Posts Tagged ‘deficit hawks’

Cookies for Susie and Obama’s “Temporary” Tax Compromise

Courtesy of Mish 

Woman with tray of cookies

President Obama has agreed to a tax deal that’s bound to please deficit-hawk hypocrites on both sides of the aisle. The cost is a mere $30 billion spread over 10 years. Spreading the cost over 10 years is an interesting concept given that the extensions are "temporary" for only 2 years.

Of course the last extension was "temporary" and the next extension will be "temporary" as well which makes me wonder about that $30 billion cost.

I have a better idea, why don’t we just "temporarily" extend these deals until 2020 and be done with it? We might be in a genuine recovery by then.

Of course we will then have to factor in the idea that we may need to "temporarily" extend the benefits "one" more time lest we sink the nascent 2020 recovery.

Obama’s Proposed "Compromise"

Inquiring minds may be asking "Just how compromising is the compromise, and more importantly, what’s in it for Susie?" Those are very good questions. The answers can be found in the article Obama Agrees to Extend Tax Cuts for Everyone for Two Years.

President Barack Obama said he’ll agree to a two-year extension of all Bush-era tax cuts in exchange for extending federal unemployment insurance. The plan also would cut the payroll tax by 2 percentage points.

Obama said he would accept a lower rate for the estate tax than Democrats wanted in order to break a stalemate over extending the Bush tax cuts before Congress adjourns. The current tax rates, enacted in 2001 and 2003, are set to expire Dec. 31.

Without the compromise, middle-income families would become “collateral damage for political warfare here in Washington,” Obama said in televised remarks. He said he still believes the nation can’t afford to permanently extend the top tax rates.

“This compromise is an essential step on the road to recovery,” Obama said.

In addition to keeping the current tax rates for all Americans, the plan outlined by Obama would extend aid for the long-term unemployed for another 13 months. The payroll tax — which funds Social Security and Medicare — would be cut by 2 percentage points during 2011 to help spur hiring.

Obama also endorsed allowing a full deduction for equipment purchases that currently must be deducted over time. The proposal would accelerate $200 billion in tax savings for companies in the first


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Forget a Double Dip. We’re Still in One Long Big Dipper.

Forget a Double Dip. We’re Still in One Long Big Dipper.

Courtesy of Robert Reich

It’s nonsense to think of the economy heading downward again into a double dip when most Americans never emerged from the first dip. We’re still in one long Big Dipper.

Big Dipper, the asterism of the constellation the Big Dipper, the Plow or Ursa Major. Photograph was a time exposure to create star trails with a brief interlude to highlight the important constellation stars.

More people are out of work today than they were last year, counting everyone too discouraged even to look for work. The number of workers filing new claims for jobless benefits rose last week to highest level since February. Not counting temporary census workers, a total of only 12,000 net new private and public jobs were created in July — when 125,000 are needed each month just to keep up with growth in the population of people who want and need to work.

Not since the government began to measure the ups and downs of the busines cycle has such a deep recession been followed by such anemic job growth. Jobs came back at a faster pace even in March 1933 after the economy started to “recover” from the depths of the Great Depression. Of course, that job growth didn’t last long. That recovery wasn’t really a recovery at all. The Great Depression continued. And that’s exactly my point. The Great Recession continues. 

Even investors are beginning to see reality. Starting in February the stock market rallied because corporate profits were rising briskly. Investors didn’t mind that profits were coming from payroll cuts, foreign sales, and gimmicks like share buy-backs — none of which could be sustained over the long term. But the rally died in April when investors began to see how paper-thin these profits actually were. And now the stock market is back to where it was at the start of the year.

What to do? First, don’t listen to Wall Street and the right.

Forget the Neo-Hoover deficit hawks who day we have to cut government spending and trim upcoming deficits. We didn’t get into this mess and aren’t remaining in it because of budget deficits. In fact, the only way to reduce long-term deficits is to restore jobs and growth so government revenues rise and expenses like unemployment insurance drop.

Ignore the government haters who say we have to void or delay upcoming regulations of Wall Street and big business. We got here because Wall Street went bonkers, the housing bubble burst, and the middle class couldn’t continue to spend because their health-care bills were soaring…
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Wall Street Deficit Hawks Have No Shame

Wall Street Deficit Hawks Have No Shame

alan greenspanCourtesy of Dean Baker of Center for Economic and Policy Research

Almost 25 million people are unemployed or underemployed right now. This was a completely preventable disaster. This is worth repeating a few hundred billion times so that even the geniuses in Washington can understand it.

The disaster was completely preventable. The reason we had the disaster was that the people controlling economic policy, that would be people like Alan Greenspan and Robert Rubin, either had no clue about the housing bubble or deliberately decided to ignore it.

