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Rich Guys Vote To Extend Tax Cuts For Rich, Laughter Trickles Down to Middle Class
The market continued to move sideways today as economic data was less
relevant than Bernie Madoff's thoughts on the CAPM and fund managers
don't want to rock the boat (though they'll happily tickle the little
man inside of it) this close to year end bonuses. This lack of
volatility in the market is less surprising than John Boehner crying over a paper cut (or a tax cut) or finding out that old men still want sex (and you really needed to do a study to for that?).
The big news of the day was that the Senate passed the tax cut plan
ensuring the "spend and don't tax" policies of George W. Bush will
continue to bankrupt this country for generations to come. It is the
Government's ultimate fuck you to anyone who still believes in the
Ricardian equivalence proposition or the mathematical concept of
compounding.
The bill extends all of the tax cuts that were enacted in
2001 and 2003 for another two years (until they will be extended again
so Wall Street traders who make billions of dollars by hitting a button
won't ever have to downgrade from their daily diet of five unicorn
fetuses to only four) and it extends expanded unemployment insurance
benefits through 2011 (so the unemployed can eat for another few months
while employers tell them their skills have become more obsolete than
rotary phones, penny-farthings, and full bush). The compromise will
also cut payroll taxes by 2% (which might stimulate hiring if margins
weren't going down like Gayle King at Oprah Winfrey's house) and will
allow businesses to write off 100% of capital investments until 2011
which means executive suites will all soon be redone with neorests, rockstars, and Ashley Dupre.
At this rate, Wesley Snipes will be let out of jail early, and not for
good behavior, but rather for paying too much in taxes over the past 10
years. But party on, politicians, party on.
In macro news, both the core and actual CPI rose by .1%, slightly below analyst guesses of .2% and completely irrelevant to anything. Industrial output rose by .4%
which was its biggest gain since July as a spike in utilities partly
offset a 6% decline in the production of motor vehicles and a 15%
reduction in hope. Finally, applications for home loans fell last week
as mortgage rates rose to 7 week highs and people still don't have any
fucking money to waste on expensive declining assets (which is terrible
news for Elizabeth Taylor's vagina).
The only other bit of interesting US market news was that the inconceivable Lloyd Blankfein and his fellow warlords are slated to get $111MM in bonuses
from this year and 2007 as a reward for destroying the economy but
having enough political pull to stay afloat. Wow. And who said only
massages have happy endings? Blankfein will net $24.3MM by himself
which he promises to put towards world peace, making sure all of Camille Crimson's classes (probably NSFW) at the Learning Annex are free, and developing a vaccine for iocaine powder. Just kidding, he's probably going to put it all in a pile in the middle of his bedroom and dance naked around it as he wildly cackles at the robbery he got away with in front of everyone's eyes. Damn it feels good to be a Banksta.
Internationally, fears of European defaults are once again rising
(though it's unclear why they ever sank) as Moody's said they are
putting their credit rating of Spain on review for a possible downgrade.
While this would have more credibility if Moody's hadn't both missed
the biggest global financial meltdown in 80 years and also been
complicit in it, it was enough to spook the markets (and Money McBags
means spook in the literal sense, so don't go all Coleman Silk on him).
This news, coupled with violent worker strikes in Greece
(and Money McBags would have coupled that news with a nice Chianti, and
not worker strikes, but whatever), sent the Euro down and once again
made people realize that like RuPaul, Europe's banking system may be
hiding something underneath.
In the market, Goldman and Nomura cut EPS guesses for Morgan Stanley
from "made-up" to "made-up and shitty." Joy global was up~7% after a better than expected Q
which saw profits rise 18% as the CEO said they "simply dug the fuck
out of some more shit." Elsewhere, Honeywell fell a bit after they gave
below guesses 2011 earnings guidance
even though profits are supposed to rise 17% to 24% thanks to the
production of huge cockpits. And finally, Best Buy continued to get
pounded as this is one dip investors refuse to buy (and this is another dip investors refuse to buy).
For more, Money McBags puts the "fun" and the "mental" in fundamental analysis today by looking at RICK's Q on the award winning When Genius Prevailed.
