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'We are near that inflection point': Billionaire Ray Dalio warns that America is now 'borrowing money to pay debt service' — cautions that debt will accelerate just to maintain spending
America’s national debt is currently closing in on a staggering $33.74 trillion. And according to Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, that number may continue to rise — quite rapidly. “We are at a point in which we are borrowing money to pay debt service,” he said in a recent interview with CNBC. The hedge fund legend explained that if a country’s debt were to grow faster than its income, its debt service would be “encroaching” on its spending. And if the country wanted to maintain its current level of spending, it would need to “get more and more into debt.” “The way that works, it accelerates,” he said. He added that the problem is exacerbated by America’s internal political issues and social conflicts. Dalio is not the only one to point out the connection between U.S. politics and fiscal health. Moody's Investors Service recently changed its ratings outlook for the U.S. from "stable" to "negative.” It warned that “continued political polarization” in Congress may heighten the risk of lawmakers failing to achieve consensus on a fiscal plan to “slow the decline in debt affordability.”
Do McDonald's combo meals really cost $16?
Inflation has emerged as a trending topic on social media, capturing widespread attention as people post receipts of everyday items. For instance, TikTok user Topher Olive went viral after he posted a video expressing frustration over the cost of his meal at McDonald’s. “So I get there’s a labor shortage. I get there’s wage increases and a number of other things, but $16? $16 for a burger, a large fry and a drink? It’s just crazy!” he says in the clip, which has received over 670,000 views, 32,000 likes and nearly 6,000 comments. The video shows a receipt from a McDonald’s in Post Falls, Idaho, where Olive purchased a Smoky Double Quarter Pounder BLT, a large fries and a large Sprite for $16.10 after tax. The story even made its way to the White House Office of Digital Strategy, according to The Washington Post. “What are we supposed to do, tell the president or Chuck Schumer to send a tweet saying, ‘Hey, most Big Macs aren’t that expensive?’" an unnamed Democratic official told the Post. "It would look ridiculous.”
Buffett gets candid about death and his will
Berkshire Hathaway chairman and CEO Warren Buffett shared a candid message about his life and inevitable death in a Thanksgiving letter to shareholders. “At 93 [years old], I feel good but fully realize I am playing in extra innings,” he stated in the letter, published Nov. 21. It’s a message that resonates even more now after the death of his long-time friend and business partner Charlie Munger at age 99 just days later on Nov. 28. True to pledges he made in 2006, Buffett donated Berkshire Hathaway stock valued at more than $868 million to four charities ahead of the Thanksgiving holiday — including a substantial sum to The Susan Thompson Buffett Foundation, named after his late wife. Explaining his actions, Buffett said his three children — who range in age from 65 to 70 — share his opinion that “dynastic wealth, though both legal and common in much of the world including the United States, is not desirable.” His children are the executors of his will and the named trustees of the charitable trust that will receive 99%-plus of Buffett’s wealth after his death. The 93-year-old noted: “They were not fully prepared for this awesome responsibility in 2006, but they are now.” The investing juggernaut also pledged that, after his death, the disposition of his assets “will be an open book” — with “no ‘imaginative’ trusts or foreign entities to avoid public scrutiny, but rather a simple will available for inspection at the Douglas County Courthouse.” After a lifetime of building immense wealth — and giving much of it away — Buffett seems to be at ease and in alignment with his children about his end-of-life plans. Here are three ways to help your loved ones so they can grieve your loss in peace.
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Mortgage rate trends this week
Thirty-year fixed mortgage rates have dropped from an average of 7.29% last week to 7.22%. “Market sentiment has significantly shifted over the last month, leading to a continued decline in mortgage rates,” says Sam Khater, chief economist at housing giant Freddie Mac. “The current trajectory of rates is an encouraging development for potential homebuyers, with purchase application activity recently rising to the same level as mid-September when rates were similar to today’s levels. The modest uptick in demand over the last month signals that there will likely be more competition in a market that remains starved for inventory.”
Thirty-year fixed mortgage rates have dropped from an average of 7.29% last week to 7.22%. “Market sentiment has significantly shifted over the last month, leading to a continued decline in mortgage rates,” says Sam Khater, chief economist at housing giant Freddie Mac. “The current trajectory of rates is an encouraging development for potential homebuyers, with purchase application activity recently rising to the same level as mid-September when rates were similar to today’s levels. The modest uptick in demand over the last month signals that there will likely be more competition in a market that remains starved for inventory.”