Nothing about this story is complicated – let’s write this so that even a Wall Street billionaire can understand it. We had an $8 trillion housing bubble. It was inevitable that it would collapse. Bubbles do that. When we get an over-priced housing market then builders build more homes. That’s because it becomes very profitable to build homes when prices are high. If builders keep building lots of homes, then eventually there will not be enough people to buy them at bubble–inflated prices, even with the loony mortgages being pushed at the time by the Wall Street banks.

When people can no longer buy homes, their prices drop. When their prices drop people will default on their mortgages and banks lose lots of money.

man read a newspaper in bath

More importantly, when prices drop, builders stop building homes. People also stop spending money based on their housing bubble wealth. The falloff in construction and consumption implies more than $1 trillion in lost demand in the economy. This lost demand throws the economy into a serious recession, with tens of millions of people losing their jobs. It’s all very very simple. You probably don’t even need an intro economics course to understand it.

But, the deficit hawks, led by Wall Street investment banker Peter Peterson either did not see the bubble or chose to ignore it. They ran around the country in the peak years of the housing bubble yelling about “fiscal irresponsibility” even as the housing bubble was growing to ever more dangerous levels. They used their money and their political standing to dominate public debate and crowd out those of us who were trying to warn about the bubble. There were numerous television shows, radio shows and news stories devoted to their dire warnings about the deficit. They even persuaded a major documentary maker to put out…
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Phil's Favorites

Britain has its first new deep coal mine in decades - a result of pretending climate change isn't political

 

Britain has its first new deep coal mine in decades – a result of pretending climate change isn't political

Oscar Johns / shutterstock

Courtesy of Rebecca Willis, Lancaster University

The UK is widely seen as a climate leader. Its Climate Change Act, which passed into law ten years ago, is the envy of the world. It has targets for carbon reduction enshrined in law, and recently, the government hinted that it would adopt a target of zero greenhouse gas emissions by 2050 (the current target is an 80% reduction). Four years ago, the government, with cross...



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ValueWalk

The Future Of National Beverage Corp. (FIZZ) Stock; Cannabis Webinar

By Jacob Wolinsky. Originally published at ValueWalk.

Whitney Tilson’s email to investors discussing the LaCroix maker National Beverage Corp. (FIZZ)’s stock; Tesla; Cannabis webinar; question 3; Jamaica.

1) I’m still sniffing around National Beverage Corp, best known for its LaCroix brand of flavored sparkling water, which I wrote up as my Stock Idea of the Day in my ...



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Zero Hedge

"It Feels Eerily Like 2007" - DoubleLine's Gundlach Blasts Fed's "Unprecedented Reversal"

Courtesy of Zero Hedge

As the whipsaw in stocks and the dollar sank in today - while the bond market remains unimpressed by the machine's liftathon today - market participants are still shaking their heads at what just happened.

One of the more outspoken of those market participants is DoubleLine CEO Jeffrey Gundlach who took to Twitter this morning to express his disdain...

Three months ago the Fed predicted totally different policy than where they are now. How can they predict 2020 policy with a straight face?

— Jeffrey Gundlach (@TruthGundlach) March 21, 2019

 

But he was not done, in a brief i...



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Kimble Charting Solutions

Interest Rates Sputter... Is U.S. Economy Next?

Courtesy of Chris Kimble.

The Federal Reserve wasn’t quite as hawkish as investors expected. The result: Treasury bond yields (interest rates) fell sharply.

In today’s chart of the 10-Year US Treasury Yield, we highlight the reversal in rates that occurred late last year.

This wasn’t just any old reversal, though. It occurred along the same long-term downtrend line that produced reversals in the years 2000 and 2007.

A closer look at the chart and it appears that 10-year yields are breaking short-term support. This is also occurring as monthly momentum rolls over fr...



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Chart School

Silver is cheap vs Gold

Courtesy of Read the Ticker.

Metal investors will be paying attention to how out of favor silver is relative to gold. And it is hard to wonder why with the well forecast boom of electric cars expected over the next 10 years. Who owns all the silver? JM Bullion has a series of charts here. Notice the stock pile held by JPM. They will do will if silver gets to $30 USD an once!

Chart up to April 2017



As of the 20th of March 2019 the US Federal Reserve has switched to dovish...

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Insider Scoop

Wells Fargo Expects FedEx Margins To Remain Under Pressure From Market Woes

Courtesy of Benzinga.

FedEx Corporation (NYSE: FDX) reported disappointing third-quarter results Tuesday and lowered its fiscal 2019 guidance.

The flexibility of the company’s network allows it to respond more quickly to competitive threats and a tough supply chain environmen...



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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

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

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down

 

Facebook's cryptocurrency: a financial expert breaks it down

Grejak/Shutterstock

Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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

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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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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