Financial News

[Balta1701]

So....is now the time to throw more money into the stock market?

The answer is "maybe".

 

1. Some of the "upcoming wealth for wealthy shareholders" has already been priced in so that will limit the effects

2. There is still some room for the economy to heat up. When the government prints money, it does push the economy to heat up. This bill will do that to some extent, but....

3. The economy heating up will drive inflation. The Federal Reserve reacts rapidly to prevent inflation - they have been raising rates for the last year+ to prevent that. Actions by the Fed will gradually restrict demand, counteracting #2. Eventually, this will probably trigger the next recession, which will probably get worse when whatever frauds have been covered up by the last 8 years of growth start imploding, as we saw in 2002 and 2008.

 

OH, and long term, the dismantling of higher education that is in this bill will be a disaster for so many industries it is hard to believe. Technology, biotech, mining/oil/gas, they are going to be crippled by this bill in a few years.

[caulfield12]

The economy was already growing at a 3+% rate.

 

What the GOP doesn’t seem to understand is that they’re wiping out a large segment of their corporate customer base by continuing to let all of the benefits accrue to the top 10-20% in society.

 

Maybe US corporations can offset losses in the domestic market by selling to China and India eventually, but we’re heading for recession. The Federal Reserve will raise rates again in December, which, ironically, will create more pain in China because debt to GDP rates are even higher here (otoh, China is sitting on a large surplus of capital reserves, roughly $2 trillion, vs. $20 trillion in debt.). Who are US corporations going to sell all their products to, again?

 

The fact of the matter is that eventually these additional cuts (estate taxes were especially unnecessary, that and capital gains from stock sales helped Clinton to actually balance 2-3 budgets in the late 90’s)...will be used as added justification to further cut Medicare, Medicaid and Social Security. Not to mention that the GOP and even some Dems want to invest more into rebuilding defense/military. It all doesn’t add up.

 

We thought hearing anecdotal stories about ObamaCare rates on individual markets going up was disheartening...we haven’t seen anything yet compared to the pain the middle class and poor are going to feel in the next 3-4 years.

 

This fantasy that labor rates are suddenly going to explode (trickle down) when it hasn’t happened with roughly 4% unemployment and the average factory laborer being twice as productive while actually being paid less today in inflation adjusted dollars than back in 1980 is just a complete fallacy. And that was a time when fathers worked and most mothers were able to stay home with their children. That’s no longer a reality for the vast majority of American families, and we’re seeing the consequences with the last two generations being either more spoiled or having completely absent parents.

 

If anything, AI, virtual reality and AR are going to carve out even more of the middle class, not less.

 

Then the conversation will be about universal basic income.

Edited December 2, 2017 by caulfield12

[ptatc]

I also don’t agree with making it cheaper for larger corporations to do business. Your cuts should be to make small business more competitive with the low cost low margin corporations.

Agreed. Jobs are jobs but I think locally is better.

[caulfield12]

More embarrassment for the state of Iowa...

https://www.yahoo.com/news/gop-senator-impl...-022808743.html

 

 

In an astonishing defense of dropping “death taxes” for individual estates worth more than $5.5 million, GOP Iowa Sen. Chuck Grassley implied that people not currently affected by that tax are “spending every darn penny ... on booze or women.”

 

“I think not having the estate tax recognizes the people that are investing — as opposed to those that are just spending every darn penny they have, whether it’s on booze or women or movies,” Grassley told the Des Moines Register in an interview published Saturday. Grassley, who serves on the Finance Committee, made the remark when asked about the Senate tax reform measure which would double the exemption for estates to $11 million for an individual and $22 million for a couple. Heirs would inherit the estates tax-free.

 

Grassley’s comment triggered a wave of criticism on social media. Many complained that the working class is, in fact, spending “every darn penny” on raising their kids, caring for elderly parents, health care and putting food on the table. One Twitter user complained that the GOP was turning America into a version of “The Hunger Games.”

