Archive for 2011

Sorry, But The Republican Arguments Against A “Millionaire’s Tax” Are Just Preposterous

Courtesy of Henry Blodget of The Business Insider

The Republicans have had 12 hours to digest the news that President Obama plans to propose a "Millionaire’s tax" on annual incomes over $1 million.

I’ll say anything to suck up to rich people.

Image: AP Photo/Carolyn Kaster

As expected, they’re freaking out.

And if they had a good argument as to why such a tax was a terrible idea, we’d be happy to say so. But so far anyway, they don’t.

Obviously, no one likes higher taxes. And it’s no surprise that the potential target of higher taxes will squawk in protest as soon as the idea is proposed. But if the country is to begin to find a way out of its massive debt-and-deficit problem, it’s important to separate the self-interested squawking from actual logic.

The Republic arguments against Obama’s millionaire’s tax boil down to the following:

  • Raising taxes on millionaires will kill their ambition and discourage them from working
  • Raising taxes on millionaires will punish successful people for being successful
  • Raising taxes is always a terrible idea--the problem is spending
  • Taxes are a form of theft: The government has no right to take our money away
  • Raising taxes in a weak economy will further weaken the economy

Of these reasons, only the last one is valid. Raising taxes in a weak economy might, in fact, further weaken the economy (or the private sector, anyway). This weakening effect will certainly be less than it would if one raised taxes on the middle class, but it still could weaken the economy. And that’s why it’s important to consider the tax carefully and phase it in over time.

Just admit it: He’s right on this one.

The rest of the Republican counter-arguments are just silly, self-serving, or obstructionist. Let’s take them one by one, ending with the one that seems most persuasive to reasonable people.

"Taxes are a form of theft."  This is just ridiculous. It’s like arguing that paper money is illegal. We live in a Democratic society, with well-defined laws and processes. In this society, people have agreed that the government has a right to collect…
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Obama To Propose $1.5 Trillion In Tax Increases Tomorrow





Market Snapshot: US Friday Afternoon Hope Dashed

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

FX markets opened first and gapped down 100pips in EURUSD only to retrace back to fill the gap and then drop all the way back down again – all within the first hour. European credit markets (early CDS runs) are trading very marginally wide of their European closing levels from Friday and that is where US equity futures have pulled back to – 11/12am ET Friday levels – extinguishing the late-day hopium-inspired melt-up. We noted Friday that the late-day jump higher in stocks was not supported by any other asset class and sure enough, ES has retraced it all.

 

ES is down 17pts from Friday’s close – testing the lows from Friday’s early trading.

 

The EUR is starting to crack lower once again as we post – back below 1.3675 – under Thursday’s lows as DXY pushes above Thursday’s highs.

Chart: Bloomberg

CONTEXT – adjusted for the fact that TSYs have yet to open – indicates ES should be more like 1185 currently (about 10pts lower) – driven by the shifts in carry pairs (mostly AUDJPY and EURJPY), gold’s relative strength (within a hair of $1830), and WTI’s continued slide (back under Friday’s lows around $87). Silver is holding up near Wednesday’s highs while Copper is below last week’s lows now (and notably back to August 9th lows for the DEC futures contract and down 8.5% from its September 1st highs!).

TSY futures are well bid with the Long bond up over a point, 10Y +16 ticks (around a 6bps compression in yields), and 5Y +5 ticks.

SovX is being quoted unchanged and SUBFIN 3-4bps wider (with SENFIN unch so far). The short-end of the XOver credit curve is underperforming +9bps at 670/677. Asia Pac sovereigns are around 3bps wider.

As we post, risk assets are starting to leg gently down.





US vs Germany: A Comparison In Political Regimes

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

While the trope of US “short-termism” has been significantly discussed in recent months, in an attempt to explain why the capital markets no longer align with the 7-11 year duration of the business cycle, but with the duration of the elected term of the US president or of various congressional and senatorial critters, and in many cases, with the lock up period at various prominent hedge funds (nowadays as short as 1 month), little has been said about the comparison between the “political imperatives” that define Europe’s economic growth dynamo: Germany. And as last week demonstrated, when it comes to the US attempting to impose its “imperatives” on Europe (read Germany) in the form of the one and only “solution” available to the US (namely print, print, print) any such venture ends in mockery, ridicule and general disparagement of TurboTax experts. So just what is it about Europe that makes the two regimes so incompatible? Well, for one thing the fact that unlike the US, Germany has already suffered through a period of hyperinflation, seen the disastrous impact of central planning in the form of a totalitarian regime and it subsequent dissolution with the fall of the Berlin Wall, and experienced an economic “miracle” or the period between 1948 and 1955, in which Germany denied central planning and unleashed a golden age predicated by free and fair capital markets, and the abolition of all rules and regulations established by the occupying powers. But that is not all: aside from the purely empirical perspective that Americans so acutely lack, Germany also has a vastly different political system which explains why the prerogatives behind the German ruling party are so vastly different than those for the US, and why Europe will almost certainly never embark upon a path comparable to that of the US. The Privateer‘s Bill Buckler does the perfect comparison of the “political imperatives” that shape, define and most importantly, distinguish the US from Germany, and which we believe should receive far greater attention in the mainstream media than they currently do.

