing well on the surface, but when you look a little closer it becomes apparent that this team is dominated by the performance of just a very few individuals?
Participation or lack there of
There are a lot of similarities in the above analysis to the current capital market environment. Just like the vulnerability of your favorite team, should some of those dominant forces not perform well or heaven’s, even worse, get injured, the real truth will begin to reveal itself.
Capital markets that are thinly led can have distinct vulnerabilities. On a positive side many of the players can catch up to give greater participation. An optimistic outcome. On the negative side just like our team, should some of those more important subjects falter, reality may sink in.
Interest Rates
As mentioned in our Q4 Newsletter, higher interest rates are the tone of the times currently. Our lead article talks about the tremendous positives that higher interest rates have on pensions in the form of higher fixed income earnings. In the very short term, it is a headwind for fixed instruments, but over the long term safer, steadier, and more normalized expected returns.
Political Season Already
While it only seems like yesterday when we had a presidential election, it is hard to believe that next year, approximately this time of the year, we will have another. Recall, there will be many headlines associated with the political process, many of them possibly frightening. You know that we are careful to comment on headlines and things that have not become law, but nevertheless the frightening headlines may appear. Just remember there is a difference between a desire, speaking, debating, and a law.
Positive Seasonality Headwinds
Looking forward to the final quarter of the year, just as it gets cooler in most parts north of the equator, capital markets tend to have positive historical reference. While we are always careful to say this time is different, the Federal Reserve, if resolute in their desire, have both feet firmly pressed on the economic brakes, and as of yet have not been successful in achieving their goals.
One quick note on an Economic number released this AM by the Bureau of Labor Statistics… Non Farm Payroll…. The actual number is much larger then expected A 336k, E 170k ..
While good for workers, this is not what the Federal Reserve is wanting i.e. Slower Economy… Sorry for the heavy, but large enough surprise to mention!
Ok, back to our regularly scheduled Friday ease into our weekend reading…
This coming Monday, October 9th, 2023 … locally is a big day coinciding with a possible Bank Holiday for some across the country and with the post office’s being closed too.
Meet the Texas State Fair
The most important day for all Students in the area and surrounding suburbs … A Holiday! In order to go to the Fair… Heck our gangs even have Tuesday off too! Wow
A big state border rivalry Football Game – Texas V Oklahoma
Fried food of almost any type including things from Jello, to ice cream to Fudge… not easy on the belt line
A huge mascot that even talks “Howdy Folks!”
Today is a Friday, heading into a possible long weekend, depending on the perch…. but remember, on Monday, Money may, or may not move Error on the latter!
In true Gomer Pyle like, “Surprise, Surprise, Surprise” Like fashion….. the US shutdown was averted with some come together votes on Saturday…. Here from AP
We will be watching interest rates for relief…. which is what would be expected!
Capital Market Comments
Meet the Koyfin – A Bloomberg Competitor
With so many options of services over the years, and having tried almost all…. we are careful to embrace new systems, but we never avoid….and constantly try to improve…
Hello Koyfin – Very comprehensive, and most importantly very clear in showing information!
Have a Great Day, Talk to You at the End of October !
Welcome to our Video and Audio Podcast Review of our Q4 2023 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.
Click the Download button below, for a direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page
Rate Increase GOOD for Pension Plans and Pension Recipients
Special thanks to Milliman and Rebecca head of medial relations for allowing us the ability to reference this fantastic data… also sourced at the end of our post/article.
Here are the top 100 pension plans, a lot of names you likely know and maybe even have a pension with… At least one family member included in this.
With higher interest rates, something we have mentioned numerous times… Notice because of a rather complex future liability projection, pension plans for the most part are FINALLY funded….YAY
Don’t Fight the Fed! Wait, are we Fighting the FED? YEP
This unusual correlation especially when the blue line is going down, represents the FED (Federal Open Market Committee) pulling money from the economy or trying to slow the Economy.
Add higher rates, at the fastest pace ever….
Interesting that participants are fighting the FED, even though they regularly quote “Don’t Fight The FED!”
Stimulus still sloshing around in the Economy…
True-Up Reminders – 401k and the Like
In the year 2023 (Currently heading towards a close) the maximum amount WE (not including matching) can contribute is $22.500 and for those either age 50 or older or turning age 50 happily in 2023, you get a nice catch-up amount of $7,500 bringing your deferred amount to a whopping $30,000!
