News

Inflation Is Real

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Some (me) people have been under the impression that the claims of inflation have been overblown. The December numbers suggest that I am wrong, even if the chicken-littles aren’t right. The numbers say core prices are up 5.5% year over year for December. Remember that this comes off an unnatural pricing environment during the pandemic, but these numbers are big enough to take seriously. The Labor Department reported Wednesday that excluding volatile food and gas prices, so-called core prices surged 0.6% from November to December. Measured year over year, core prices jumped 5.5% in December, the fastest such increase since 1991. https://apnews.com/article/consumer-prices-inflation-c1bfd93ed1719cf0135420f4fd0270f9 Supply chain problems are part of the cause, but the economy does have too much money sloshing about. The key is how much, and how fast should the Fed be raising interest rates. My primary concern is still that raising rates too fast could crush this unnatural economy still affected by Covid and its related problems. Unfortunately, there is no choice now. Runaway inflation will kill the economy just as dead as rising rates. The trick is still the supply chains. Prices won’t come down with less spending, unless the supply is there to react to lower spending. …

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Fed Raising Rates 2022 Inflation and Economy

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Fed Raising Rates 2022 Inflation and Economy 1

At all times the Federal Reserve’s Open Market committee has a dual task. One task is to guard against inflation. The other task is to not make the economy implode. In most cases, this isn’t as hard as it sounds as long as you have strong Federal Reserve bankers who don’t cave to Wall Street’s pressure (or dance like monkeys to in the first place.) For 2022, The Fed has one of the tricky times. This is what Wall Street pressure looks like: December payroll data showed a far fewer than Wall Street said it would be addition of 199,000 to payrolls, but wages did increase 4.7% year over year. There is a very big catch here. Remember that the economy got messed up rather good with Covid and it really isn’t done with Covid, so all of these numbers have to be taken against the fact that last year was not good and this year isn’t so much a raging economy as it is putting the pieces that fell off the board back up on it. Don’t forget to read our Zelle review. That being said, inflation is up, even compared to pre-Covid and you don’t want to fall …

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What To Do After Identity Theft

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Identity theft is way too common. Knowing what to do after identity theft is critical. With the number of places that your information is stored online, identity thieves don’t even have to leave their couch to steal your identity. Add in the number of papers you throw away with your information, and the amount of mail that comes with everything an identity thief needs, and it is a wonder your identity hasn’t been stolen before. Unfortunately, the financial companies involved are big businesses and they don’t want any laws getting in the way of them selling new credit, products, and services. So, when it comes to protecting yourself after identity theft, you are on your own. Steps To Take After Identity Theft First, understand that you are now involved in what may be a long battle between you and identity thieves. Even if you shut down the first wave of thieves, stolen identities are sold, reuse, resold, and reused online and around the world. Basically, these steps to take after identity theft should be considered just the first steps to take after identity theft. Freeze Your Credit: – There are a million ways criminals can use your stolen identity to …

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Advanced Mortgage Tricks

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advanced mortgage tricks

Advanced Refinance Tricks For the Financially Well Off Got plenty of money socked away for the kids’ college? Already have a retirement plan and funding it well? When someone asks about an emergency fund do you think, sure, which account would I use? Then, here is a trick for you. Mortgage interest rates are at historic lows. As I write this, it wouldn’t be hard at all to get a 3% mortgage if you have good credit and put 20%+ down. What if, you took $100,000 out of your mortgage with a refinance that lowered your interest rate enough to cover all closing costs, and then, put that $100,000 into a solid dividend paying stock? Just for example, right now, Verizon pays something like 4.85% per year at its current $52.50 stock price. If you took the $100,000 you got from your cash out refi, and invested in in Verizon stock as a long-term investment, Verzion would spend the next 10 or 20 years paying you the equivalent of 4.85% on your $100,000 stock investment. Which means you are earning more on your investment than you are paying on the extra mortgage principal. Now, you do have to pay 15% …

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Unemployment Rises Less Than Expected

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unemployment numbers

Ah, the world of finance, where the rules are made up, and the points don’t matter. OK, I stole that from Phineas and Ferb, but sometimes it fits better than it does even for a fake game show. Today, unemployment numbers were released in which the number of Americans filing for unemployment increased. That means more Americans are jobless than before, despite the so-called worker shortage and the Great Resignation. Don’t forget, you don’t get to file for unemployment when you quit, so these are still Americans who were fired, downsized, let go, or their employer closed. More unemployed Americans is bad, in general, but… Economists were predicting (modeling, similar to what meteorologists do) that there would be even more Americans filing for unemployment, so the fact that more Americans are unemployed, but not as bad as we thought, is good news. Kind of. Check out my review of the new fintech investing apps. The reality is that numerous traders and investors made their trades expecting higher unemployment numbers would push down the price of securities and investments. Since they were wrong, the price of those investments are rebounding. This is “good news” in the world of finance, and a …

