Posts Tagged ‘tax revenue’

How You’re Going to Get Cornholed Thanks To Obama

How You’re Going to Get Cornholed Thanks To Obama

Courtesy of Karl Denninger of The Market Ticker

The economy, that is.

This is a must-read from Chris Whalen.  He’s spot-on, and I will reprint only the conclusions – read through for the why, what and how.

  • The U.S. banking industry entering a new period of crisis where operating costs are rising dramatically due to foreclosures and loan repurchase expenses. We are less than ¼ of the way through foreclosures. The issue is recognizing existing losses ??not if a loss occurred.

  • Failure by the Bush/Obama to restructure the largest banks during 2008?2009 period only means that this process is going to occur over next three to five years – whether we like it or not. Lower growth, employment are the cost of this lack of courage and vision.

  • The largest U.S. banks remain insolvent and must continue to shrink until they are either restructured or the subsidies flowing from the Fed, Fannie Mae/Freddie Mac cover hidden losses. The latter course condemns Americans to years of economic malaise and further job losses.

Yep.

The bottom line folks is that the fraud – massive and outrageous concealment of losses, intentionally making bad loans in the mid-2000s (now admitted to under oath by Citibank’s chief underwriter, among others) and the selling of that paper everywhere and anywhere that the banks could manage, along with holding much of it themselves, condemns us.

The opportunity to take these banks into receivership in 2007 existed.  It existed in 2008 too.  I counseled on doing exactly this during those years. 

Instead, both Bush and Obama decided to protect those who had committed these offenses.  First by attempting to bail them out, and then when it became obvious that $700 billion of taxpayer money was literally trying to **** on a forest fire to put it out they decided instead to paper it over by extorting FASB so the losses could be swept under the carpet instead of recognized.

The problem is that unlike long-run spending problems like Social Security and Medicare, which will detonate in ten year or more, this is a current account cash-flow problem and the deterioration continues month-by-month as the payments are not made.  It’s like a barrel of dead fish.  The next morning it starts to stink.  Every day it stinks worse.  Putting a…
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Oregon Tax Revenue from Measure 66 is 50% Short of Predictions; Oregon Grants Unions 4.75% Pay Hike

Oregon Tax Revenue from Measure 66 is 50% Short of Predictions; Oregon Grants Unions 4.75% Pay Hike

Courtesy of Mish 

From the dysfunctional state of Oregon comes news that Measure 66fell about 50% short of its revenue predictions. Balance that with 4.75% pay hikes and it adds up with a continuing refusal by Oregon to address its problems.

Oregon Grants Unions 4.75% Pay Hike

5 percent pay increase for Oregon state union employees begins Wednesday

A step pay increase of nearly 5 percent for Oregon state workers represented by unions goes into effect Wednesday. The 4.75 percent increase will cost the state as much as $16 million through the end of the two-year budget period.

Measure 66 Falls Short

Oregon tax revenues from Measure 66 coming up short of predictions

Early indicators suggest the state won’t receive nearly as much as officials expected from a tax increase on wealthy Oregonians — raising questions of whether January’s bitterly fought election was worth it.

The latest numbers show Measure 66, which set higher tax rates on households making more than $250,000 a year, and on individual filers making half that, has brought in about $70 million in additional collections to date.

"We’re thinking we’re right around half of what we expected about this time," said Paul Warner, head of the Legislative Revenue Office.

Here’s the deal. Oregon raised taxes for the benefit of unions and now they have to raise taxes again because the state only got half as much revenue from the tax hike as expected. When does the madness stop?

I have written about Oregon a lot recently.

Dysfunctional Oregon

August 22, 2010: Dysfunctional Oregon

Sight unseen, I am willing to state that Oregon should get rid of all 64 state boards, no matter what they are supposed to do. Sight seen, it’s time Oregonian voters relegate Gov. Ted Kulongoski to the ash heap of history.

Overoptimism Oregon Style

August 18, 2010: Oregon Wins Blue Ribbon for Unfounded Optimism; Everything "Weaker than Expected"

In July of 2009 state revenue projections were $222.8 million to the plus side. Now just one year later, smack in the midst of a "recovery", a $577.2 million June 2010 deficit is too optimistic by as much as another $500 million.

Congratulations of sorts go to Oregon for winning the blue ribbon for unfounded optimism.

Oregon has already cut state spending by


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The Challenge of Closing Tax Loopholes For Billionaires

"Call me old fashioned but I just think it’s wrong that a single hedge fund manager earns a billion dollars, when a billion dollars would pay the salaries of about 20,000 teachers." Guess I’m old fashioned too. I find the bonuses and tax evading practices of the ultra-weathy financiers even more outrageous than Mish’s Union examples. If free markets are a contradiction of terms – while we’re headed in the opposite direction at lightening speed – maybe we could at least strive for fairer markets? And good luck with that given we need the participation of our corrupted, banker and lobbyist-owned politicians. – Ilene 

The Challenge of Closing Tax Loopholes For Billionaires

Income Tax: John Bull

Courtesy of Robert Reich

Who could be opposed to closing a tax loophole that allows hedge-fund and private equity managers to treat their earnings as capital gains – and pay a rate of only 15 percent rather than the 35 percent applied to ordinary income?

Answer: Some of the nation’s most prominent and wealthiest private asset managers, such as Paul Allen and Henry Kravis, who, along with hordes of lobbyists, are determined to keep the loophole wide open. 
 
The House has already tried three times to close it only to have the Senate cave in because of campaign donations from these and other financiers who benefit from it.
 