 

 

 

Interestingly, we've moved from protecting "medium sized family farms/businesses" (which make up a TINY percentage of those touched by the current estate tax levels to protecting those hard-working investors.

 

That's an extremely tough point to sell in the Heartland. Pretty tone deaf, but Grassley's ancient and has been out of touch for decades.

 

https://twitter.com/roguecats7/status/93745...4858880/photo/1

 

 

According to IRS data from 2016, just 682 tax filers in the entire country who owed estate taxes owned any farm assets. That represents about 13 percent of the 5,219 estate tax returns in which taxes were owed.

 

And even that figure likely overstates the number of primarily farm operations subject to the tax. A 2015 report from the Congressional Research Service projects that just 65 farm estates annually across the U.S. face an estate tax liability. Less than a quarter of these, the congressional report finds, have insufficient cash to pay their tax bills.

 

A U.S. Department of Agriculture analysis published earlier this year found a somewhat higher number of farm estates owed the tax in 2016: 0.4 percent, or about 160 nationwide.

 

Kristine Tidgren, the assistant director of the Center for Agricultural Law and Taxation at Iowa State University, said she’s not aware of any Iowa estates forced to sell land since the estate tax exemption was raised to its current level in 2012.

 

desmoinesregister.com

Edited December 4, 2017 by caulfield12

[StrangeSox]

We've already got our first example of why it's bad to rewrite the tax code of the largest economy in the world over lunch:

 

Passage of Senate Tax Bill Puts R&D Tax Credit in Doubt

Unintended consequence of late decision to keep the corporate alternative minimum tax could be loss of some tax breaks; companies push back

 

 

The biggest consequence could be the research credit, often used by manufacturers, technology firms and pharmaceutical companies, and the National Association of Manufacturers said it was working with policy makers to address the issue.

 

Under the credit, companies get money back from the government for what they spend on innovation, often for wages of scientists and engineers. Corporations will claim $10.3 billion in research credits in 2018, according to the congressional Joint Committee on Taxation.

 

… Murray Energy Corp., an Ohio-based firm and the largest privately held U.S. coal-mining company, complained that the AMT decision and the Senate’s tougher limits on interest deductions made a “mockery out of so-called tax reform.” Robert Murray, the company’s chief executive officer, said the Senate tax plan would raise his company’s tax bill by $60 million.

 

“What the Senate did, in their befuddled mess, is drove me out of business and then bragged about the fact that they got some tax reform passed,” Mr. Murray said in an interview Sunday. “This is not job creation. This is not stimulating income. This is driving a whole sector of our community into nonexistence.”

 

 

In their self-imposed* rush to pass this bill last week, they were hand-writing changes to the bill with no analysis whatsoever up until the last minutes. One of the consequences of this was that in buying off Sen. Johnson by giving a tax break to his family's company, they added the Corporate AMT back into the bill.

 

The problem is, though, that they left it at 20%. Which is the same rate as the new corporate tax rate. So why bother taking tax credits and deductions at all if you're going to be paying 20% no matter what?

 

 

 

 

*just like with health care, the real reason for the rush was to ram it through Congress as quickly as possible before anyone could really understand the bill and build political opposition to it.

[StrangeSox]

This pretty much guarantees that the bill will need to go to conference and be re-voted on by both the Senate and House, though, so there's a slightly better (but still slim) chance that the whole thing just dies. Lowering the corporate AMT will mean the deficit numbers will go up even more, so they'll have to find other pay-fors.

[StrangeSox]

New Gallup poll on the GOP tax plan

 

29% Approval overall

--25% Independents

--7% Democrats

--70% Republicans

 

56% Disapproval

--56% Independents

--87% Democrats

--16% Republicans

[StrangeSox]

Ryan says Republicans to target welfare, Medicare, Medicaid spending in 2018

 

Said with no apparent sense of irony as they're pushing a $1.4T tax cut for businesses and the wealthy

 

House Speaker Paul D. Ryan (R-Wis.) said Wednesday that congressional Republicans will aim next year to reduce spending on both federal health care and anti-poverty programs, citing the need to reduce America's deficit.

