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Five of a kind
Tax them China style
As a nation we are killing ourselves over the budget and the debt
ceiling. Did you see Obama on TV? He looks worn down. He does not have
the power to craft a solution.
That the USA has a consensual process of creating laws is one of the
things that make the country great. It is also one of those things that
just kills us from time to time. Today it is killing “us”, it may well
kill Obama’s chance to get re-elected.
I wonder if we should do this “China Style”. They do it differently.
There is not much debate or discussion. They just print an announcement
in the newspaper. They did just that the other day. So what are income
taxes in China? The answer is they are very high:
The highest bracket of 45% is for anyone earning above $145,000. Of
interest to me is that anyone with an annual income over $64K pays 35%
tax.
This chart looks at US tax liabilities by income group. The highest earners pay an average of about 25%.
If the Chinese marginal rates were applied in the USA it would generate about $1.5 trillion of additional revenue. The budget would be balanced overnight. Of course if the US did something like that it would trigger a massive depression. Why is that?
On underwater housing and unemployment
Reuters has a story out suggesting that there is a shortage of workers:
There
is ample evidence that unemployment is the critical problem today. With
that in mind I found this story to be interesting. Some thoughts:
A) I wonder how much this is a function of the underwater housing market. I hear this all the time:
“I would move to where I could get a better job, but the house is underwater so I’m stuck”
B) Should this trend continue there will have to be some wage increases in the manufacturing sector. That would be welcome, but also inflationary.
Put A and B together and what do you get? Stagflation. That would be Ben Bernanke’s worst nightmare.
On FX Algos
This web site
produced some interesting charts. Some of this I knew from reading Zero
Hedge. Some of it I was not aware of (the extent of this). I find this
very troubling.
This shows that 56% of all NYSE trading is now a result of Algo activity.
$ volume on the NYSE is all over the lot. I find estimates of about $200
billion a day. So $100 billion each day is being traded by the robots.
That’s not new news.
The FX market is going through the same transition as the equities
market. This chart suggest that over 50% of daily turnover is now
computer generated.
But the FX market is a giant compared to stocks. The estimates
are that the FX market volume is more than $4 Trillion each day. (I’m
not sure I trust all these numbers {I think FX turnover is closer to $8T
a day}).
Cut this up as you like. This look at the numbers suggest that as much
as $2 trillion of algo trading is happening in the FX markets every day!
Ten times more in $ terms than all of the NYSE.
Look again at the chart and note that way way back in 2004 Algos represented only 2% of volume. This is exploding.
I’ve noticed that FX markets have been “spikey” all year. I thought it
was just the backdrop of news that was causing the very rapid price
adjustments. Looking closer at what role the robots have in this makes
me re-think that.
I’m not sure when it will happen, but I think the dominance of robots in
FX is going to cause a “flash crash” one day. I just remind everyone
who plays in this sandbox that there will be no “regulator” who will DK
the millions of trades (trillions of dollars) when (not if) this
happens. The losses will be staggering. If you think you can sleep easy
with a stop loss; you're wrong.
Dumb tax breaks
Don’t worry about the railroads. They’re doing just fine. All the
numbers have been moving higher for this group. Trains now move about
45% of all goods. The industry is looking at 100b in revenues and has a
fat (mid teens) profit margin. Ask Warren Buffet. He owns BNSF. He
bought it in 2009, he’s making a fortune.
So why do I bring this up? I saw this and it pissed me off.
So our ‘friends’ who own railroads and are making a fortune are also
getting a tax break from the Feds for new ties that they lay. The tie
business seems to booming as a result.
My point here: We have the absolutely worst tax code that could exist.
We ought to throw the whole thing out the window and start anew. I
doubt that big shots like Warren B would like that very much, so it
won’t happen.
Let them drink water
OJ trading at a record high today. Who cares? Not the Fed.
I’m not blaming the Fed for the high price of orange juice. But I do think it’s a crime that both food and energy prices are exclude from Ben B’s definition of inflation.
I keep expecting the American people to wake up to the realities. They haven’t, yet.
I have confidence that they will at some point. It will take more
record prices for the things we consume for there to be a significant
collective reaction. It’s likely to be ‘noisy’ when it does happen.