Musk launches F-bombs against former X advertisers
Elon Musk, the billionaire owner of X (formerly Twitter), has delivered a stark message to advertisers boycotting the platform over his endorsement of an antisemitic post: “Go f— yourself!” In a tricky exchange with journalist Andrew Ross Sorkin at the 'New York Times' DealBook Summit,' on Nov. 30, Musk dropped several f-bombs against companies who have stopped advertising on the social media platform. ‘If somebody’s going to try and blackmail me with advertising, blackmail me with money — go f— yourself,” he said, specifically calling out Walt Disney (DIS) CEO Bob Iger, who earlier in the DealBook Summit had said associating with Musk and X was “not necessarily a positive” for Disney. “What this advertising boycott is going to do is it’s going to kill the company,” said Musk, with the warning: “The whole world will know that advertisers killed the company, and we will document it in great detail.”
Elon Musk, the billionaire owner of X (formerly Twitter), has delivered a stark message to advertisers boycotting the platform over his endorsement of an antisemitic post: “Go f— yourself!” In a tricky exchange with journalist Andrew Ross Sorkin at the 'New York Times' DealBook Summit,' on Nov. 30, Musk dropped several f-bombs against companies who have stopped advertising on the social media platform. ‘If somebody’s going to try and blackmail me with advertising, blackmail me with money — go f— yourself,” he said, specifically calling out Walt Disney (DIS) CEO Bob Iger, who earlier in the DealBook Summit had said associating with Musk and X was “not necessarily a positive” for Disney. “What this advertising boycott is going to do is it’s going to kill the company,” said Musk, with the warning: “The whole world will know that advertisers killed the company, and we will document it in great detail.”
Fannie Mae reportedly scraps title insurance pilot
Fannie Mae has quietly scrapped a plan that could have saved Americans thousands of dollars in housing costs, according to multiple reports. With the objective of making housing more affordable — especially for lower-income Americans — government-sponsored mortgage company Fannie Mae was reportedly considering a pilot program that would waive title insurance requirements for certain lenders. Lenders’ title insurance is one of the biggest fixed costs associated with closing on a mortgage. It protects mortgage lenders from any unexpected legal or financial issues that render the home title — the ownership rights for the property — invalid. Fannie Mae was going to cover the cost of insurance for select mortgage refinancings offered by seven or eight lenders. If successful, it planned to expand coverage to more lenders and other types of mortgages, as reported by the Wall Street Journal. A lenders’ insurance policy typically costs 0.5% of the loan amount. While this move could have saved homeowners a healthy sum of cash, the idea of such a program landed like a lead balloon with the title insurance industry and lawmakers as reports circulated of its development earlier in the year. During a House hearing in May, Rep. Andrew Garbarino (R-N.Y.), who has a background in real estate law, said it would “end up hurting consumers,” despite no official announcement of a pilot program. According to the Journal, after extensive backlash — mostly around Fannie Mae’s lack of experience with title insurance — the pilot program was scrapped in August at the request of the Federal Housing Finance Agency. But here’s why title insurance may just be worth the money (and what you can do to limit your costs).
Fannie Mae has quietly scrapped a plan that could have saved Americans thousands of dollars in housing costs, according to multiple reports. With the objective of making housing more affordable — especially for lower-income Americans — government-sponsored mortgage company Fannie Mae was reportedly considering a pilot program that would waive title insurance requirements for certain lenders. Lenders’ title insurance is one of the biggest fixed costs associated with closing on a mortgage. It protects mortgage lenders from any unexpected legal or financial issues that render the home title — the ownership rights for the property — invalid. Fannie Mae was going to cover the cost of insurance for select mortgage refinancings offered by seven or eight lenders. If successful, it planned to expand coverage to more lenders and other types of mortgages, as reported by the Wall Street Journal. A lenders’ insurance policy typically costs 0.5% of the loan amount. While this move could have saved homeowners a healthy sum of cash, the idea of such a program landed like a lead balloon with the title insurance industry and lawmakers as reports circulated of its development earlier in the year. During a House hearing in May, Rep. Andrew Garbarino (R-N.Y.), who has a background in real estate law, said it would “end up hurting consumers,” despite no official announcement of a pilot program. According to the Journal, after extensive backlash — mostly around Fannie Mae’s lack of experience with title insurance — the pilot program was scrapped in August at the request of the Federal Housing Finance Agency. But here’s why title insurance may just be worth the money (and what you can do to limit your costs).
Rich, young Americans are still ditching NY, CA
Young Americans earning six figures are still ditching New York and California for greener (more affordable) pastures in other states. Iconic hotspots California and New York saw the largest outflows of high-income young people in 2021, according to SmartAsset’s latest analysis of income and migration data from the Internal Revenue Service (IRS). The states with the highest amount of high-income earners moving to them have comparatively cheaper homes and lower taxes, highlighting how the cost of living is a top priority even for the richest Americans. If you’ve been considering a similar move, regardless of your tax bracket, here’s what you need to know about where these rich, young Americans are going and why.
