What happened to all of the doom and gloom economic threads?

[richard_daily]

^^^ The Stupid son of a bitch continues to avoid taking personal responsibility for his false email spam. He's learned soooo much from his mentor Vetteman.

Obama has issued less executive orders than Reagan did in 3.5 years.

Time to move the goalposts again!

 

[unregistered]

 

[unregistered]

 

[richard_daily]

How many costing the taxpayer more than 100 million?

That's only half as much as his trip to India, right???

 

[mercury14]

Euro Zone Factory Data Flag ‘New Recession’


Euro zone manufacturing put in its worst performance in the three months to September since the depths of the Great Recession, with factories hit by falling demand despite cutting prices, a business survey showed on Monday — pointing to a new recession.

Read more here:

http://www.cnbc.com/id/49236771

The Euro Zone Doom & Gloom thread is that way.

 

[eyer]

Americans face $3,500 fiscal cliff tax hit

http://i2.cdn.turner.com/money/dam/assets/121001054443-chart-fiscal-cliff-2-story-top.jpg

NEW YORK (CNNMoney) -- American households face an average tax increase of $3,500 if Congress doesn't act to avert the fiscal cliff, according to a new analysis from the Tax Policy Center.

Overall, 88% of households would end up with higher taxes.

That's because a record number of tax increases -- due mostly to the expiration of temporary provisions put in place since 2001 -- are set to take effect starting in January.

All told, the center estimates that the fiscal cliff tax provisions would raise an additional $536 billion in revenue next year, or 21% of what the federal government would otherwise collect.

The range of average tax increases is enormous depending on one's income level.

The top 1% of households, which have incomes above $506,210, would face an increase of $121,000. Within that group, the top 0.1% -- those making more than $2.66 million -- would get hit with a tax hike of nearly $634,000.

By contrast, households making up to $20,113 would see a $412 average increase. That may simply represent a smaller refund to those households, many of which have very little if any federal income tax liability to begin with.

Households in the middle -- with total incomes between $39,790 and $64,484 -- can expect a roughly $2,000 increase.

"Households with low incomes would be particularly affected by the expiration of tax credits expanded or created by the 2009 stimulus," the Tax Policy Center wrote on Monday. "And households with high incomes would be hit hard by the expiration of the 2001/2003 tax cuts that apply at upper income levels and the start of the new health reform taxes."

The 2010 health reform law will impose additional Medicare taxes on the wages and investment income of those making more than $200,000 ($250,000 if married filing jointly).

Full piece here:

http://money.cnn.com/2012/10/01/pf/taxes/fiscal-cliff-tax/?google_editors_picks=true

 

[IrezumiKiss]

http://24.media.tumblr.com/tumblr_mb8dgba7W21ql6jblo1_500.png

 

[mercury14]

Full piece here:

http://money.cnn.com/2012/10/01/pf/taxes/fiscal-cliff-tax/?google_editors_picks=true

So going back to the Clinton era tax rates would knock about 5.5 trillion off the deficit?

 

[mercury14]

Well of course not. How much did Obama’s Indian trip cost again, that survey nonsense etc etc?

Birther.

Woof!

Ask him to show you his proof that 78 Democratic members of Congress are official card-carrying socialists.

 

[4est_4est_Gump]

...the Fed creates money by purchasing assets (mostly mortgage debt) and expanding its balance sheet by about $40 billion per month. For all practical purposes, the expressions creating money and printing money are the same if measured by their impact.

In the late 1970s, as inflation kept rising into double-digit range, President Jimmy Carter decided that it was time for price controls. Price controls had been used many times before for periods of time but they never really worked and almost always had unintended consequences. Forcing prices lower usually results in increased demand and in lower supply. In the late 70s, the last item that stayed in a price control environment was beef. For weeks, you couldn’t go to a supermarket and find hamburger meat. People bought it in anticipation that prices would rise as soon as price controls went away. Beef suppliers withheld supply toward the end, exacerbating the situation. You can almost guess the conclusion. The price controls end, supplies flooded the market and there were no buyers. Everyone already had enough hamburger meat in the freezer to supply the entire barbeque needs of the following summer. Prices plunged.

Temporary tax credits aren’t exactly price controls but their impacts are similar. Look what happened while the home buyer tax credits or cash-for-clunker programs were in place and then looked what happened after. Sales spikes during, in effect, a government sale only to dry up once the program
ended. Eventually supply and demand normalized again and life went on. Neither program had a long term effect on the auto or housing market. Indeed, housing is just bottoming now, a full two years after the last tax credits expired.