The Fed is perpetrating the greatest theft in the history of man. This
will not go un-noticed for much longer. The pendulum is going to swing
the other way for the Fed. Today they have unlimited power and answer to
no one. When the pendulum does swing it will lop off some heads in the
process. I wouldn’t bet on Bernanke’s position in the history books. He
(and the Fed) could end up taking the brunt of the fallout for what is
surely going to come.
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"I am not a liberal..."
Thats the first thing you've said correctly here tonight.
You are not a liberal.
You're a socialist...commonly referred to here in America as a progressive.
If by "progressive" you mean I wish to do battle with the .1% who are stealing our wealth and giving it to themselves while we fight over "entitlements" for the poor.... Oh, never mind. That's not what it means. But I know labels help folks like you, so knock yourself out.
The only one who has stolen from me is statist enablers by the names of Ben Bernanke, Timmy Geithner et al, who devalue my labor by issuing ever increasing amounts of debt to support people you seem to support pressing a gun to the middle classes forehead while they're trying to get home with the groceries.
You're alright.
So is Rocky ;-)
He is right, both sides try to divide & conquer. Just so we're clear, I hate fucking socialists/statists and their hangers on.
These people think something, anything, can be centrally planned and executed from an air conditioned faculty lounge and the world remains a static place during its execution...they are ego-maniacal incompetents.
With that obvious truism, g-nite.
Does the faculty lounge comment reveal your status as a student, meaning you are not actually in the real world and in the tower yourself? Explains a lot. No offense, but work for a couple of decades, run a business, and then let's talk.
"Does the faculty lounge comment reveal your status as a student, meaning you are not actually in the real world and in the tower yourself?"
Your lack of depth and perception is breath taking.
"Explains a lot."
It explains nothing, my two week old strawman.
"No offense, but work for a couple of decades, run a business, and then let's talk."
I am 51.
I have worked since I was in high school. I have run two businesses and faced the maze of bureaucracy that all of that entails.
Your straw is on fire.
Well, a hat tip to you sir. You are one of the more subtle and clever trolls out there.
I guess given your definition, I am compelled to ask... What is your favorite colour? If you know the reference, +1. If you don't, maybe you'll enjoy the movie if you can find it.
I'll take one more shot at it, then I'm done. Ben and Timmy are NOT devaluing your labor to support the poor. They are devaluing your labor to feed the top .1%, while they feed you propanda (that you seem to eat like candy) that they are devaluing your labor to feed the poor. The real welfare queens drive in limos, not old Cadillacs. Yes, there are poor who milk the system, but they are not the problem and if we cut them off we have a whole new problem called anarchy. And before long you'll be with them and the top .1% will repel you from their gates with their fancy military hardware that you have been funding. Get it yet? Never mind. You will one day.
You are proudly presenting a hodgepodge of an opinion here, with hand-picked arguments.
So the poor might cause anarchy, if we cut off their bread and circuses, but that's totally okay, while the evil top .1% are responsible for all bad in the world, and you say you'll give it a shot and tax the bejesus out of them - hey and if it doesn't work out as expected, we can still try something else afterwards, right?
I understand it feels good to rant from time to time, but you shouldn't try to masquerade it here as a thought-through opinion.
You assume the way to get those Mammon worshippers in the .1% is through higher taxes but that will just act as a barrier to smaller would-be competitors who can't afford lobbyists and lawyers to navigate the Federal government codes, rules and regulations. Getting rid of the income tax would make the Fed powerless as the American people themselves would dump dollars like they did the continentals. It would unleash an army of competitors against the worthless among the top .1%. But you don't want that, do you?
I don't know what you've been reading, but I'll give it a shot. End the Fed. Tax the top .1%. Dismantle the military industrial complex. Every king that ever lived despised regulation and being told what to do by the masses.
Ending the Fed while maintaining Federal income taxes just means the Fed will be replaced with another entity that prints dollars. You just don't get the connection between the two as the original post that you responded to pointed out. You're going to have to leave some socialist crap behind if you want to truly see the light.
"Every king that ever lived despised regulation and being told what to do by the masses."
Inane and totally backwards statements like this make me think you are hopeless and a waste of time.
I'm sorry, but you really need to expand your reading list. We The People (socialist by your definition, I guess) do not need a consortium of private bankers in order to levy taxes or issue currency. Get out of the box provided to you for thought by the powers that be and take a breath of fresh air, would you?