October Letter From My Heart

Good morning to Fall,

Home and commercial markets continue on all cylinders, with new home construction running at pace with our growing population. This is good news, albeit a few locations where the greater need is yet to be achieved. The good fruits of steady job growth and a growing economy.

At the same time, stocks and interest rates seems sensitive to uncertainties of DC politics and tweets about tariffs. But fortunately, though a tweet or a disgraced department head may become a headline, it will not topple our economy. Instead we will focus on issues of undisciplined spending habits and market forces effecting interest rates. This is significant.

It is good to remind ourselves that long before President Trump, our spending habits began to spin out of control, with little concern of consequence. Some talk of the ‘Great Reset, yet very few give careful consideration to the unintended consequences – broken trust between you and the lender. This would cause a rapid reaction to interest rates, and stop the free flow money. Thus, when you vote this November, be sure to see far more than headlines and overblown emotional fears. For your vote alone could trigger the next recession and it won’t be pretty.

Why is this important? Because I am concerned about your future – its safety and security.

Call us as we help you hold to a steady discipline of planning,

and please do not let fear dominate your thoughts. We can help

Points of Interest:

1) Household Debt and a Growing Economy: Total household debt peaked during 2008, at $12.68 trillion or 85.5% of GDP. Household debt was $9.99 trillion and $2.69 trillion non-housing. It bottomed in mid 2013 at $11.15 trillion, or 67% of GDP. Household debt was $8.38T, with $2.77T non-housing debt. Since then, household debt has risen to a record $13.29 trillion, but now only 65.1% of GDP. $9.43 is housing debt and $3.86 non-housing.

2) Employment: During the Great Recession, total US employment was 129.7 million. Today, the number of employed Americans has steadily risen to 149.1 million. Better yet, 51% of workers said they are satisfied with their jobs, the highest percentage since 2005. The most happy was in 1987, at 61.1%, years before cell phones, the Internet, and email.

3) Job availability, Year to Year: Job openings are up 11.9% and hires are up just 3.3%. As for net job growth, it has been continuous for 95 straight months – the longest streak since 1939, when record keeping began. Wow! In addition, job openings exceed the number of unemployed by 659,000 – the first time they surpassed zero was in March. Interestingly, the quit rates hit 2.4%, highest rate since 2001 at the same time a record 25% of small businesses say finding qualified workers is problem #1. Labor is in short supply, providing more options.

Our Monthly: The Good, Bad n’ Ugly:

The Good:

Despite interest rates about 1 % higher than a year ago, “home sales” continue to track very well with seasonal norms. As for new construction, it continues adding to the overall supply at a slow, steady rate. As for lending and with help from D.C., it is about as loose as we have seen for many years.

The Bad:

The belief we can solve all problems by imposing high fees on big tech. Did we forget the companies who have provided mass transit for many employees, where our public service fell short? They are important to us, as they continue to fund many non-profits working with the homeless and many underserved people. They continue to push to create new housing.

The Ugly:

Santa Clara County estimates spending near $ 70,000 – annually – for every homeless person. Perhaps a wake up call to provide a means, for those able, to be retrained and reintegrated into work. Yet more is required. We also have to provide the land or find the space to do so.

In Closing

It the season where we are called upon to vote; to consider what is good for each of us, what is in the best interest of our nation, and how each of us can help out locally and regionally. We freely give back of our resources and hope you might do the same. There is no single path.

We thank you for your continued loyalty, business, and referral. When you need help, give us a call. Our knowledge and expertise is debt planning, fiscal planning, and tax deferral. These are our strengths. Sound planning and preparation as key to success, safety, and security.

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

Call today!

Have a blessed day as we remain gratefully yours.

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