But we do have price controls in place elsewhere in the U.S. and they are causing major distortions. If you haven’t figured it out yet, I am talking about the zero interest rate policy of the Federal Reserve. In theory, the Fed thinks that zero interest rates will stimulate additional buying and increase monetary velocity. No one can prove whether that conjecture is right or not because I can’t prove whether 10 more houses or a million more houses were sold because interest rates were a quarter percentage point lower than would be in a free market environment. But what I can say is that with mortgage rates at all-time lows, the level of mortgage refinancing is far below record levels and the number of new homes being sold is only about half the 20-year average and only about a third of what they were at the peak less than six years ago. I also can tell you that corporations have record levels of cash on their balance sheets. They have used the low interest rate environment to raise money at a negative real cost (inflation minus the after-tax cost of debt) so that they will be able to withstand the next future economic downturn without being dependent either on the financial markets or the banks. The bottom line is that there probably has been some modest economic benefit from lower rates but not very much. Furthermore, each additional attempt to pump in more money and move rates fractionally lower seems to have less and less impact.


I have discussed the benefits but what about the costs? The most obvious and direct cost is what savers lose as the government forces interest rates lower. If I ignore government borrowing, there is roughly $10 trillion of monetary assets (net) tied to floating interest rates. Net means assets tied to floating rates minus liabilities (mostly working capital loans, home equity loans, and credit card debt). Thus every one percentage point change in rates equals about $100 billion in lost income. Clearly, the group most impacted is seniors living on retirement. The obvious beneficiary to the low rates is the government, both Federal and local, that get the benefit of a big reduction in borrowing costs.


The low rates have a more insidious cost. One of the purposes of a zero interest rate policy is to entice holders of money to put it to work. That means invest it or spend it. Money sitting still earning nothing in a world that has some degree of inflation loses its value. Since no one wants to lose, there is incentive to put it to work, particularly when the government tells you that it plans to keep rates near zero from now to whenever, which could be when my youngest grandson gets to the age where he might get Social Security, assuming it’s still there for him. That means more people buying junk bonds than should be buying junk bonds. That means junk bonds are overpriced. They may stay overpriced as long as the government artificially keeps interest rates near zero but they won’t remain overpriced when markets get back to normal. It means commercial income-producing real estate is overpriced for the same reasons. In fact, the Fed’s policy is designed to lift the value of all assets so that there will be some sort of trickle down wealth effect. That means bonds, stocks, art and even gold are overpriced.

Does that mean everything is a sale? Not today necessarily because the government has told us that it will keep prices artificially high indefinitely. But indefinitely doesn’t mean forever. At some point, this bubble bursts. At some point, inflation will erupt and force the government out of its fantasy world of distortion creation. Price controls always end badly and make no mistake, zero interest rates are simply another form of price control. Even the Fed acknowledges that what it is doing is a grand experiment. If governments worldwide showed more fiscal prudence perhaps the experiment might not be so epic. But it is. And the likelihood the central banks of this world can unwind all the excesses they are creating without doing any harm becomes more and more difficult as they expand their collective balance sheets more and more. If they withdraw the excess credit too slowly, then inflation will eat up the value of our assets. If they do it too quickly, then they create a recession, perhaps a nasty one.

During bubbles, it always feels good. Didn’t it feel good to own Amazon, Yahoo and AOL in 1999? Didn’t it feel good when the value of your home was rising near 10% per year and you could borrow to buy a new car any time you wanted to? So enjoy the moment. It may be here for another couple of years but it won’t last indefinitely.

What can we do? Right now, there isn’t much. Gold bugs suggest owning gold but the evidence doesn’t suggest that gold is going higher when everything else, including the world supply of money, is shrinking. Probably the best solution is to ride the wave, at least until there is at a conversation about tightening money or inflation starting to appear. At that point, cash and short term high quality bonds (e.g. Treasuries) become your friends.

What I am trying to say is that while economies are healing and the world is improving, the nice financial markets today are a composite of better economic news accelerated by an unnatural high fed by excessive money creation. The creation of excess money will create distortions that won’t be erased until normal market forces replace artificial ones. Perhaps the biggest pain will be felt by the Federal government itself which will have to find a way to service an exploding debt burden during a time of normal interest rates. The artificial cost today of about $100 billion could easily expand by a factor of four or five. The spending cuts necessary to offset rising interest costs will be very painful and felt by all.

So enjoy the ride for now. It isn’t time to get off. But be aware that today’s magic carpet ride is as real as the one in The Arabian Nights. It will come to an end. Proper policy can ease the pain but it is highly unlikely it will erase the pain...

Good stuff T.

 

[4est_4est_Gump]

NEW YORK (CNNMoney) -- The White House on Friday told government contractors worried about fiscal cliff spending cuts to hold off on warning employees about possible layoffs.

The government said it would cover legal costs if contractors are forced to slash their payrolls because of the looming $109 billion in automatic cuts next year and are alleged to have violated the WARN Act.

Above the law!

http://money.cnn.com/2012/09/28/news/economy/spending-cuts-fiscal-cliff/index.html

 

[4est_4est_Gump]

Gradual Bullsheet

Bernanke knows damn well that the Fed will never "gradually sell these securities". Rather, the only way the Fed would be willing to sell securities is at break-even or a profit.