Young Americans earning six figures are still ditching New York and California for greener (more affordable) pastures in other states. Iconic hotspots California and New York saw the largest outflows of high-income young people in 2021, according to SmartAsset’s latest analysis of income and migration data from the Internal Revenue Service (IRS). The states with the highest amount of high-income earners moving to them have comparatively cheaper homes and lower taxes, highlighting how the cost of living is a top priority even for the richest Americans. If you’ve been considering a similar move, regardless of your tax bracket, here’s what you need to know about where these rich, young Americans are going and why.
US investors bet on Argentine stocks post-election
Argentina’s newly elected President Javier Milei has vowed to ditch the nation’s currency in favor of the U.S. dollar because the peso “isn’t even worth excrement.” The anarcho-capitalist and self-proclaimed “king of the jungle” won 56% of the vote with his radical plans to eradicate rampant inflation, which include a “moral obligation” to stop the nation’s central bank from printing money. However, resuscitating South America’s second-largest economy will be tricky. Inflation is currently roaring at 143%, the peso has lost 90% of its value in four years, the nation has almost no access to international capital and two out of five Argentines are living in poverty. “Today we begin the reconstruction of Argentina,” Milei said after his win on Sunday. “If we do not move quickly with the structural changes that Argentina needs, we are heading towards the worst crisis in our history.” The economist, author and former TV pundit famously revved a chainsaw during his electoral campaign as a symbol of his commitment to cutting government spending. Milei’s win sees the country move one step closer to dollarization — an idea the government has dabbled with and failed at in the past. In the short-term, it seems the new president’s promises to bring about dramatic changes have ignited the interest of investors. His win sparked a major rally in the U.S.-listed shares of Argentine companies and an exchange-traded fund (ETF) focused on the country’s economy.
Argentina’s newly elected President Javier Milei has vowed to ditch the nation’s currency in favor of the U.S. dollar because the peso “isn’t even worth excrement.” The anarcho-capitalist and self-proclaimed “king of the jungle” won 56% of the vote with his radical plans to eradicate rampant inflation, which include a “moral obligation” to stop the nation’s central bank from printing money. However, resuscitating South America’s second-largest economy will be tricky. Inflation is currently roaring at 143%, the peso has lost 90% of its value in four years, the nation has almost no access to international capital and two out of five Argentines are living in poverty. “Today we begin the reconstruction of Argentina,” Milei said after his win on Sunday. “If we do not move quickly with the structural changes that Argentina needs, we are heading towards the worst crisis in our history.” The economist, author and former TV pundit famously revved a chainsaw during his electoral campaign as a symbol of his commitment to cutting government spending. Milei’s win sees the country move one step closer to dollarization — an idea the government has dabbled with and failed at in the past. In the short-term, it seems the new president’s promises to bring about dramatic changes have ignited the interest of investors. His win sparked a major rally in the U.S.-listed shares of Argentine companies and an exchange-traded fund (ETF) focused on the country’s economy.
The IRS has postponed its '$600 rule' yet again
If you make a bit of extra money by selling goods or services online, you can breathe a little easier for the moment, now that the IRS has postponed a plan that would have set off a “tsunami of 1099-K” tax forms. For the second year in a row, Uncle Sam delayed a new tax rule that will lower the income threshold for Form 1099-K, which is used to report third-party business payments to the IRS. This means many small business owners, freelancers and gig workers are off the hook for now — but not everyone will be spared in the coming tax year. Here’s what the IRS is proposing and how casual sellers could still get dinged.
If you make a bit of extra money by selling goods or services online, you can breathe a little easier for the moment, now that the IRS has postponed a plan that would have set off a “tsunami of 1099-K” tax forms. For the second year in a row, Uncle Sam delayed a new tax rule that will lower the income threshold for Form 1099-K, which is used to report third-party business payments to the IRS. This means many small business owners, freelancers and gig workers are off the hook for now — but not everyone will be spared in the coming tax year. Here’s what the IRS is proposing and how casual sellers could still get dinged.
Musk says you shouldn't charge an EV to 100%
Of all the reasons why some Americans remain hesitant to adopt electric vehicles, one of the biggest is charging time. Unlike filling a gas tank, which takes a few minutes, charging an EV can take as long as an hour, even on the fastest available charging equipment, according to the Department of Transportation). But Tesla CEO Elon Musk says there’s a trick to speeding up the process: don’t charge your EV to 100%.
Of all the reasons why some Americans remain hesitant to adopt electric vehicles, one of the biggest is charging time. Unlike filling a gas tank, which takes a few minutes, charging an EV can take as long as an hour, even on the fastest available charging equipment, according to the Department of Transportation). But Tesla CEO Elon Musk says there’s a trick to speeding up the process: don’t charge your EV to 100%.
