After raking in some profits on bitcoin (if they were lucky enough to find a greater fool) investors are now being targeted by the IRS. Apparently few bitcoin investors seem to be paying taxes on their gains. Most of them probably thought the anonymous currency wouldn't be on the radar of the IRS. Turns out however, that the IRS has forced Coinbase, one of the largest "digital-currency wallets" to give the government its customers' information. Laura Saunders reports in The Wall Street Journal: By March 16, the IRS will have data on about 13,000 Coinbase account holders who bought, … [Read more...]
Archives for March 2018
Clicks-to-Bricks: Online Retailers Move into Prime Real Estate
While major brick and mortar chains like Walmart and Target are doing everything they can to boost their online sales, and Amazon.com is jumping into the world of big box retail by buying Whole Foods, smaller online retailers are stepping into a retail void that has opened up in some of the best territory on earth, Manhattan. Esther Fung reports in The Wall Street Journal that online retailers are being courted by the likes of the Feil Organization, a commercial real estate firm, and others like it that see e-commerce companies looking for ways to expand their on-the-ground operations. Fung … [Read more...]
My Take: Inflation is Here, Now What do You Do?
Originally published February 15, 2018. Surprise! When there’s too much money created by central banks, inflation is the obvious byproduct. This isn’t rocket science, although bankers have the ego to believe that it is. Pure and simple, inflation is a monetary event. Picture a car flooded by too much gasoline—it doesn’t work—and you realize the predicament investors are in thanks to the Federal Reserve. It’s why you keep your bond maturities short-term and hold on to your GNMA. Read the rest of this story by clicking here. … [Read more...]
The Ten Worst Bets
Almost thirty years ago in 1989, I advised my readers on the ten worst bets for the year. Topping the list was overpriced real estate in New England, New York, and California followed by Japanese stocks and real estate. My long-time followers may recall how real estate prices fared after that projection. Housing prices cracked in all three regions and entered a severe downturn. Anybody levered and long in residential real estate took it in the neck. According to the Case-Shiller real estate indices for Boston, New York, and L.A., the peak to trough decline in prices ranged from 15% to … [Read more...]
House Prices Jump 9% in February
Home prices rose almost 9% on a year-over-year basis in February. That’s the biggest gain in four years. U.S. house prices are now 6.3% higher than their peak in July 2006. The ratio of house prices to income is creeping toward levels hit during the height of the last real estate bubble, yet housing affordability remains significantly better. What’s the difference between today and 2006? One of the biggest differences is the level of mortgage rates. At a maximum 28% of gross monthly income (ignoring taxes and insurance) today’s median income family can afford a mortgage of $356,000. Raise … [Read more...]
Crypto Volatility Hurts
Crypto currencies are getting hammered once again in markets this week. CNBC reports: Prices of major cryptocurrencies saw a sharp downward slide Thursday, amid closer regulatory scrutiny on the space and after Google announced plans to ban advertising related to the sector. The market capitalization or value of all the world's digital coins stood at $310.4 billion early on Thursday morning, down from $372.9 billion a day before, according to Coinmarketcap.com, which tracks prices based on different exchanges. Bitcoin, the world's largest cryptocurrency by market cap, traded as low as … [Read more...]
Will 3% Bond Yields Sink the Stock Market?
If yields rise above 3%, stocks will end the year down. That is according to Jeffery Gundlach, manager of the Doubeline Total Return Bond Fund. Gundlach is of course a bond fund manager, so one should take his views on stocks with a grain of salt, but he may not be wrong. Three percent yields aren’t high by historical standards, but global central banks have kept rates so low for so long that economies may have become overly dependent on ultra-low rates. Bloomberg reports: If yields on the 10-year Treasury break above 3 percent, there’s a high chance U.S. stocks will end the year down, … [Read more...]
Are Unions Even Helpful to Workers Anymore?
Employees join unions for two reasons; The first is that in many states they are forced to if they want certain jobs. The second is that they believe in some cases that union membership will benefit them financially. Perhaps it used to be the case that a union membership was a guarantee of a dependable pension and good benefits. Today though, joining a union for the big promises of a better retirement might be participating in a bout of collective hysteria. I'm not against unions, but I am against union leaders who lie to members about the reality of what union membership means. The … [Read more...]
The Irony of Bitcoin
The FT comments today (quoted below) on an upcoming meeting of G20 finance ministers and central bankers on bitcoin. One of the benefits of bitcoin, according to some of its proponents, is that it is a currency not controlled by government. That is indeed a benefit, and in a perfect world, bitcoin would supplant fiat money and we would all again have a hard currency to preserve purchasing power. But perfect isn't the world we live in. The primary purpose of the Fed is to manipulate the value of the currency. Take away the government's power to print money and you also takeaway their power … [Read more...]
New Michigan Law Reveals Big Trouble
A new law requiring communities to report their underfunded retirement plans is revealing some bad news in Michigan. The report shows that nearly a quarter of the state's local government units have underfunded their pensions or retirement health care plans, or both. CBS Detroit reports on the bad news: The list includes metro Detroit hubs like Southfield, Berkley, Flint, Centerline, Eastpointe, Mount Clemens, New Baltimore, Romeo, St. Clair Shores, Warren, Hazel Park, Grosse Ile, Hamtramck, Highland Park, Lincoln Park, Grosse Pointe Farms and Grosse Park Woods. The report is meant … [Read more...]