 

"We're going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit," Ryan said during an appearance on Ross Kaminsky's talk radio show.

[RockRaines]

I have parents who are on medicare, and its a f***ing travesty they are going to cut it.

[StrangeSox]

I'm sure all of the Boomers who will be voting to cut this will grandfather themselves in to whatever changes they want to make.

[caulfield12]

https://www.reuters.com/article/us-usa-labo...e-idUSKBN1DY2JH

 

They snuck this one in about redistributing tips from servers to the business owners during the holidays when they will receive far less blowback.

 

Imagine having money taken away via taxes for credit card tips while it’s simultaneously being redistributed...and just as likely business owners using it to subsidize lower wages for back of house staff than actually raising the pay of any of those workers.

 

Winning.

[ptatc]

We've already got our first example of why it's bad to rewrite the tax code of the largest economy in the world over lunch:

 

Passage of Senate Tax Bill Puts R&D Tax Credit in Doubt

Unintended consequence of late decision to keep the corporate alternative minimum tax could be loss of some tax breaks; companies push back

 

 

 

 

 

In their self-imposed* rush to pass this bill last week, they were hand-writing changes to the bill with no analysis whatsoever up until the last minutes. One of the consequences of this was that in buying off Sen. Johnson by giving a tax break to his family's company, they added the Corporate AMT back into the bill.

 

The problem is, though, that they left it at 20%. Which is the same rate as the new corporate tax rate. So why bother taking tax credits and deductions at all if you're going to be paying 20% no matter what?

 

 

 

 

*just like with health care, the real reason for the rush was to ram it through Congress as quickly as possible before anyone could really understand the bill and build political opposition to it.

This is what happens when you only have one side pushing something through without a real attempt at a compromise solution. But to be fair, Republicans really didn't want the healthcare revisons and democrats really didn't want the tax revisions.

[ptatc]

I'm sure all of the Boomers who will be voting to cut this will grandfather themselves in to whatever changes they want to make.

Well why wouldn't you?

[ptatc]

I have parents who are on medicare, and its a f***ing travesty they are going to cut it.

The true travesty is the rampant medicare fraud. If they took the money from the cuts and used it to enforce the medicare rules they would probably make enough money to expand it.

 

I've quit jobs because of what they wanted me to do with my medicare charges. I reported them and nothing happened to them, that I know of anyway.

[caulfield12]

https://finance.yahoo.com/news/trump-lousy-...-191316112.html

 

Trump Is Doing a Lousy Job Selling Tax Cuts

 

 

Most of those people who think their taxes will go up are wrong. Third-party analysis by the Tax Policy Center shows that, under the House tax-cut plan, 76% of taxpayers would get a tax cut averaging $1,900 the first year the plan goes into effect. About 7% of taxpayers would face a tax increase, averaging $2,100. For the other 17% there’s likely to be no major change.

 

Under the Senate plan, 75% of taxpayers would get a tax cut in the first year, averaging $2,000, according to the Tax Policy Center. Seven percent of taxpayers would face tax hikes, averaging $3,100. The other 18% would see no major change.

 

So, under the best independent estimates, roughly three-quarters of taxpayers would enjoy an immediate tax cut, and only 7% would see a tax hike. Yet the public has a completely different impression, according to the Quinnipiac poll. The portion of people who think their taxes will rise is six times larger than those who will actually see a tax hike. And less than one-third of people likely to see a tax cut think it will actually happen.

 

If the GOP tax-cut plan were an ordinary product marketers had to convince consumers to buy, it would be a total bomb. Imagine Apple selling a phone consumers thought would be unable to place phone calls. Or Coke selling a beverage people expected to taste terrible. This is how bad the GOP’s sales pitch is for a tax-cut plan they’ve been developing for years.