Many US millionaires now feel middle class
It turns out even millionaires aren’t rolling carefreely in the dough, considering how much of their income is getting diverted to everyday expenses and savings for the future. About 60% of investors with $1 million or more of investable assets categorize themselves as upper middle class, according to a recent Ameriprise Financial survey. And almost a third (31%) of this group consider themselves decidedly middle class. Don’t miss Commercial real estate has outperformed the S&P 500 over 25 years. Here's how to diversify your portfolio without the headache of being a landlord Rising prices are throwing off Americans' retirement plans — here's how to get your savings back on track 'A natural way to diversify': Janet Yellen now says Americans should expect a decline in the USD as the world's reserve currency — 3 ways you can prepare “There is no standard definition of what it means to be wealthy, but in general, investors associate it with having the means to live life on their terms,” said Marcy Keckler, senior vice president of financial advice strategy at Ameriprise, in a release. With costs racking up, many Americans are wondering whether a seven-figure income is enough to weather the current economic climate in comfort. Here’s how the country’s worried wealthy are adapting to that increased financial strain.
It turns out even millionaires aren’t rolling carefreely in the dough, considering how much of their income is getting diverted to everyday expenses and savings for the future. About 60% of investors with $1 million or more of investable assets categorize themselves as upper middle class, according to a recent Ameriprise Financial survey. And almost a third (31%) of this group consider themselves decidedly middle class. Don’t miss Commercial real estate has outperformed the S&P 500 over 25 years. Here's how to diversify your portfolio without the headache of being a landlord Rising prices are throwing off Americans' retirement plans — here's how to get your savings back on track 'A natural way to diversify': Janet Yellen now says Americans should expect a decline in the USD as the world's reserve currency — 3 ways you can prepare “There is no standard definition of what it means to be wealthy, but in general, investors associate it with having the means to live life on their terms,” said Marcy Keckler, senior vice president of financial advice strategy at Ameriprise, in a release. With costs racking up, many Americans are wondering whether a seven-figure income is enough to weather the current economic climate in comfort. Here’s how the country’s worried wealthy are adapting to that increased financial strain.
US beef industry struggles as cow numbers fall
If you're a fan of steaks and burgers, it might be time to adjust your budget (or your diet). The American beef industry is facing a pivotal moment, which is impacting the cost of your favorite meaty meals. Reuters recently reported that as the U.S. cattle herd shrinks to its lowest level in decades, the country is importing record amounts of beef while exporting less. This significant decline in cattle, driven by years of severe drought damaging grazing lands, has resulted in higher beef prices domestically. Consumers can already feel the impact. The latest Consumer Price Index report showed that the price of beef and veal in the U.S. was up 8.9% in October from a year ago.
If you're a fan of steaks and burgers, it might be time to adjust your budget (or your diet). The American beef industry is facing a pivotal moment, which is impacting the cost of your favorite meaty meals. Reuters recently reported that as the U.S. cattle herd shrinks to its lowest level in decades, the country is importing record amounts of beef while exporting less. This significant decline in cattle, driven by years of severe drought damaging grazing lands, has resulted in higher beef prices domestically. Consumers can already feel the impact. The latest Consumer Price Index report showed that the price of beef and veal in the U.S. was up 8.9% in October from a year ago.
Cardone: the 2 worst real estate markets right now
Prolific real estate investor Grant Cardone singled out two U.S. property markets he wouldn’t touch with a 10-foot pole: Austin and Seattle. Cardone shared this hot take — and many others — in a July 2023 interview with Moneywise after he prompted an AI chatbot to answer the question: “What are the 10 best markets for investing in rental real estate in America?” The AI Smith response started with: “The best markets for investing in real estate in America can vary depending on factors such as population growth, job opportunities, rental demand, affordability and potential rental income.” Up until that point, Cardone — who performed the task live on camera — was pretty happy with the response. But when the AI listed Austin, Texas, as the best market for investing in real estate, the investment guru blew up. “Austin, Texas is one of the worst markets to be in right now,” he exclaimed. “Of all the markets in America, it’s probably the most overbuilt.” Here’s why an overbuilt property market is bad for real estate investors — and how you can still invest without taking on all the risk yourself.
Prolific real estate investor Grant Cardone singled out two U.S. property markets he wouldn’t touch with a 10-foot pole: Austin and Seattle. Cardone shared this hot take — and many others — in a July 2023 interview with Moneywise after he prompted an AI chatbot to answer the question: “What are the 10 best markets for investing in rental real estate in America?” The AI Smith response started with: “The best markets for investing in real estate in America can vary depending on factors such as population growth, job opportunities, rental demand, affordability and potential rental income.” Up until that point, Cardone — who performed the task live on camera — was pretty happy with the response. But when the AI listed Austin, Texas, as the best market for investing in real estate, the investment guru blew up. “Austin, Texas is one of the worst markets to be in right now,” he exclaimed. “Of all the markets in America, it’s probably the most overbuilt.” Here’s why an overbuilt property market is bad for real estate investors — and how you can still invest without taking on all the risk yourself.