Discussing good news from the Conference Board, Wall Street fears the tax reform plans and maybe you should too, the Low Income Housing Tax Credit and more!
The Conference Board Leading Economic Index for the U.S. Increased
Great news as the Conference Board Leading Economic Index for the U.S. increased 1.2% in October. This is quite a bit better than the 0.1% increase in September and a 0.4% increase in August.
Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board said:
The US LEI increased sharply in October, as the impact of the hurricanes dissipated. The growth of the LEI, coupled with widespread strengths among its components, suggests that solid growth in the US economy will continue through the holiday season and into the new year.
Let’s hope we do see solid growth. Of course, we have to be concerned about something that could have a dramatic and negative effect on the economy.
Like the proposed tax reform bills…
Wall Street Fears Tax Plan Could Kick Off Economic Euthanasia
From Vanity Fair:
Wall Street vets say an attack on blue states could start a chain reaction in the housing market. “Will this be the first tax cut in American history that actually results in a recession?”
“It’s a Ponzi scheme,” a Wall Street executive told me, dismissing the idea that a multi-trillion dollar tax cut for multinational corporations would trickle down throughout the economy and also pay for itself. It’s a view that’s widely shared among the bankers, hedge-fund managers, traders, and quants whose job it is to determine, with Vulcan accuracy, how the Republican tax bill that passed the House yesterday will actually affect the markets. It’s also more than a little ironic, given that the plan was spearheaded by two former senior partners of Goldman Sachs turned Trump shills—Gary Cohn and Steve Mnuchin—a pedigree that has done little to reassure Wall Street veterans who worry that the White House may accidentally nuke the economy in the name of “tax reform.” “Will this be the first tax cut in American history that actually results in a recession?” the executive asked.
I know many will not be able to consider this article since it is critical of Trump. But for those that are sill able to think for themselves, it appears this tax plan will not be good for ALL of America.
We may not agree on many things but we can all agree on one thing. We want what is best for America and all Americans.
Whether you are Blue Team or Red Team, we all want what is best for America. Even the independents like me want what is best for America.
And we really need to consider that Cohn and Mnuchin are behind this. Especially if you look at Mnuchin…
Steven Mnuchin & Louise Linton: Embarrassing
From National Review:
Mnuchin, formerly of Goldman Sachs, is pure Wall Street malignity in concentrated form, a guy who looks like he was born wearing a blue suit and braces. And that, in itself, is okay: A little Scrooge McDuck–style sphincter-clenching is kind of what you want in a Treasury secretary. But Mnuchin is not satisfied to be a pure example of one kind of awful: He has to adulterate his Wall Street awfulness with Hollywood awfulness.
Hence, the wife.
Mnuchin is married to Louise Linton, a Scottish actress. Put an asterisk next to that job description, though: She’s an “actress” in the same way that a lot of trust-fund kids are “entrepreneurs” and “business owners,” and a lot of dim children of CEOs are “executive vice presidents.” She was raised partly in a castle outside Edinburgh, and most of her immediate family is employed by Linton Hay Property and the Hay Trust, which is — this will surprise you — in the business of renovating and leasing castles owned by the Linton-Hay family.
In case you somehow missed it:
Treasury head, wife mocked for photo of them holding sheet of new $1 bills: https://t.co/zSfjMT8aVl
— AP Politics (@AP_Politics) November 16, 2017
It seems like I remember someone saying something about draining the swamp….
Big News About the Low Income Housing Tax Credit
First up is some news from the FHFA:
The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac (the Enterprises) will be allowed limited re-entry into the Low Income Housing Tax Credit (LIHTC) market as equity investors, effective immediately. The LIHTC, established in the Tax Reform Act of 1986, is the primary government program available to address the shortage of affordable rental housing through the creation and preservation of affordable units in underserved areas throughout the country. FHFA’s decision was based on several factors, including furthering the Enterprises’ mission to support affordable housing and ensuring that they could provide a countercyclical role in the LIHTC market in the future if needed.
FHFA Director Mel Watt said:
This decision demonstrates our commitment to supporting affordable rental housing in a controlled and thoughtful manner intended to stabilize the market and not to compete with private investors. Most of the Enterprises’ investments will be used to facilitate transactions that support underserved markets and complement our Duty to Serve (DTS) priorities.
Excellent news as the need for affordable housing is just as dire as the need for more homes for big a problem as the tight inventory of homes for sale.
NAHB also said:
Senate Finance Committee Chairman Orrin Hatch (R-Utah) has released an updated version of the Senate tax reform bill that includes a number of changes that are favorable for the Low-Income Housing Tax Credit (LIHTC).
The revised Senate tax package still fully retains the LIHTC and private activity bonds. In addition, it includes several provisions from the Affordable Housing Credit Improvement Act, legislation introduced in the Senate by Sens. Maria Cantwell (D-Wash.) and Hatch designed to make the LIHTC more effective.
It is good to hear that the Senate’s version of the tax reform bill would be good for the LIHTC.
Who Loses Under Tax Reform?
Check out this very interesting chart that shows the impact of the House version of the tax reform bill from Bloomberg:
It appears that the House version of tax reform will screw over many Americans.
Unless you own a private jet…
Senate Tax Reform Bill and Private Jets
From The Hill:
The latest version of the Senate Republican tax reform bill includes a break for companies that manage private jets. A measure in the Tax Cuts and Jobs Act would lower taxes on some of the payments made by owners of private aircraft to management companies that help maintain, store and staff those planes for owners. The language would exempt owners or leasers of private aircraft from paying taxes on certain costs related to the upkeep and maintenance of the jets, according to a description from the Joint Committee on Taxation.
I guess the ultra rich will share a few laughs during their Thanksgiving celebrations because of stuff like this.
What Are the Biggest Problems for First Time Home Buyers Today
According to GenWorth’s recent survey of 200 mortgage industry professionals the biggest impediments for first-time home buyers in their opinion are having a sufficient down payment (46%) and a lack of affordable housing inventory (35%).
Despite these problems, over half of those surveyed think the first-time home buyer market will grow at a faster pace than the overall housing market in 2018.
Only time will tell if we will see more first time home buyers in 2018. Let’s hope we see more affordable homes for sale in the coming year…
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