Posts Tagged ‘tax payers’

Government for Sale: How Lobbyists Shaped the Financial Reform Bill

Government for Sale: How Lobbyists Shaped the Financial Reform Bill

By Steven Brill, courtesy of TIME 

government for sale, time

The following is an abridged version of an article that appears in the July 12, 2010, print and iPad editions of TIME.

Two weeks ago, along a marble corridor in the Rayburn House Office Building in Washington, I watched about 40 well-dressed men (and two women) delivering huge value for their employers. Except that we, the taxpayers, weren’t employing them. The nation’s banks, mortgage lenders, stockbrokers, private-equity funds and derivatives traders were.

They were lobbyists — the best bargain in Washington. Capitol Tax Partners, for example, is one of 1,900 firms that house more than 11,000 lobbyists registered to operate in Washington. Last year, according to the Center for Responsive Politics (CRP), firms like Capitol Tax were paid a total of $3.49 billion for unraveling the mysteries of the tax code for a variety of businesses. According to Capitol Tax co-founder Lindsay Hooper, his firm provided "input and technical advice on various tax matters" to such clients as Morgan Stanley, 3M, Goldman Sachs, Chanel, Ford and the Private Equity Council, which is a trade group trying to head off a plan to increase taxes on what’s called carried interest, a form of income enjoyed by the heavy hitters who run venture-capital and other types of private-equity funds. (Time Warner, the parent company of TIME magazine, is also a client of Capitol Tax Partners.)

Since 2009, the Private Equity Council has paid Capitol Tax, which has eight partners, a $30,000-a-month retainer to keep its members’ taxes low. Counting fees paid to four other firms and the cost of its in-house lobbying staff, the council reported spending $4.2 million on lobbying from the beginning of 2009 through March of this year. Now let’s assume it spent an additional $600,000 since the beginning of April, for a total of $4.8 million. With other groups lobbying on the same issue, the overall spending to protect the favorable carried-interest tax treatment was maybe $15 million. Which seems like a lot — except that this is a debate over how some $100 billion will be taxed, or not, over the next 10 years.

And what did the money managers get for their $15 million investment? While lawmakers did manage to boost the taxes of hedge-fund managers and other folks who collect carried interest as part of their work,…
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Senator Jim DeMint: “U.S. Taxpayers Are Helping Finance Greek Bailout”

Senator Jim DeMint: "U.S. Taxpayers Are Helping Finance Greek Bailout"

Republican Senators Hold News Conference On "Senate Transparency"

Courtesy of Tyler Durden

From Senator Jim DeMint

The International Monetary Fund board has approved a $40 billion bailout for Greece, almost one year after the Senate rejected my amendment to prohibit the IMF from using U.S. taxpayer money to bailout foreign countries.

Congress didn’t learn their lesson after the $700 billion failed bank bailout and let world leaders shake down U.S taxpayers for international bailout money at the G-20 conference in April 2009. G-20 Finance Ministers and Central Bank Governors asked the United States, the IMF’s largest contributor, for a whopping $108 billion to rescue bankers around the world and the Obama Administration quickly obliged.

Rather than pass it as stand-alone legislation, President Obama asked Congress to fold the $108 billion into a war-spending bill to send money to our troops.

It was clear such an approach would simply repeat the expensive mistake of the failed Wall Street bailouts with banks in other nations. Think of it as an international TARP plan, another massive rescue package rushed through with little planning or debate. That’s why I objected and offered an amendment to take it out of the war bill. But the Democrat Senate voted to keep the IMF bailout in the war spending bill. 64 senators voted for the bailout, 30 senators voted against it.

Only one year later, the IMF is sending nearly $40 billion to bailout Greece, the biggest bailout the IMF has ever enacted.

Right now, 17 percent of the IMF funding pool that the $40 billion bailout is being drawn from comes from U.S. taxpayers. If that ratio holds true, that means American taxpayers are paying for $6.8 billion of the Greek bailout. Although the $108 billion extra that Congress approved for the IMF in 2009 hasn’t yet gone into effect, you can bet that once it does Greek bankers will come to the IMF again with their hat in hand. And, if other European Union countries see free money up for grabs they could ask the IMF for bailouts when they get into trouble, too. If we’ve learned anything from the Wall Street bailouts it’s that just one bailout is never enough.

To hide the bailout from Americans already angry with the $700 billion bank bailout, Congress classified it as an “expanded credit line.” The Congressional Budget Office only…
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Swiss Cheese Recovery, More Holes Than Cheese

Swiss Cheese Recovery, More Holes Than Cheese

Courtesy of Mish

Slice of Swiss Cheese

Inquiring minds are reading the "Good News" from the Fed’s Beige Book today.

Reports from the twelve Federal Reserve Districts indicated that while economic activity remains at a low level, conditions have improved modestly further, and those improvements are broader geographically than in the last report.

