@sunshine100 Heist! It's really difficult when you don't have experience with loans like this. I just look like a Clueless fool when it comes to such things.
@daniellea I don't know how you guys argue so much. It sounds very tiring. And it doesn't seem like either side is really changing their mind on anything.
Personally it sounds like high interest rates = slower growth. Sounds like common sense for any company that operates with debt. But I haven't really been doing this for that long.
@tramvn No, what he says is that the last 35 years of the stock market was pumped up by effects (tax and rate cuts, not just low taxes and rates) that can't be pushed any further. The dial is set to 11. The accelerator is floored. No more big growth even if we don't take the foot off the gas.
And he's not even talking about turning the dial back down.
@daniellea Can't interest rates be cut again in the future? They are around 5% right now, a gradual return to 0-1% seems very possible in the next 5-10 years as the inflation slows down.
As for tax cuts, I wouldn't be surprised if the constant corporate lobbying in D.C. leads to the tax rate being lowered even more in the future.
I see what the author is saying that the "exceptional" returns of the past are probably over, but 4% long term seems a bit pessimistic.
There's not much more to go, and, just like the last tax cuts, it's a windfall, not a source of growth. Growth would be cutting corporate tax by 1% a year, passing through zero, and subsidizing companies with increasingly negative taxes at 1% more every year.
@daniellea I was being facetious and making fun of the headline (which is about profits, not stocks). But the analysis of course is correct - when interest rates are low, people go searching for yield to avoid the real value lost from inflation, so asset prices will increase, including homes, art, stocks, etc.