From Bill Buckler’s Privateer:

The most telling comparison between the “management” of the debt crises in Europe AND the US is the comparison between the political systems of both nations. In the US, a


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The "Real" Mega-Bears: Weekend Update

Courtesy of Doug Short.

It’s time again for the weekend update of our “Real” Mega-Bears, an inflation-adjusted overlay of three secular bear markets. It aligns the current S&P 500 from the top of the Tech Bubble in March 2000, the Dow in of 1929, and the Nikkei 225 from its 1989 bubble high.

The chart below is consistent with my preference for real (inflation-adjusted) analysis of long-term market behavior. The nominal all-time high in the index occurred in October 2007, but when we adjust for inflation, the “real” all-time high for the S&P 500 occurred in March 2000.


 

 

Here is the nominal version to help clarify the impact of inflation and deflation, which varied significantly across these three markets.

 

 

See also my alternate version, which charts the comparison from the 2007 nominal all-time high in the S&P 500. This series also includes the Nasdaq from the 2000 Tech Bubble peak.

 

 

 

 





Here Is What Else To Expect From Obama Tomorrow Besides The “Buffett Plan”

Courtesy of ZeroHedge. View original post here.

Tomorrow at 10:30 am Obama will present the balance of the details from his latest tax hike proposal, which obviously has no chance in hell of passing, but which will provide for substantial theater and hopefully deflect from the fact that Europe is closing an hour later. Courtesy of Reuters, here are some of the tax measures Obama has either already proposed, or may be looking at, to raise more tax revenue to help reduce the deficit, according to analysts, and what he will likely focus on tomorrow.

RECOMMENDATIONS MADE

* The president wants a new tax on the rich, known as the "Buffett tax." Details were sketchy, but uber-investor Warren Buffett, chairman of Berkshire Hathaway, in mid-August made his own tax proposal. If Obama’s recommendation resembles the Buffett plan, then it would look like this:

--Hold income taxes steady for more than 99 percent of U.S. taxpayers. Raise rates, to an undetermined level, for individuals with income exceeding $1 million. Raise taxes for the super-rich making more than $10 million per year.

The "Buffett tax" could be a 5.4 percent surtax on joint returns above $1 million and individual returns above $500,000. If it is, it could bring in as new government revenue about $480 billion over 10 years, said analysts at MF Global.

* Under a $447-billion jobs plan unveiled on Sept. 8, Obama asked for a cap on itemized tax deductions and some exemptions at 28 percent for individuals earning more than $200,000 a year and families earning more than $250,000.

POSSIBLE FURTHER RECOMMENDATIONS

* The president may call for reining in the mortgage interest deduction. This could include denying it for second mortgages on vacation homes and yachts; lowering a $1 million cap on eligible first mortgages to perhaps $500,000; converting the deduction to a limited tax credit; or killing it, said analysts who stressed any changes would be phased in slowly.

* Another possibility is limiting the employer-provided healthcare income exclusion for higher-income tax brackets. It cost about $117.3 billion this year.

* In his jobs plan, Obama said he wants to close a loophole that lets private equity and hedge fund managers pay the 15-percent capital gains rate, instead of the 35-percent income rate, on much of their income known as "carried interest."

* On the corporate tax front, Obama may…
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Kabuki Theater Economy

Courtesy of ZeroHedge. View original post here.

Submitted by ilene.

Kabuki Theater Economy

(Taken from this week’s Stock World Weekly)

The stock market was driven by three major influences this week: the ongoing European “Black Debt” saga, the Dollar, and rumors galore. The rumor that lifted the markets out of their initial funk on Monday was that China would be buying Italian debt. 

Discussing the double-edge sword of Chinese investments, Chinese Briefing reported, “Debt-ridden European countries are longing for China’s purchase of their public debt despite fears that the country has motivations of a ‘reverse colonization’ of Europe. Nowadays the message ‘the Chinese are coming’ can often help governments trapped in financial crisis press public refinancing needs and shore up creditworthiness.

“As for China, it is reported that the country – whose US$3.2 trillion in foreign exchange reserves still have a heavy reliance on the U.S. dollar – is seeking more diversification and is increasing its holdings of the Euro.” (Concerns Grow over China’s Presence in Europe) The notion that white knight China was riding to the rescue of Italy fizzled out on Tuesday, when it turned out the rumor was based upon preliminary discussions that were unlikely to pan out. 

