DJIA Predictions

[allagash]

What you do in inflationary times is you buy gold and silver coins and then you barter them for your purchases. That way there is no capital gains tax because the transaction is off the grid.

?

http://www.bankrate.com/brm/itax/tips/20010201a.asp?caret=1d

Excerpt:

Bartering your services won't help, either. The value of noncash items must be determined and then counted as income.

-Mike

[Dave T]

15% Holy smokes are you kidding me. If I was a US resident and sold a security (stock) for a gain only 15% of it would be taxed???

Here in Canada it's 50% capital gains tax on that same stock

I think I am going to be sick...

No, you misinterpreted what I said.  In the US, 100% of gain is taxed.  The long term capital gains tax rate is just 15%.  Sell a stock you have held longer than a year for a $10000 profit.  Your capital gains income tax on that profit will be $1500.   $10000 x 15% = $1500.

I suppose you get the same tax liability in Canada, if your income tax rate is 30% while only half of your sale profit is taxable.   $10000 x 50% x 30% = $1500.

You have to tell us, which is the lessor tax on capital gains -- US or Canada.

My earlier response which detailed US taxes is probably not applicable to you if you are in Canada.

[jdproperties]

Canada

Currently 50% of capital gains are taxed in Canada at the general rate. (ie $100 CG with 30% tax rate will attract $15 of tax.) Some exceptions apply, such as selling one's primary residence which may be exempt from taxation.

Question:

In the US, is it true that you can write off your mortgage payments not just the interest from your income?

[Dave T]

US tax code allows an investor to expense mortgage interest against rental income.  If this is what you meant by "write off", then the answer is yes.

Interest earned on savings or investments is taxable income in the US.  If you don't save or invest your income, then it can't earn interest.  I don't know what you mean by "interest on income".  You will have give an example.

[jdproperties]

What about your principle residence mortgage and interest payments...Can you expense any of those payments against your income from a regular (job)

[jdproperties]

Gold and silver questions...

Agree or disagree that there is less than 10 year supply of silver in the world?

India and China will need how much silver for cell phones, computers etc.. I have been researching like mad silver and gold (in case of hyperinflation) but I really wonder about the demand of these emerging markets. Any comments with regards to what goes into making cell phones, computers etc..

Does anyone know if you can buy a pure play on gold that pays a dividend? 

Funny thing is I told my 18 old daughter to get her ass and buy gold bars
last year and she did and I didn't..I'm a dumb ass "not LMAO"

Would you buy gold/silver stocks, etf's, bullion or certificate and from whom?

I was checking out the Perth Mint... It seems they are the safe place if you want to buy gold/silver certificates. What say all of you...

[Dave T]

What about your principle residence mortgage and interest payments...Can you expense any of those payments against your income from a regular (job)

Mortgage payment for a typical homeownere is debt service (PI) plus taxes (T) and hazard insurance (I).  The amount sent in for taxes and insurance is held in an escrow account until such time as the bills are due.  When the tax bill or the insurance bill is due, the actual amount due is withdrawn from the escrow account to pay the bills.

Debt service has two components, principal (P) and interest (I).  The amount applied to the principal component is repayment of debt and not ever deductible. 

If you break down the mortgage payment into PITI

• Principal (P) is never deductible.  Repayment of principal is repayment of debt and not ever deductible.
• Mortgage interest (I) is deductible for a primary residence but only if the taxpayer itemizes his deductions.  Mortgage interest for an investment rental property is expensed against rental income.  Mortgage interest for an investment property that is not held for the production of income might be deductible as investment interest provided the taxpayer itemizes AND the deduction can not exceed investment income.
• Property taxes (T) for a primary residence or investment property are deductible but only if the taxpayer itemizes deductions.  For an investment rental property, T is expensed against rental income.
• Hazard Insurance (I) is not deductible for a primary residence, but is expensed against rental income for a rental property.

[allagash]

.25

-Mike

[NDLM]

.50

http://www.reiclub.com/forums/index.php/topic,34049.0.html

"The fact that stocks didn't continue their plunge later today was a positive sign, however economists and analysts said a full recovery wasn't likely in the near term, further rate cut is imminent (possibly another 50 basis point on Jan 30) in hoping for softer recession.

But then again, the *REAL* question is how many more rate cuts they can continue? Once they run out of the rate-cut ammunition, then what next?"

[jdproperties]

More cuts, (reality of the situation will kick in at some point , it just has too )  fear will set in...stock market will crash or the fear of a crash, then the fear of inflation and or a slowdown, that will cause a  dash to gold & silver, that may result in hyperinflation, at that point the Feds and other banks around the world will be printing money as fast as they can print in cyberland in the attempt to calm fears along with  raising interest rates to try to get inflation under control, all the while the holders of gold and silver are selling their positions.

[allagash]

But then again, the *REAL* question is how many more rate cuts they can continue? Once they run out of the rate-cut ammunition, then what next?"

Nothing to add on that....

But here's a good link that shows historical data:

http://www.moneycafe.com/library/fedfunds.htm

-Mike

[allagash]

My best guess:

DOW up 50 on Monday...with Giants win.

-Mike

[allagash]

I think 11,250 is being optimistic.

More like 10,750.  That's probably too rosey too...but I see a big blood bath around April.

-Mike

Just revising my guesstimate here.......

9500 sometime between now and end of year.

-Mike

[Bluemoon06]

2 years ago July 11, 2006 the DJIA was 11,200.  Today the DJIA is 11,200.  2 whole years and it is still moving sideways?  I still say that nobody gets rich in stocks except stockbrokers.  They keep adjusting the companies in the average and they still can't make it make money.  WTF!!

[allagash]

Bluemoon,

Let’s look at a 2 day timeline instead of 2 years:

At 4pm on Thursday Fannie Mae, (FNM), closed at $13.20.

By 9:30am on Friday it was down to $7.16, (a drop of 46% in after/pre market hours).

Anyone who knows anything about the US mortgage system knows that Fannie Mae is akin to the human skeletal system.

The big concern for stock traders was conservatorship.

As with IndyMac, here’s what a company’s website looks like when that happens:

http://www.indymac.com/

[For future readers of this post, you'll probably be seeing a much rosier website than what is currently being displayed today, (7/12/08)]

Point is, at the conservatorship level, a company’s stock is pretty much worthless.

At 10:30am on Friday Treasury Secretary Henry Paulson announced their focus was to support the pair, (Fannie and Freddie), "in their current form" without a takeover.

For a trader, that statement was beautiful.

A $10,000 investment at about 10:30am netted 4 grand by the end of the day, ($10.25/$7.25):

http://bigcharts.marketwatch.com/charts/big.chart?symb=fnm&compidx=aaaaa%3A0&ma=0&maval=9&uf=0&lf=1&lf2=0&lf3=0&type=4&size=3&state=8&sid=1899&style=320&time=1&freq=6&comp=NO%5FSYMBOL%5FCHOSEN&nosettings=1&rand=7369&mocktick=1

In REI terms, that’s 26 SFH monthy cash flows @ $150.00 each, (excluding taxes and fees), in 5.5 hours.

Next week is a different story.

-Mike