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

What's unconscious bias training, and does it work?

 

What's unconscious bias training, and does it work?

Courtesy of Calvin K. Lai, Washington University in St Louis

A Starbucks manager in Philadelphia called the police on two black men on April 13, leading to their arrest. The two men, who had been waiting for a friend at the store, were released without being charged.

Starbucks has since apologized and announced it will close more than 8,000 of its stores in the United States to provide “racial bias” training for its 175,000 ...



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Zero Hedge

Apple Slides After Taiwan Semi Blames "Very High-End Smartphone" For Unexpectedly Poor Guidance

Courtesy of Zero Hedge

In the latest confirmation that earnings from Apple are set to disappoint, perhaps bigly, overnight, the world's largest semiconductor producer, Taiwan Semiconductor, reported disappointing guidance, with management blaming a "very high-end smartphone" prompting renewed questions about the collapse in global iPhone demand.

The market wasted no time to price in the ongoing decline in demand for $1000+ iPhones and Taiwan Semi ADRs fell more than 5% in pre-market trading while Apple, Nvidia and AMD are all down ~2% in sympathy; this followed weakness in European chip stocks like AMS -3.7%, STMicro -2.2%, and Dialog Semi -1.9%.

...



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Insider Scoop

30 Stocks Moving In Thursday's Mid-Day Session

Courtesy of Benzinga.

Gainers
  • AGM Group Holdings Inc. (NASDAQ: AGMH) shares jumped 27 percent to $7.9992 after rising 26 percent on Wednesday.
  • OpGen, Inc. (NASDAQ: OPGN) shares climbed 23.4 percent to $2.58. OpGen completed rapid testing clinical trial in Colombia and expanded international operations.
  • PLx Pharma Inc. (NASDAQ: PLXP) gained 15.6 percent to $4.449.
  • Monaker Group, Inc. (NASDAQ: ...


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Chart School

Short Opportunity Negated

Courtesy of Declan

Well, that didn't last long.

The shorting opportunities which offered themselves yesterday didn't last the morning; morning gaps held beyond the first half-hour of trading and bar a small sell-off into the close markets finished higher and above key moving averages and trading channels.

The Dow created a breakout which now offers a potential long play. Stops go on a loss of 24,600. Technicals finished with a new long 'buy' trigger in Stochastics.
 


The S&P finished above the 3-week ...



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Digital Currencies

Only 0.04% Of Taxpayers Are Reporting Any Bitcoin Gains To The IRS

Courtesy of Zero Hedge

With the US tax deadline just one day away, crypto investors who traded actively during the market's run-up and inevitable meltdown should have a lot of activity to report to the IRS.

But according to a survey conducted by Credit Karma, only a handful of people who have filed their taxes using Credit Karma's tools have reported bitcoin holdings or holdings of some other cryptocurrency - fewer than 100 out of a total of 250,000 filers, or a whopping 0.04% in total.

In all likelihood, this means that (tens of) thousands of bitcoin traders are refusing to pay the IRS, either betting on the anonymity of the blockchain to conceal th...



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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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Biotech

How your brain is wired to just say 'yes' to opioids

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

 

How your brain is wired to just say ‘yes’ to opioids

A Philadelphia man, who struggles with opioid addiction, in 2017. AP Photo/Matt Rourke

Courtesy of Paul R. Sanberg, University of South Florida and Samantha Portis, University of South Florida

...

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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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OpTrader

Swing trading portfolio - week of September 11th, 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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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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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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About Ilene:

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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