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Build Back Better Passes House

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Build Back Better Passes House 2

For the last couple of administrations at least, the Democrats are better at naming their bills. The Build Back Better package not only has a snazzy name that makes it sound like a good law, it also abbreviates down as BBB, or even B3, or whatever. Anyway, the Build Back Better package is good news for American taxpayers and has a lower deficit impact that the Republican’s signature tax cut bill from a few years ago. Plus, if you understand economics well enough, you know that the rising inflation actually makes all of this cheaper. But, this is a finance blog… The news this morning is to realize that this package once again started in the house, and it once again has to go to the Senate where that one corrupt Senator from Arizona has to hem and haw and collect donations for a while before voting on the package, and they have to do the Manchin dance or whatever to. The important thing to remember is that this is not a law yet, and whatever is in it might not be in it when it does eventually become a law, so don’t start planning your taxes around it. If …

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What Is The Flippening?

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What is the Flippening? What does Flippening mean? When you get a word like that, you know it comes from the “new school” investors. Maybe it’s the meme-investors. Maybe it’s a new retire early term. When Is The Flippening Going to Happen? You just knew something like the Flippening would be about crypto. Is Acorns a scam? Now, I don’t usually do a lot of crypto advice here because, honestly, I think everyone is still figuring it out, and I’m not trying to build a cutting edge crypto reputation or anything like that. However, I cannot resist a good acronym or term, and the Flippening is just too good to pass up. The Flippening sounds sort of horror movie-ish, and you aren’t wrong, per se. The Flippening refers to the potential future event when another cryptocurrency, likely ether, overtakes bitcoin in market capitalization. In other words, when bitcoin and ether “flip” places as the #1 and #2 cryptocurrencies. Why Is There a Flippening? You have to really dig into cryptonetworks and how they work to get a full answer, but the short-version is that a recent upgrade to the ethereum network makes it more likely that ether, ethereum’s native token, …

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Trump SPAC Investing

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Anyone who reads Finance Gourmet on a regular basis knows that the new Trump SPAC isn’t the kind of thing I’m going to analyze, let alone recommend investing in. But, for some bizarre reason, I keep get some questions, so here is some really quick Trump SPAC company facts. What Is a SPAC? SPAC stands for Special Purpose Acquisition Company. It is sometimes called a blank-check firm. It’s a weird setup where a company that is a publicly traded company buys a private company, thereby acquiring its business and making it a publicly traded company without having to go through the official IPO process. What Is Trump’s SPAC? In this case, Trump Media & Technology Group, which has no products, no revenues, and no profits. Is merging with already publicly traded company called Digital World Acquisition Group. Now, Trump Media & Technology Group can be publicly traded. Check out my Zelle review. Why Is Trump’s SPAC rising so much? If you remember earlier this year when numerous investors piled into AMC in part as some sort of crusade to stick it to the man, then you have some idea of what is going on here. Investors, some old, some brand …

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Will Fed Raise Rates Sooner Than Expected?

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fed raise rates

There are several economists out there predicting that rising inflation will push the Federal Reserve to raise interest rates sooner than project. In fact, half of the Fed Board was talking about a rate increase in 2022 instead of the previously telegraphed 2024. But, does that mean The Fed will raise rates sooner than previously stated? Inflation Isn’t Coming All of this is predicated on inflation rising. The concern right now is that prices have been rising this year. This is all true, but this is October and that means the holiday shopping season is upon us, and chances are it won’t look very good come January. We’ve already seen the job reports showing that job growth is slowing despite a supposed worker shortage. Unemployed people spend a lot less at Christmas. But, there is more than that. Employed people who know unemployed people spend less as well due to a fear that they could soon be unemployed as well. Add to that reports that there are going to be supply chain problems, and that container ships have to wait excessive times to get their cargo unloaded by dock workers on the west coast and you end up with a …

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Uber’s First “Profit”

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uber profit

One of the reasons I write Finance Gourmet is because of all the bizarre finance articles out there masquerading as news while actually serving as cheerleading, PR pieces for companies. It’s a little bit like those articles from White House press briefings that are basically stenographers taking the White House pronouncements as the full news while leaving out all sorts of necessary information just because the Press Secretary didn’t serve it up on a platter. Uber Projects Quarterly Profit The headlines out there in the financial press all say that Uber projects that it might have its first every quarterly profit next quarter. The facts? Well… It’s always refreshing when the non-finance guys aren’t willing to go along with the company dog and pony show. I don’t get to quote Gizmodo a lot here on a blog about financial independence, but the guys over at Gizmodo, where they write about technology, get full marks for their headline, “Uber Says It’s on Track to Maybe Make a Fake Profit.” Now THAT’S a legitimate headline. Even the subheadline spits some truth. Uber’s profit will be based upon adjusted EBITDA. If you’re into investing enough, you’ve heard of EBITDA. It’s a real financial …

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