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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Zero Hedge

What Life Will Be Like After An Economic Collapse

Courtesy of ZeroHedge. View original post here.

Submitted by Megan Stewart via SurvivalSullivan.com,

If you have been waiting for a public announcement or news headline to let you know that an economic collapse has begun, you are in for the surprise of your life. If history in other countries and in Detroit, Michigan is any indication, there won’t be an announcement. An economic collapse tends to sneak up on a city, region, or country gradually over time. In some cases, the arrival of an economic collapse is so gradual that most people l...



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Chart School

A Wild Day: Profit Takers Take To The Streets

Courtesy of Declan.

 

Yellen's speech pushed markets both up and down, but probably left more minds stuck in indecision than offered a clear path forward. Markets don't like indecision, which gives bears and weak longs an opportunity to sell. There are still key support levels to break, but recent weeks of tight action could lead to an unraveling.

The S&P finished as registered distribution with new 'sell' triggers in On-Balance-Volume and Directional Indicator. The index has been stuck in a relative downward turn since July (against Small Caps). This index is offering the clearest 'sell' signal.
 

...

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Phil's Favorites

Wrapping Up Jackson Hole: What Did We Learn?

Courtesy of Mish.

Jackson hole did little more than make Fed Chair Janet Yellen look like a blithering fool.

Her chart of confidence levels on interest rates was just one of many silly things.

Here’s a roundup of tweets and posts that shows what I mean.

Proof Economists’ Style

Proof looks like this at #JacksonHole. No empirical evidence needed.

Proof looks like this at #JacksonHole. No empirical evidence needed linking policy to substantive economic outcomes pic.twitter.com/7uLOgc7RA9

— John P. Hussman (@hussmanjp) ...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Japan Pension Giant’s Losses Imply a $53 Billion Stock Splurge (Bloomberg)

The world’s biggest pension fund has room for a Japan stock shopping spree after the value of its investments tumbled last quarter.

U.K.’s May Orders Brexit Plans Ahead of G-20, Newspapers Report (Bloomberg)

U.K. Prime Minister Theresa May asked her cabinet ministers to come up with a blueprint for how their departments may be able to benefit from Britain’s exit from the European Union ahead of the Group of...



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ValueWalk

Meb Faber: The Trinity Portfolio

By Guest Post. Originally published at ValueWalk.

The Trinity Portfolio by Meb Faber

Guest: Episode 15 is just Meb.

Date: 8/10/16

Run-Time: 42:53

Topics: Meb tries something new in Episode 15. In “audio book” style, he walks listeners through his latest research piece: The Trinity Portfolio. “Trinity” reflects the three pillars of this investing approach: globally-diversified assets, weightings toward value and momentum investments, and active trend-following. On one hand, Trinity is broad and sturdy, rooted in respected, wealth-building investment principles. On the other hand, it’s strategic and int...



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Kimble Charting Solutions

Basic Materials attempting breakout says Joe Friday

Courtesy of Chris Kimble.

Basic Materials stocks can often times give a decent snap shot of how an economy is doing from a growth or lack of perspective. Below looks at Basic Materials ETF (IYM) over the past decade.

CLICK ON CHART TO ENLARGE

IYM remains inside of an upward sloping mult-year rising channel (1), since 2009. It hit the bottom of this channel earlier this year and has bounce off support. Currently IYM is testing f...



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Biotech

Epizyme - A Waiting Game

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

Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer.  One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."

Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.  

Genetic components are the DNA sequences that are 'inherited.'  Some of these genes are stronger than others in their expression (e.g., eye color).  Yet, some genes turn on or off due to external factors (environmental), and it is und...



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OpTrader

Swing trading portfolio - week of August 22nd, 2016

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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Digital Currencies

Man Who Introduced Millions to Bitcoin Says Blockchain Is a Bust

 

Man Who Introduced Millions to Bitcoin Says Blockchain Is a Bust 

By  at Bloomberg

Excerpt:

Stefan Thomas, who introduced millions of people to bitcoin, has had a change of heart.

Blockchain, the ledger software that makes the digital currency possible...



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Mapping The Market

Illusion of Choice

From Jean-Luc:

Looks like we are down to about 10 companies for our consumer goods:

http://www.visualcapitalist.com/illusion-of-choice-consumer-brands/

Just like banks, airlines and cable companies! 

The Illusion of Choice in Consumer Brands

Explore the full-size version of the above graphic in all its glory.

If today’s infographic looks familiar, that’s because it originates from a well-circulated report that Oxfam International puts together to show consolidation i...



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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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Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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