Editors Note: As the next 2.5 weeks promise to be
duller than amish porn or a Henry James novel (and Money McBags still
hasn’t forgiven Mr. James for the 4ish hours of his life he wasted
reading The Bostonians which had all of the action, intrigue,
and humor of a shriveled taint hair), Money McBags may struggle a bit
to make this shit interesting. He could just post pictures of Rosie Jones, fabricate stories like other great media outlets,
or simply try to write in only rhyming iambic pentameter (Today
nothing went on in the market, news was lighter than a tiny ant’s shit)
but those are all gimmicks and you all know Money McBags is
cockposterously against gimmicks and all for originality. So bear with
Money McBags for the next few weeks as he navigates the dulldrums
(misspelling intended) of the end of the year, and tries to continue to
take the market from boring and stuffy, to boring and slightly less
stuffy.
»
The tax debate is false. Few if any "good" jobs will be created, and the many possible $10/hour jobs that are created will only entice more debt-accumulation by the middle class and poor:
http://www.xtranormal.com/watch/8092315/
Understood Mr. McBags. The mundane of your Holiday posts likely will match the tone of my trades. This market needs a roadrunner blast under its sorry butt!
Ugh, when will people realize that EARNED INCOME taxes hurt the middle class more than the "rich", as if anyone should pay over a third of their income in taxes to begin with. A guy making 250k in salary and paying half to the government is not "rich" when he is using the remaining half to pay on a mortgage, provide health insurance for four people, and college tuition for the kids - he is decidedly middle class - maybe he is rich relative to people in Asia or Africa, but not relative to the actual rich in our society. Warren Buffet was once quoted as saying that he pays a lower tax rate than his employees.
We will be Greece,Ireland....Before long our debt to gdp will surpase 100% and when we cant fund our debt then it will all come crashing down. I hope Ron Paul can get something done as it pertains to the FED but it will be very hard for one man. It is truly disgusting in this country how all OUR jobs are overseas, until they come back to this country we will never be able to build a middle class again,we will be a third world country the rich the poor and nothing in between
wealth seems to be pouring up, instead of trickling down. The American people have been brainwashed.
.
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If indeed the US wages a financial war, tax cuts provides some really efficient troopers with more ammo. These tax cut extensions might be added to the pool to attack other sovereign debts, stuff rich people are more likely to be in than middle class or poor people.
Thinking that this move is made to help somehow what people call the real economy (never understood why) through trickling down or something like that only commit people who want to believe this kind of propaganda.
Man, the puppets are really lifelike in the political kabuki theater, aren't they?
That link to Camille Crimson's classes, is a real DOOZY! ;-0
Glad to see you back, MM. I would have included some fava beans with the chianti in Greece but then that's just me. Take off for the holidays if you must but don't have any "sex by surprise" in Sweden.
Great commentary. You are the "Onion" of the financial blog-o-sphere. And like an onion your layers of wit are so deep they make me both laugh and cry.
Money McBags, I have been waiting for you. I am just a Colombian woman that has to use an alias here but please know that I think you are a very funny, sexy man with not enough of women like me. I was soooo sad when you announced that you were taking a small break since you have given me so much good press (and I know you would like to press me in more places so calm down). Keep up the good work and keep me laughing! That is the real way to a smart woman's heart.
Julia (really Sofia)
Look, ponzinomics is wrong and is ruining our country, but the solution isn't to take more of the wealthy. The only money the gov't (or you, the taxpayer) MAY have a right to is the bailed out banks and companies. Look, the rich find ways around most of these taxes anyways. Tax revenue could possibly even go down if Bush tax cuts for rich expire... the problem with this deal is increase in spending money we don't have. I love Zero Hedge - but this whining about "tax cuts for the rich" is just political theater. The real problem has nothing to do with the marginal tax rates of people earning 250k per year. So stop asking for socialism to solve our problems of socialism.
but this whining about "tax cuts for the rich" is just political theater. The real problem has nothing to do with the marginal tax rates of people earning 250k per year.
+1000
we got 2 or more wars goin on right now, we got a budget that spends about 30% more than it takes in, we got a national debt that is the size of the gdp, but hey, let's party on and cut taxes 2%. what's coming is called a 'rude awakening' mister iamse7en.
Not disputing you, but wake us all up if or when the US Govt actually CUTS SPENDING (or even makes some "intelligent" noises about doing so!)
If a guy keeps spending 30% more than he earns then the last thing you wanna do is to give him any more money to spend and expect he'd magically make ends meet somehow, which is why raising tax is such a brain dead nutty idea. They've done the easy cutting tax part. That's good. Now it's the cutting spending that requires real governing skills.