On Wednesday, U.S. Treasury Secretary Tim Geithner asserted, “There is no chance that the major countries of Europe will let their institutions be at risk in the eyes of the market.” (Yet the Greek government one-year bonds are yielding over 110%.) Geithner pointed out that German Chancellor Angela Merkel has publicly stated “We are not going to have a Lehman Brothers,” referring to Lehman’s notorious implosion that exacerbated the financial crisis of 2008. (Geithner: Europe will not be a ‘Lehman Brothers’)

After a three-way conference between Chancellor Merkel, French President Nicholas Sarkozy and Greek Prime Minister George Papandreou on Thursday, Mrs. Merkel’s spokesman proclaimed: “German Chancellor Angela Merkel and French President Nicolas Sarkozy are convinced that Greece’s future is within the euro zone.” (Merkel, Sarkozy: Greece Belongs in Currency Bloc) Also on Thursday, the Governing Council of the European Central Bank (ECB) announced its decision, “in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year. These operations will be
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EURUSD Opens 100 Pips Lower On Latest Round Of Greek Default Fears

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Same Sunday, Different Day. As the FX market opens, the accrued rumors from this weekend, once again focusing squarely on Greece have come to a fore. The immediate result: a EURUSD which is down 100 pips from the Friday close. Gold and ES opens in 2 hours, Asia in 4, the European bailout rumor mill shortly thereater, the central bank global liquidity pumpathon just after that, and so on. We have seen this all play out before and frankly it is getting boring.





DSK Says Greece Is Done

Courtesy of ZeroHedge. View original post here.

Funny how all it takes for people to tell the truth is to no longer be part of the status quo. Yesterday, former UK PM and gold trader extraordinaire Gordon Brown said the 2011 financial crisis is worse than that of 2008, and now we have the man who until 5 months ago was head (it just never gets old) of the IMF, saying that Greece is finished.

From Bloomberg:

  • STRAUSS-KAHN SAYS GREECE CAN’T PAY BACK ITS DEBTS
  • STRAUSS-KAHN SAYS EVERYONE MUST ACCEPT LOSSES ON GREECE

And in other news…

  • STRAUSS-KAHN SAYS HE WON’T RUN FOR PRESIDENT OF FRANCE

Which probably means he will run for Prime Minister of Italy. After all, most politicians only talk about putting their youth to work. Only Italian PM’s actually do it.





Twist and Shout?

Courtesy of John Mauldin, Thought From the Frontline

What in the wide, wild world of monetary policy is the Fed doing, giving essentially unlimited funds to European banks? What are they seeing that we do not? And is this a precursor to even more monetary easing at this next week’s extraordinary FOMC meeting, expanded to a two-day session by Bernanke? Can we say “Operation Twist?” Or maybe “Twist and Shout?” Not many charts this week, but some things to think about.

But first, I have had readers ask me about my endorsement of Lifeline Skin Care and whether I was still pleased. Quickly, let me say that I am more than pleased. I have not mentioned it recently, as the company had to deal with supply issues (partially, from too many orders, which is a good thing) but those have been handled. I read a lot of positive letters from people who use the cream with excellent results. I can clearly see a difference in my own skin. If you use it correctly you will get results

But a very interesting endorsement came by way of my cynical daughter Tiffani, who was in Europe recently for 6 weeks. She did not take her Lifeline with her but used another (very) high-end product. She came back and was complaining about how her skin looked. After switching back to Lifeline for two weeks, she notes that she can already see a difference, and the “feel” is improving. Many of the re-orders are coming from men (which is not surprising, as the bulk of initial orders came from my readers), almost the reverse of industry standards.

Basically, Lifeline uses patented stem-cell technology in its cream, and it promotes a visible rejuvenation of the skin in about 3-6 weeks (depending on the individual’s skin, how often you use it, etc.) I encourage readers who are (ahem) of a certain age, or simply want to keep their skin looking younger, to click on the link to see a new, very short video; and if you like, you can order at the website. I and a number of friends are enthusiastic users. If you are interested in your appearance, you might want to consider becoming a Lifeline user. And you can use the code…
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Phil's Favorites

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

We're about to get a clear example proving the stock market is not the economy (Business Insider)

When the results come in, US economic growth and earnings are on pace to show very different grades.

Gross domestic product is forecast to grow by 1%, according to Bloomberg's estimate for the advance reading expected Friday.

Euro-Area Economic Confidence Surges to Highest in a Decade (Bloomberg)

Euro-area economic confidence jumped to the highest in almost a decade this month, a testament to a continued improvement that may soo...