Highlights

  • Consumer spending: The recent 2009 holiday season was modestly greater than in 2008 for eight Districts, although as retailers in the Philadelphia and San Francisco Districts noted, 2008 sales were so low compared with 2007, that the relatively small 2009 gains did not represent a significant shift in trend.
     
  • Nonfinancial Services: Districts reporting on nonfinancial services generally indicated an upward trend in activity, although in some areas reports were mixed.
     
  • Manufacturing: Manufacturing activity has improved since the last report in six Districts.
     
  • Residential: Homes sales increased toward the end of 2009 in most Federal Reserve Districts, except San Francisco, where demand for housing has been steady, and Kansas City, where residential real estate activity has eased since the last Beige Book. In New York, Richmond, and Atlanta, residential real estate activity was described as mixed across areas of the District. In the Atlanta District, existing home sales increased, but new home sales decreased. In all Districts, sales of lower-priced homes tended to increase proportionately more than sales of higher-priced homes, due at least in part to the first-time buyer federal tax credit, according to real estate contacts. In several Districts real estate contacts reported that the original expiration date for the credit boosted sales in November and led to a more than usual slowdown in sales in December.
     
  • Nonresidential: Nonresidential real estate conditions remained soft in nearly all Districts. New York, Philadelphia, Kansas City, and San Francisco reported further weakening in demand for commercial and industrial space.
     
  • Employment, Wages, and Prices: Labor market conditions remained soft in most Federal Reserve Districts, although New York reported a modest pickup in hiring and St. Louis reported that several service-sector firms in that District recently announced plans to hire new workers.
     
  • Loan Demand: Loan demand continued to decline or remained weak in most Districts. St. Louis, Kansas City, Dallas, and San Francisco noted general declines or soft


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California Asks Rest of Nation’s Taxpayers to Help Pay for Its Unbalanced Budget

California Asks Rest of Nation’s Taxpayers to Help Pay for Its Unbalanced Budget

Courtesy of Trader Mark at Fund My Mutual Fund

I have not had time to post some recent data on the growing chasm between public and private worker pay in the US, but I still plan to do it as this is a theme we’ve been pounding the table on since blog inception in 07… [Dec 16, 2007: California in a State of Fiscal Emergency - Coming to a Theater Near You]  Much like many of its people who have spent far more than they take in, the politicos at the state level act no different than the politicos at the federal level.  Spend what you have today, and never assume a rainy day in the future.  Since the state and city level budgets cannot be solved by more and more borrowing, there is only one ultimate solution.  Full subsidization by the federal government, who not only is running massive deficits of its own – but in the end game, will be the vessel for states to run deficits.  [May 5, 2009: Federal Aid Surpasses Sales Tax as Top Revenue Generator for States]  We are now officially at that point as some of the states have run out of accounting gimmicks to paper over deficits.

I tried to be generous in the title of this specific piece since it’s the holiday season, but it really should be something akin to "private workers of country asked for bailout to subsidize early retirement and generous benefit packages for public workers of California."  Or "taxpayers in Idaho asked to pay for imbalances in California."  In LA alone, pension payment will be sucking up 1 in 3 (yes, you heard that right) of all revenues in half a decade.  Leaving the other 2/3rds for minor things like… running the 2nd largest city in the nation.  [Aug 11, 2009: LA Times - Amid Cost Cutting, Los Angeles City Pensions Continue to Soar]  These are the type of things the nation is being asked to subsidize via these "stimulus plans" and whatever the Governor is asking for now.

  • •"We should never, ever design a pension formula that provides more for a person when they


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Tale of Two Economies

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Tale of Two Economies

Courtesy of Mish

How well corporations have fared in the recovery depends largely on two factors.

1) How much cash on hand they had and how conservative there were heading into the recession

2) How much Uncle Sam (taxpayers) bailed them out

The Wall Street Journal has the story in Halting Recovery Divides America in Two.

The U.S. recovery is a tale of two economies.

At one extreme of Corporate America is a cadre of companies and banks, mostly big, united by an enviable access to credit. At the other end are firms, chiefly small, with slumping sales that can’t borrow or are facing stiff terms to do so.

On Main Street, there are consumers with rock-solid jobs — but also legions of debt-strapped individuals struggling to keep their noses above water.

This split helps explain the patchiness of the recovery that appears to be taking hold after the worst recession in a half-century.

The split between companies that can borrow and those that can’t shows the extent to which any recovery depends on reviving the nation’s ailing banks and squeamish credit markets. Until that happens, the vigor of the economy will remain in doubt.

"If you’re not making money, you need to borrow money," says John Graham, a finance professor at Duke University’s Fuqua School of Business. But "you need to be creditworthy in order to borrow, and if you’re not making money, you’re creditworthiness isn’t very strong."