 

 

fwiw, not sure if that's also accounting for expected rises in health care insurance directly attributable to ending the ObamaCare mandate to buy insurance or pay a penalty...with many young people (25-35) expected to sign up for minimal coverage or dropping coverage, increasing the amount of unhealthy individuals in the risk pool and pushing up rates for the remaining individual market participants by another 15-30% beginning next year

Edited December 7, 2017 by caulfield12

[StrangeSox]

Bitcoin now up over $15k

 

https://twitter.com/nycjim/status/938745648...src=twsrc%5Etfw

[southsider2k5]

Bitcoin now up over $15k

 

https://twitter.com/nycjim/status/938745648...src=twsrc%5Etfw

 

I can't wait until the puts come out.

[RockRaines]

I can't wait until the puts come out.

The crash is going to be staggering.

[StrangeSox]

The weird times when tribalism breaks down, like with support for the GOP health care plans and now their tax plan.

 

 

new CBS News poll on Republican tax plan will help: 76% say large corporations, 69% say the wealthy,

31% say the middle class, 24% say their families

— John Harwood (@JohnJHarwood) December 7, 2017

 

[StrangeSox]

Bitcoin now up over $15k

 

https://twitter.com/nycjim/status/938745648...src=twsrc%5Etfw

 

Look at this extremely outdated post!

 

Now over $17.5k

 

this seems like a good, stable currency.

Edited December 7, 2017 by StrangeSox

[Jenksismyhero]

The crash is going to be staggering.

 

The question is how far will this go. Bitcoin isn't based on anything but perceived value, and that value is being generated by demand. There's a huge amount of demand, but it's really just beginning and bitcoins acceptance, especially globally, is still growing.

 

I find it hard to believe that suddenly, tomorrow, everyone just stops believing that bitcoin is something valuable. $16k valuable? i dunno, but there's really no rhyme or reason here. It could drop or it could rise to a million per. Anyone claiming to know is just guessing.

[StrangeSox]

The question is how far will this go. Bitcoin isn't based on anything but perceived value, and that value is being generated by demand. There's a huge amount of demand, but it's really just beginning and bitcoins acceptance, especially globally, is still growing.

 

I find it hard to believe that suddenly, tomorrow, everyone just stops believing that bitcoin is something valuable. $16k valuable? i dunno, but there's really no rhyme or reason here. It could drop or it could rise to a million per. Anyone claiming to know is just guessing.

 

Bitcoin can process a couple hundred transactions globally simultaneously, and that will only get worse. It's an inherently deflationary "currency" based on converting electricity into bitcoins. It'll never be a major transaction source because it's intentionally limited in usefulness by the underlying technology. It already wastes as much electricity a day as the entire country of Denmark uses. In a couple of years, if it continues on the same pace, it'll waste more than the entire US to produce nothing of actual value.

[southsider2k5]

The question is how far will this go. Bitcoin isn't based on anything but perceived value, and that value is being generated by demand. There's a huge amount of demand, but it's really just beginning and bitcoins acceptance, especially globally, is still growing.

 

I find it hard to believe that suddenly, tomorrow, everyone just stops believing that bitcoin is something valuable. $16k valuable? i dunno, but there's really no rhyme or reason here. It could drop or it could rise to a million per. Anyone claiming to know is just guessing.

 

This has all of the checkboxes of a historical bubble. Just because the product is different doesn't change that.

[RockRaines]

Bitcoin can process a couple hundred transactions globally simultaneously, and that will only get worse. It's an inherently deflationary "currency" based on converting electricity into bitcoins. It'll never be a major transaction source because it's intentionally limited in usefulness by the underlying technology. It already wastes as much electricity a day as the entire country of Denmark uses. In a couple of years, if it continues on the same pace, it'll waste more than the entire US to produce nothing of actual value.

It's also not insured, and completely anonymous. There is no way it doesnt crash. If it doesnt, Ill be shocked.

[StrangeSox]

It's also not insured, and completely anonymous. There is no way it doesnt crash. If it doesnt, Ill be shocked.

 

It's still useful for money laundering, transferring capital out of countries with tight restrictions (China, Russia), drugs, and child pornography so it'll stick around for a little while, at least.