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Zero Hedge

Asylum Seekers Fleeing The U.S. For Canada May Find A Frigid Reception In Canadian Courts

Courtesy of ZeroHedge. View original post here.

Just over a month ago we highlighted the comments of one recently deported Mexican nationalist who told Reuters that illegally immigrating to the U.S. was over, courtesy of the Trump administration, and that it was "Canada's turn" to welcome the world's immigrants with open arms.

"For those without documents, I think (the United States) is over. Now it's Canada's turn."

And, with each passing month, new immigration stats from Canada seem to indicate that Reuters' young border-hopper was a very prescient fellow indeed.  According to ...



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ValueWalk

An Earnings Miss? So What?

By Investment Master Class. Originally published at ValueWalk.

By Investment Master Class

“Estimates miss earnings, not vice versa” Market Veteran

An opportunity to purchase a quality business at an attractive prices often presents when a company misses a quarterly number and analysts downgrade their numbers to reflect the lower new estimate.  This seems to have become more prevalent in recent times with investors and analysts having an increasing focus on short time periods, leading to an over-reaction in the share price. Fear, herding and other behavioural factors come into play. However, the key is to remain unemotional ...



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Chart School

Semiconductors Tick Along

Courtesy of Declan.

It was another quiet day for indices but the Semiconductor index was able to add over 1% on the day. This also helped post gains to the Nasdaq 100, although there was a relative gain for the Semiconductor Index against the latter index.


The Nasdaq 100 registered an accumulation day despite its underperformance against Small Caps. The index remains well placed to make a move to upper channel resistance.

...

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Digital Currencies

Bitcoin Spikes To Record Highs

Courtesy of ZeroHedge. View original post here.

US dollar prices for virtual currencies are soaring. Both Bitcoin ($1343 highs) and Ethereum (as we described previously) are at new record highs as China regulators/exchanges appear to have 'stabilized', fears over the so-called 'hard fork' have abated, and hopes for an ETF have been revived by an SEC review.

Back above the price of gold and at record highs, Bitcoin rallied notably overnight after China's largest bitcoin exchanges introduced a flat 0.2% fee on eac...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Euro-Area Economic Confidence Surges to Highest in a Decade (Bloomberg)

Euro-area economic confidence jumped to the highest in almost a decade this month, a testament to a continued improvement that may soon prompt a policy shift at the European Central Bank.

European Bank Bulls Seek ECB Tapering Hints as France Risk Fades (Bloomberg)

Investors are waiting to see whether Mario Draghi joins in the optimism that has engulfed the region&r...



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Kimble Charting Solutions

S&P 500; Dangerous place to run out of gas!

Courtesy of Chris Kimble.

Could the “Weekly Closing Highs and Lows” of last year, be impacting stock prices in 2017? The Power of the Pattern thinks so! Below looks at the S&P 500 over the past couple of years. where we applied Fibonacci to the “Weekly Closing Highs and Lows” of last year.

CLICK ON CHART TO ENLARGE

The S&P 500 ran into the 161% extension level at (2) and it stopped on a dime, at the end of February. Following a small decline the rally the past two weeks has it testi...



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OpTrader

Swing trading portfolio - week of April 24th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Members' Corner

Should I buy that stock?

Courtesy of Phil Stasukaitis (pstas)

I was asked by my local investment club to do a presentation on "how to buy a stock?" As I pondered the question, I began by noting all the elements that I monitor regularly and which come in to play as part of my decision process. As the group is comprised novices to experts, I tried to gear my discussion to cover both basics and more advanced concepts.

Four Part Discussion

  1. Macro Economic Indicators
  2. Market Indexes
  3. Fundamental Analysis
  4. Technical Analysis

1. Macro Economic Indicators

We'll start with reviewing some basic concepts and measurements that have direct effects on the stock market. 

A. Gross Domestic Product (GDP)

...

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Mapping The Market

Bombing - Right or Wrong?

Courtesy of Jean-Luc

I am telling you Angel – makes no sense… BTW:

Republicans Love Bombing, But Only When a Republican Does It

By Kevin Drum, Mother Jones

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

Democr...



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Biotech

CAR-T & CRISPR - the Future is Now

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

PSW Members....it has been a while since my last post, but since many have all been on the board following the chat, it is time for a scientific lesson in a few of the companies we are long.  In addition, another revolution is coming in the medical field, and it will be touched upon as well.

CAR-T - stands for Chimeric antigen receptors (CARs) and the T is for T-cell.  

From the picture above, T-cells are one cell type of our immune system that fight off infection as well as they are one player at keeping rogue cells from becoming cancerous. Unfortunately, cancer somehow evades the immune system and so it begins.

CAR-T came along in the late1980s via a brilliant scientist, Zelig Eshhar...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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