Mr. Graham, who oversees a quarterly survey of CFOs, says more companies are doing better than they were a few months ago. Still, he estimates, one in four is in "dire straights due to lack of profits combined with not being able to borrow."

Companies big enough to bypass banks and go directly to capital markets are finding a warmer reception. That’s because the markets are showing more willingness to make risky loans: In January, only eight of the 56 companies that sold bonds were rated below-investment-grade, or "junk," according to Dealogic. In August, by contrast, 24 of the 60 deals had junk ratings.

Since the start of the year, companies have been increasingly turning to the bond markets to raise money. Through August thus far, companies have issued $395.4 billion in bonds over 512 deals, according to


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Phil's Favorites

Senator Elizabeth Warren and Bloomberg News Need to Give It a Rest with Bashing Wells Fargo and Turn Their Attention to 5-Count Felon, JPMorgan Chase

Courtesy of Pam Martens

Jamie Dimon, Chairman and CEO of JPMorgan Chase

On Tuesday of this week, Bloomberg News published its umpteenth negative article on the San Francisco-headquartered bank, Wells Fargo. This time around, the article was highlighting Senator Elizabeth Warren calling for Wells Fargo to be broken up, with its fe...



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Zero Hedge

The Inelastic Market Hypothesis: Exposing The Fallacy Of Fun-Durr-Mentals

Courtesy of ZeroHedge View original post here.

Via RealInvestmentAdvice.com,

If you take a quick look at returns for the S&P 500 over the last few years, it is easy to be impressed with how lucrative stocks can be. Total returns above 31% in 2019, 18% in 2020, and 21% year-to-date (as of 8/31) can make a difference. Unfortunately, the levitation at the end of this summer hardly stands out in this context. Instead, it is just more of the same.

When stocks are rolling along thi...



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Biotech/COVID-19

Delta is tempting us to trade lives for freedoms - a choice it had looked like we wouldn't have to make

 

Delta is tempting us to trade lives for freedoms — a choice it had looked like we wouldn’t have to make

shutter_o/Shutterstock

Courtesy of Peter Martin, Crawford School of Public Policy, Australian National University

Last year COVID-19 seemed simple. It was horrific, but the arguments about what to do were fairly straightforward.

On one side were people rightly horrified by its rapid spread who wanted us to stay at home and stay away from school and work and socialising in order to save lives.

On the other side were people concerned about the costs of those measures — to jobs, to educati...



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Politics

Political orientation predicts science denial - here's what that means for getting Americans vaccinated against COVID-19

 

Political orientation predicts science denial – here’s what that means for getting Americans vaccinated against COVID-19

Protesters at an anti-vaccine rally in Pennsylvania in August 2021. Weaver/SOPA Images/LightRocket via Getty Images

Courtesy of Adrian Bardon, Wake Forest University

Vaccine refusal is a major reason COVID-19 infections continue to surge in the U.S. Safe and effective vaccines have been available for months, b...



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Digital Currencies

Animal Spirits: Crypto's Gateway Drug

 

Animal Spirits: Crypto’s Gateway Drug

Courtesy of Michael Batnick

Today’s Animal Spirits is brought to you by YCharts

On today’s show we discuss:

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Chart School

Gold and Silver Volume Waves Review

Courtesy of Read the Ticker

The sign says it all. The professionals want the public to focus on the words, to scare out the weak hands, but the color of the sign underlines the value in a money printing world, its gold stupid.

Point and figure (PnF) charts draw price waves with the sum of volume per wave. PnF charts high light true accumulation underneath price action. This is why Richard Wyckoff favored PnF charts.    

In the charts below we see price moving sideways to down, yet volume on up waves are greater than volume on down waves. At the moment there is no heavy selling on down waves. Or in other words price is being moved down at a low volume expense to allow accumulation at a lower price.

This action represents professionals building their...

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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Kimble Charting Solutions

Crude Oil Cleared For Blast Off On This Dual Breakout?

Courtesy of Chris Kimble

Is Crude Oil about to blast off and hit much higher prices? It might be worth being aware of what could be taking place this month in this important commodity!

Crude Oil has created lower highs over the past 13-years, since peaking back in 2008, along line (1).

It created a “Double Top at (2), then it proceeded to decline more than 60% in four months.

The countertrend rally in Crude Oil has it attempting to break above its 13-year falling resistance as well as its double top at (3).

A successful breakout at (3) would suggest Crude Oil is about to mo...



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ValueWalk

Managing Investments As A Charity Or Nonprofit

By Anna Peel. Originally published at ValueWalk.

Maintaining financial viability is a constant challenge for charities and nonprofit organizations.

Q4 2020 hedge fund letters, conferences and more

The past year has underscored that challenge. The pandemic has not just affected investment returns – it’s also had serious implications for charitable activities and the ability to fundraise. For some organizations, it’s even raised doubts about whether they can continue to operate.

Finding ways to generate long-term, sustainable returns for ...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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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