Pro-Tip – Contribute evenly throughout the year, with a terminal amount of maximizing in late November or early December.
Pro-Trick – Similar to rushing/upping your contributions near the end of employment to maximize levels, if you are new to an employer and wish to maximize your contributions for the year, dump all you can to maximize your contributions now, with the intention of dropping that contribution level down to a normal level (see Pro-Tip above) after the turn of the calendar.
Do Not Overfill Duplicate Plan Years
Remember, if you have contributed to a plan earlier in the year via another employer, your new employer will not be able to throttle your contributions back if you happen to go over the total annual limit. Reach out for help and clarity on this!
Be Aggressive in New Plans
Lastly, in new plans, starting from scratch with new contributions, allocation should be wide open and aggressive with the hope of choppy entry points as your contributions make up the majoring of the plan and will take advantage of the ups and downs in the early years of the plan.
Cyber Reminder- Tips and Tricks
If there’s one thing, for those of us with little time or patients for a long read that we would like you to take from this article it is that most cyber intrusions come from an e-mail that has a bad actor with a hot link click, do not click on that bad hot link!
The second thing and more encouraging, most cyber security situations are not extremely complicated and are allowed by a simple letting of our guards down- see above point!
Handy tip #1– Use an only known to you, phrase or password.
Handy tip #2– Do not ignore the recommended updates!
USB/Pen Drives a No No Avoid the USB/pen drive at all costs unless you absolutely, 100% know where it came from
RMD Age Changes and other Important Dates
RMD (Required Minimum Distributions)
One of the most important and likely most confusing due to the recent multiple updates is the adjustment of Required Minimum Distributions (RMD) They are now mandatory to commence for those aged 73. Those turning 75 after 2033, your new RMD age is 75. Recall, these just a few years ago, moved from age 70 1/2 to 72, now to age 73 and eventually age 75. No wonder we are all confused!
Social Security Mandatory Commencement Date reminder age 70
The current maximum age that you may defer commencement of Social Security still remains at age 70, well below the new younger thresholds that we hopefully are all feeling.
The earliest one may take Social Security remains age 62, with a 25% discount to the full retirement age (FRA) benefit amount AND has a maximum earnings level of $21,240 from W-2 or 1099 (working income) not pension, investment or other non working types of income.
Have a Great Fall! Talk after the turn of the Calendar!
Check that Social Security Statement no Matter your age
While a late delivery, we managed to remind all (including ourselves) why we need to review annually our Social Security statement, here in this post…. along with some new features from the SSA (Social Security Administration) in their updated website!
From the post:
Confirm your credits via your Earning History
Confirm you received credits for your hard earned money is very important, and easy…. here is what the screen shot look like – Below- oh, there are new drop downs for excellent help if your credits are not showing
Capital Market Comments
Not one, not two, not three …. but FOUR Downgrades with one called by ourselves – Tap Tap on the back
In this first post we commented that Fitch put a shot across the bow of the USA Credit Boat with a mild downgrade from AAA to AA+
Not to be outdone, another of the big three credit agencies, Moody’s chimed in as we discussed here
Then back into the pool goes Fitch with ANOTHER downgrade…. here we discussed Fitch’s second downgrade and mentioned we were surprised the One of the Big Three were silent….
BOOM that night of our above post, the other big three S&P Global Markets came to the party…. as we discussed here along with a timely fun YTD Bankruptcy Graph from our bud at Visual Capitalist
These downgrades among a couple of other items, not surprising, led to an upward push on rates… highlights to the far right…. already headed back to norms!
Have a Great Day, Talk to You at the End of September !
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
Background
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
How Many and Why Immigrants come to the USA … Complimentary to the USA … From Visual Capitalists …
While I have never experienced outdoor bathrooms, my father sure has…. So when something in not correct in that warm or cool, comfy bathroom a little reflective perspective …
Immigrants Coming to the USA – WOW
Work School Family…. An astounding 98% of Immigrants come to the USA for one of these reasons…
Pretty strong and valuable reasons….. This from our buds at Visual Capitalists ….
On a Thanksgiving week….
Hopefully That Bathroom may be pretty comfy
Have a Great “Thankful Thanksgiving Week” Day!
John A. Kvale CFA, CFP
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Posted in Economy, John Kvale, Market Comments, Personal
Tagged Immigrants, Thanksgiving, Visual Capitalist