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It's the dichotomy of the real economy and the capital markets. More regulation means companies need to hire a bunch of people to comply with new regulations while paying more in taxes. More employed people filling out forms helps the economy. During Republican years, there's less new regulation and lower taxes, freeing up money to be paid back to shareholders.
I have to disagree with this view. Paying people to do "make work", like Cool Hand Luke and boss's hole full of dirt, does not create a strong economy. Sure, it might prop things up for a little while (there's really little difference between this, and passing out stimulus checks) but it won't drive an economy for eight years (two presidential terms).
I don't want to get into the current POTUS drama here, but in general I will give the new president two years to fix anything inherited from a predecessor. Come time for re-election there is no more blaming "the last guy" for the country's problems. And especially when POTUS has both houses of Congress for any amount of time, there's really no excuse.
I have to disagree with this view. Paying people to do "make work", like Cool Hand Luke and boss's hole full of dirt, does not create a strong economy. Sure, it might prop things up for a little while (there's really little difference between this, and passing out stimulus checks) but it won't drive an economy for eight years (two presidential terms).
I don't want to get into the current POTUS drama here, but in general I will give the new president two years to fix anything inherited from a predecessor. Come time for re-election there is no more blaming "the last guy" for the country's problems. And especially when POTUS has both houses of Congress for any amount of time, there's really no excuse.
I'll give that I might be jaded, but I'll give an example. Last year had a project for compliance with ASC 842 which is the new rules on leases. It was a publicly traded company so they had to do it. At 50,000 feet, say you have a 10 year lease on a building, but the rents are going to go up 3% a year, the company was to receive LHI of $250,000 and there was a 6 month holiday at the beginning of the lease.
Under the old rule, you'd take your total payments over the total period and take the average expense each period.
Dr. Average Expense
Cr. Deferred Rent
On your actual payment, you'd then switch it out:
Dr. Deferred Rent
Cr. Cash
The difference on your balance sheet would be the deferred rent. ASC 842 may have just been implemented, but it was passed earlier. Now, for operating leases, we show total payments as a liability on day one, discounted for the borrowing rate...that liability goes on the books. As each month progresses, the liability will increase by the interest rate and decrease by the actual money expended. On the other side you take the liability, subtract any LHI which will depreciate separately and then capitalize each piece of interest expense each month while subtracting the overall average expense.
The ending difference between the asset and liability should be exactly the same as a deferred lease under the old rules. But now you have giant balance sheet amounts to discuss.
At the end of the day, it's a company leasing buildings, but the new rule gives a bit of work to financial reporting and a bit of work to consultants like myself and makes the AP clerk's timeliness a bit more important. It gives the auditors something new to poke at. It makes for another reconciliation point for everyone's statutory vs US GAAP books.
If your deferral was correct before, you should arrive at EXACTLY the same answer...it's just turning a puppet inside out and spreading it all over the balance sheet. Can't wait for a bank to start making loans on goodwill and Right of Use assets.
Sure, I get your point. I agree that we have an over abundance of rules and regulations, obviously more than can be enforced. And yet the country manages to grow and prosper pretty well.
Neither of the mainstream parties really suits my fancy, so I’ve accepted that I’ll always be unhappy with the political situation in this country.
My objection here is to the simple-minded notion that when it comes to the economy, R=good and D=bad. There’s really no empirical evidence to support that view.
The economy has little to nothing to do with the president, save the appointment powet of the Fed xhairman.
Jerome Powell was a partner in the Carlyle Group, and he has repaid the largest investors of that type many, man, many times over. As long as be is Fed chairman, the stock markets will never go down, ever.
It has somewhat to do with the sum total of governance. That includes states and localities as well as the Fed.
Otherwise, the market and economy respond to "environmental" factors. I mean that in the sense of overall economic climate.
Last edited by redguard57; 08-18-2020 at 03:32 PM..
What stocks (if any) do you think will soar or crash with a Biden / Democratic win?
Quote:
Originally Posted by bmw335xi
I think stocks like TSLA (clean energy), SWBI (rush to buy guns), CGC (marijuana legalization) will be some that will soar with a Biden/Democratic win. I imagine we will at the very least see an extension of tax credits for clean energy, people will rush even more than they are now to buy guns and recreational marijuana could be legalized on the federal level.
Feel free to answer the same question if Trump wins as well...
I am no financial expert but if Biden wins, we can expect increased taxes, more regulations and the return to predatory free trade. I expect American small caps and mid-caps to fall. I am not sure about large caps, it may depend on how new economy they are and how multi-national they are. Some new economy corporations may prosper but I am not really optimistic overall about the large caps under Biden.
Anyway I think right now mutual fund companies and other big investors are betting that Trump is going to win reelection. That is why the market has been rising all summer.
Decided to build positions in medical suppliers and rebuild
fuel cells. Currently 40-50% cash. I may run cash down ~40%.
May I ask which medical suppliers are your favorites? I like SYK, MDT and MCK myself, but outside of that, I don't know a whole lot about the space. Thanks in advance!
JMO, many cos are being held back bc of DJT incoherent policies.
I would actually agree here, not that I didn't like the original plan of pursuing bilateral agreements and pushing exports....the plan was decent, but even if he's re-elected it would be a like a long dead duck. The Republicans are certainly speculating how to reform themselves.
In hindsight, I almost wish there'd have been the stomach to actually investigate the impeachment in the Senate. A Pence Presidency might have been able to act differently.
JMO, many cos are being held back bc of DJT incoherent policies.
All of the tariff nonsense has been counter productive. I work for a public company, and this has been mentioned as a negative in most of the quarterly announcements for the past couple of years.
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What stocks (if any) do you think will soar or crash with a Biden / Democratic win?