But the measure will be brought up again in the next few weeks, and this time the result could be different. Few senators want to be overtly seen as favoring Wall Street. And tax revenues are needed to help pay for extensions of popular tax cuts, such as the college tax credit that reduces college costs for tens of thousands of poor and middle class families. Closing this particular loophole would net some $20 billion. 
 
It’s not as if these investment fund managers are worth a $20 billion subsidy. Nonetheless they argue that if they have to pay at the normal rate they’ll be discouraged from investing in innovative companies and startups. But if such investments are worthwhile they shouldn’t need to be subsidized. Besides, in the years leading up to the crash of 2008, hedge-fund and private equity fund managers weren’t exactly models of public service. Many speculated in ways that destabilized the whole financial system.

Nor…
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Federal Tax Revenues Suffer Biggest Drop Since Great Depression

Federal Tax Revenues Suffer Biggest Drop Since Great Depression

Courtesy of Mish

Recession? What recession? This is a depression. No it’s not the great depression, but this is no ordinary recession as measured by housing, jobs, the stock market, the CPI, auto sales, and now federal tax revenues.

Inquiring minds note Federal Tax Revenues Plummet Most Since 1932.

The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession’s impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

The last time the government’s revenues were this bleak, the year was 1932 in the midst of the Depression.

In May the government’s best estimate was that Social Security would start to pay out more money than it receives in taxes in 2016, and that the fund would be depleted in 2037 unless changes are enacted.

Some experts think the sour economy has made those numbers outdated.

"You could easily move that number up three or four years, then you’re talking about 2013, and that’s not very far off," said Kent Smetters, associate professor of insurance and risk management at the University of Pennsylvania.

The government’s projections included best and worst-case scenarios. Under the worst, Social Security would start to pay out more money than it received in taxes in 2013, and the fund would be depleted in 2029.

The fund’s trustees are still confident the solvency dates are within the range of the worst-case scenario, said Jason Fichtner, the Social Security Administration’s acting deputy commissioner.

"We’re not outside our boundaries yet," Fichtner said. "As the recovery comes, we’ll see how that plays out."

President Barack Obama has said he wants to tackle Social Security next year, after he clears an already crowded


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Phil's Favorites

Artificial intelligence will make you smarter

 

Artificial intelligence will make you smarter

People plus machines will surpass the capabilities of either element alone. metamorworks/Shutterstock.com

Courtesy of Terrence Sejnowski, University of California San Diego

The future won’t be made by either humans or machines alone – but by both, working together. Technologies modeled on how human brains work are already augmenting people’s abilities, and will only get more influential as society gets used to these increasingly capable machines.

Technology optimists have envisione...



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Zero Hedge

Israel's Defense Chief Says "No Choice But War" As Forces Build Along Gaza Border

Courtesy of ZeroHedge. View original post here.

We reported over the weekend that Israel has mustered its largest build-up of tanks and armored personnel carriers since 2014 at a deployment area along the border with Gaza and that "all-out war" looks inevitable after weeks of heightened tensions with Hamas. This after special UN envoy for the Middle East, Nickolay Mladenov late last week warned the UN Secur...



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Kimble Charting Solutions

Short the S&P 500 and Go Long Gold Miners Time?

Courtesy of Chris Kimble.

The precious metals sector continues to be a “grind”, offering a few trades but mostly sideways to lower action. Gold prices have slogged along and this had held the Gold Miners (NYSEARCA:GDX) back… until recently.  The Gold Miners (GDX) and the broader Gold & Silver Miners Index (XAU) came to life in September and October.

The miners are in a multi-year down trend, however there is a potential bullish setup in place. See the chart below where we highlight the ratio of the Mining Index (XAU) to the S&P 500 (SPY). The ratio, which Gold Bugs want to see rising, looks to have created a bullish reversal last month at the 2016 lows at point (1).

And October is seeing a follow-through move...



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Insider Scoop

Wedbush: Unlike Many Retail Peers, RH Is 'Thriving'

Courtesy of Benzinga.

Related RH Benzinga's Top Upgrades, Downgrades For October 23, 2018 RH's Retail Strategy, Recent Pullback Turn Stifel Bu...

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Chart School

Weekly Market Recap Oct 21, 2018

Courtesy of Blain.

After the heavy selling the week prior there was sure to be an oversold bounce and indeed last Tuesday brought much of that.  It is always interesting to see what happens after that bounce – often in this bull market, once the indexes turn back up they move like a freight train.  This time – thus far at least – the action has been less aggressive.  Selling on Thursday took the S&P 500 right back down to the 200 day moving average and rally attempts Friday were fruitless.  In whole the S&P 500 barely budged for the week.

Yields on the 10 year have thus far held their own “breakout” level:

The Chinese market had an interesting Friday with an “...



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Digital Currencies

Grocers: Get ready to join the blockchain party

 

Grocers: Get ready to join the blockchain party

Five people died and more than 200 got sick during a 2018 E. coli outbreak, the largest in more than a decade. The bacteria was traced to contaminated romaine lettuce. (Shutterstock)

Courtesy of Sylvain Charlebois, Dalhousie University

In the wake of this year’s large E. coli outbreak, Walmart notified its leafy green suppliers that they must be using blockchain technology to trace their products before the end of 2019.

Walmart, one of the world’s largest retailers, has be...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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Members' Corner

Why obvious lies still make good propaganda

 

This is very good; it's about "firehosing", a type of propaganda, and how it works.

Why obvious lies still make good propaganda

A 2016 report described Russian propaganda as:
• high in volume
• rapid, continuous and repetitive
• having no commitment to objective reality
• lacking consistency

...

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Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

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

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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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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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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