“Discussion Post” Critical Thinkings Examples

The housing recovery started after the end of the financial crisis that started in late 2007. It was fuelled by the lower interest rates, higher investor’s confidence, and a lot of demand. All of this resulted in rise in house prices which were pretty stagnant before the boom in the market. However, it is likely to be short lived and future house prices are again expected to remain stagnant or rise very slowly. The reason why housing recovery is over is because the market has come to an equilibrium level where house to rent ratio, house wealth to GDP, and paying in cash for a house rather than relying on the mortgage or interest bearing loans have come to the historical average. Hence, it is evident from all these ratios that there is going to be no more increase in the house prices in the market, and they are going to remain stagnant for the coming years and even decades. (Frohlich, 2015)
Taxes are rising in the USA. This has made companies to locate their headquarters elsewhere or register them in other countries. This way the companies are reducing their taxable income, and at the same time they are making sure that their income is not being sacrificed. It is therefore best for the investors to buy stock and contracts in the countries where tax reforms allow them to pay less in taxes, and at the same time continue to earn very high rates of return on their investments. Many companies are buying a diversified portfolios, and they are trying to invest in more than one countries so that their taxes, returns and risks is diluted and they do not lose too much, and at the same time keeping their tax rates very low. (CNBC, 2013)

References

CNBC,. (2013). Fast rising mortgage rates are dire for housing. Retrieved 22 February 2015, from http://www.cnbc.com/id/100876300
Frohlich, T. (2015). States with the worst taxes on average earners. USA TODAY. Retrieved 22 February 2015, from http://www.usatoday.com/story/money/personalfinance/2015/02/15/247-wall-st-worst-taxes-average-earners/23361553/