Yet, if Bernanke honors his pledge to hold those securities until after a recovery is well underway, interest rates will be higher and the Fed will have losses.

Thus, it is the clear intent of the Fed to hold assets it buys from now until maturity (perhaps a decade from now, which for all practical purposes is "permanent"). At that point in the distant future, the Fed may even roll the securities over.

Who Benefits From This?

As I did note previously ...

Bernanke's policies have destroyed those on fixed income (a claim he tries but fails to address in his five questions). More importantly, those with first access to money (primarily banks and the wealthy) are the biggest beneficiaries of monetary printing exercises.

Those wondering how the 1% got so wealthy need only look at the Fed for the answer.

That was a question Bernanke did not address, but I addressed in detail a few days ago in Can the Fed Fight Droids and Win? Apple's SIRI, Driverless Trucks, What's Next? Riveting Video: Are Droids Taking Our Jobs?

Finally, when it comes to "printing" let's flashback to December 8, 2010: Caught in a Massive Lie: Daily Show Comments on Bernanke's Lies Regarding "Printing Money"

Read more at http://globaleconomicanalysis.blogspot.com/#PlreVG5PI7XWyIvO.99

 

[RobDownSouth]

Why is AJ posting nothing but blog opinions today?

Let's look at the headlines!

Stocks tick Higher on Spanish Bailout Hopes

Chrysler says September sales best since 2007

Manufacturing rises in September

Natural gas inventories could reach a record high by end of October, could negatively impact prices

Good news for America....
Bad news for Dances With Falsehoods, the Vettebigot, the Bacon Jew Miles and the stupid son of a bitch Koalabear.

 

[richard_daily]

Why is AJ posting nothing but blog opinions today?

Let's look at the headlines!

Stocks tick Higher on Spanish Bailout Hopes

Chrysler says September sales best since 2007

Manufacturing rises in September

Natural gas inventories could reach a record high by end of October, could negatively impact prices

Good news for America....
Bad news for Dances With Falsehoods, the Vettebigot, the Bacon Jew Miles and the stupid son of a bitch Koalabear.

Books, not blogs.

 

[RobDownSouth]

Books, not blogs.

Rules for we, not for he.

or sumthin' like that...

 

[koalabear]

Why is AJ posting nothing but blog opinions today?

Let's look at the headlines!

Stocks tick Higher on Spanish Bailout Hopes

Chrysler says September sales best since 2007

Manufacturing rises in September

Natural gas inventories could reach a record high by end of October, could negatively impact prices

Good news for America....
Bad news for Dances With Falsehoods, the Vettebigot, the Bacon Jew Miles and the stupid son of a bitch Koalabear.

Hey obese slug, nice to see you. Stocks struggle on Europe worries

 

[unregistered]

 

[RobDownSouth]

Because, he is free to do so.

Yes he does...it's a shame he routinely attempts to deny that common courtesy to others, but I suppose when your core philosophy is "rules for thee but not for Meeeeee" we should expect that sort of selfishness.

 

[IrezumiKiss]

Because, he is free to do so.

http://24.media.tumblr.com/tumblr_m6s0o85iE31qmwtu5o1_500.gif

 

[koalabear]

Could ever get a better reference.

Venezuela's Chavez says he would vote for Obama if American

 

[Ham Murabi]

The Euro Zone Doom & Gloom thread is that way.

Right. Only Obama can use Europe's sluggish economy as an excuse for why the U.S. economy sucks.

 

[Ham Murabi]

Mark Steyn: In the America over which Barack Obama has the tedious chore of actually presiding, second-quarter GDP growth was revised down from 1.7 percent to 1.3 percent – or, for in layman's terms, from "barely detectable" to "comatose." Orders of durable goods fell by 13.2 percent – or, as Obama would say, the future must not belong to people who own household appliances. Growth of capital stock (which basically measures investment in new equipment and software – or, as Obama would put it, investment in "the future") is at its lowest since records began. There are 261,000 fewer payroll jobs than when Obama took office – in a nation where (officially) 100,000 immigrants arrive every month. A few weeks ago, an analysis of government employment data by the nation's oldest outplacement firm, Challenger, Gray & Christmas, discovered that, of the 4,319,000 new American jobs created since January 2010, 2,998,000 – or about 70 percent – went to people aged 55 or older.

 

[unregistered]

 

[mercury14]

Right. Only Obama can use Europe's sluggish economy as an excuse for why the U.S. economy sucks.

You think the people here who post about Europe's economy are doing so because they're making an excuse for the US economy sucking?

 

[mercury14]

Stock Market May Be Headed for Rude Shock This Month

http://www.cnbc.com/id/49238255

I agree, it's a bit higher than warranted. I unloaded like 36K the other day.