December Letter From My Heart

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Good morning to December,

Looking past the headlines, we finish this year with our economy continuing to flourish. Good news: wages and jobs march upwards, as we look to the good cheer of the Christmas Season.

Call today. We look forward to helping you prepare for your financial future.

Why important? Because my concern is for our clients to have a safe and secure future.

Dr. Christopher Thornberg – an expert economist – speaking at a recent engagement, used a word quite apropos for our region – “Miserabilism”. It speaks to a pessimism, buried in sensationalized headlines, missing the point that our economy is the strongest and healthiest in 25 years. Difficult to know why a strong labor market, healthy business investments, rising wages, with exports up, are somehow described as news to be feared.

What are the numbers: Wage gains near 3.8 %. Consumer spending up 3 %. And savings rate is 7 %. Debt-to-income ratios are steady thanks to the long run of low interest rates..

Are there concerns? Always. For life is always complex. Yet if fears of others blinds us to the realities of our good economy, we risk missing one of the best 5 years we have had in decades. Part of seeing past fears, is often asking the right question: Number of workers vs. the number of jobs; Tax structure, not tax levels; Public investment not business investment; Wealth inequality, not income inequality; Housing supply, not the cost of housing.

Call us. Working together, we have the tools to help make sense of the noise.

Points of Interest:

1) Home Valuation: Homes nationwide – those with conforming loans – are up 6% year, and up 0.2% month-over-month. up .2 %. With typical year end slow down, we suspect to end the year in the 5’s. Not bad for the early stages of a jump-started economy.

2) Loan Limits: Just increased 6.2 %. Further documenting our strong Nationwide market.

3) Employment: Job Openings are up 11.9%, with hires are up just 3.3%, a number declining the past three months. We also see job openings exceeding the number of unemployed by 659,000. This surpassed zero for the first time, last March. Interestingly, “quit rates” hit 2.4% – highest since 2001 – and now a record 25% of small businesses are finding qualified workers to be problem #1. Labor’s in very short supply.

4) Income: Based on the Employment-Cost Index – quarterly wages and benefits paid to civilian workers – and a second survey looking at hourly earnings/month, wages are rising an annual 3.1%. This is the fastest since late 2008. The Good News: These increases remain non-inflationary, as “net” wage increase are offset by labor productivity growth of 1.3%. This “net” number is below the Fed’s target inflation rate of 2%. The labor market can get still tighter.

5) Congress: 1st time in 36 years, FAA is funded for the next 5 years. No more stop gaps !

Our Monthly: The Good, Bad n’ Ugly:

The Good:

People voting in the mid-term election. For the Country, it was the highest percentage of voters in the past 40 years !! Good for us. Keeping faith in our voting system makes us strong.

The Bad:

Yet for the great state of California, our ballot count indicates we had the lowest percentage of voters in 40 years. With all the ‘noise’, media, and conversations, let the shame be on those who did not vote – especially when this State makes it so convenient and easy to vote. Quite an embarrassment! Yet I suspect my wonderful readership have much to be proud with a very high voting turnout!

The Ugly:

In this season of giving thanks for the bounty we have been given and the blessings of the Christmas joy, I will keep my tongue still for another day. Are there challenges and issues? Many. Yet I believe we have the people, companies, and business to meet needs and find answers. But even more, let us be giving hands to 2nd Harvest or Sunnyvale Community Center, or the dozen such ways to those otherwise over looked. Such is a good way to overcome Ugly, through good works and sharing hands.

Let each of us be thankful and ‘play it forward’ for the many blessings we have.

In Closing

In spite of “talk” about our slowing marketplace, we are working through the Season. With increasing employment, better wages, and a growing economy, change is always happening and people remain in transition. We are here and ready to help, today. Call us and let’s talk.

As you look ahead, please consider us a trusted professional for your friends, colleagues and family members. We offer insightful data and solid planning when making important decision – whether buying, selling, or refinancing real estate. Call us. This commitment is more important than buying stocks or bonds. Allow us to be part of the conversation.

Thank you for your loyalty, business, and referrals. When you need help, give us a call. Our knowledge and expertise includes debt planning, fiscal planning, and tax deferral. These add to our strengths in providing you sound planning and preparation – key to a successful future.

Our team is ready to help you achieve your dream, now.

Call today!

Have a blessed day and a peaceful Christmas Season.

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