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Senate Blocks Middle Class Tax Cut Extension, As Treasury Will Soon Need To Issue Yet More Trillions In Bonds To Fund Revenue Shortfall (Which Fed Will Monetize)

Tyler Durden's picture





 

The recent passage of the middle class tax cut extension by Congress was roundly refuted by the Senate today as republicans and even some democrats voted against the proposal. This was expected, and means the bluff will come down to the wire, with some form of compromise required in the next week, involving an unemployment insurance-for-tax cut extension quid pro quo. It better come quick though: as Zero Hedge has been saying for the past 4 months, the biggest overhang on the market currently is the threat that the capital gains extension does not pass forcing a sell off as those in profitable position rush to lock in profits at lower rates (which is priced in to assume it will happen). This was finally made all too clear in a recent Strategas report that gained prominent recognition a few days ago. However, instead of this issue requiring resolution by the end of the month, the D-Day is actually December 15, at which point numerous option expiration/rolling decisions are made, impacting asset decisions on the underlying securities.  As to the tax cut extension, it is now more than obvious that Obama will be forced to soon renege on some of his key campaign promises, thereby making his presidential bid in 2012 even more of a non-starter, but more importantly, requiring the Treasury to fund even more government revenue shortfalls through bond printing, thereby making a new QE round (this time focusing on the 30 Year) all but guaranteed.

More  from Reuters:

The two Democratic plans to renew low tax rates for individual income up to $200,000 and up to $1 million both failed in procedural votes, as Republicans argued that low tax rates for the wealthiest should also be extended.

No Republicans backed the Democratic proposals, and a few Democrats voted against them.

President Barack Obama expressed disappointment on Saturday and said negotiators needed to "redouble" their efforts in the next few days to reach an agreement on the tax cuts. He said doing so "will require some compromise."

The rare Saturday votes were expected to fail, but Democrats wanted to show that they didn't support an extension of the lower rates for higher-income individuals.

"It's not that we want to punish wealthy people," said Democratic Senator Charles Schumer, who had proposed extending the tax rates for those earning up to $1 million. "But they are doing fine and they are not going to spend the money and stimulate the economy."

Ultimately, today's vote was nothing but more theater:

Senate Republican leader Mitch McConnell after the vote said he was "relatively confident" that bipartisan talks would lead to an across-the-board renewal of the tax cuts and that the only unknown was the length of the extension.

Republicans also said the votes were a waste of time.

"The American people don't want a political dog and pony show," Republican Senator Charles Grassley said. "The bottom line is this: Stop the tax hikes."

And here is how the quid pro quo will look, making it inevitable that not only will the Treasury have to issue an addition several hundred billion in Bonds to fill the revenue deficiency, but that the Fed will have to step up its QE to further monetize the balance, an issue we will get some additional color on tomorrow when the Inkjet Chancellor speaks on 60 Minutes:

Obama's top economic advisers are in talks with key lawmakers on a potential deal that could renew all the lower rates, including those for the wealthiest, for one to three years, according to congressional aides.

In return, Democrats are demanding a one-year renewal of jobless benefits for hundreds of thousands of Americans. The benefits began to expire this week when lawmakers failed to agree on an extension.

In other words, the government continues to rely on the expectation that borrowing trillions from the future to fund shortfalls now will continue without a glitch. However, if rates continue rising as they have in the recent week, this assumption will be very much challenged as this next Reuters report discusses in detail.

The slope of the Treasury yield curve steepened in the week just ended, a week of volatile trading, observed Ward McCarthy, chief financial economist and managing director in the fixed-income division of Jefferies & Co. in New York.

"With supply on the horizon, a distinct lack of market liquidity and real money accounts still looking to lighten positions into year-end, rates appear to be headed higher in the weeks immediately ahead," he said.

The Treasury will sell $29 billion in three-month bills and $28 billion in six-month bills on Monday. It will sell $32 billion in three-year notes on Tuesday and $21 billion and $13 billion in re-opened 10- and 30-year securities, on Wednesday and Thursday, respectively.

At the same time the shadow cast by a weaker-than-forecast November U.S. employment report should make any upward move in rates a modest one, they said.

Benchmark U.S. 10-year yields hovered above 3 percent on Friday and seemed destined to do so in the weeks to come.

Bottom line: the Fed better hope it can rein in the 30 Year: for now it is starting to lose control, which is why we expect that when Bernanke announce the specifics of the next next QE iteration, purchases in the 30 Year sector will be prominelty featured.

 


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Sat, 12/04/2010 - 14:48 | Link to Comment liberal sodomy
liberal sodomy's picture

Why bother paying taxes?  Just have the bernank drop off tons of judfetzen in front of every City Hall.

Sun, 12/05/2010 - 10:13 | Link to Comment boooyaaaah
boooyaaaah's picture

Paying taxes
Deciding what tax revenue will go where
Deciding where to cut taxes
Where to increase taxes

Then how to spends tax revenue

And deciding which Pol you agree with as far as spending and taxing

These are the activities of a free people.

We Americans are no longer free

We do not decide how our money is spent.

Our taxes are but a pittance when you consider
Deficit spending, and printing and lying government programs like Obama care.

Don't bother me about trivial matters such as tax cuts for the taxpayer

Sun, 12/05/2010 - 11:45 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Ok, we (individual folks) will plan our expenditures accordingly.

Sat, 12/04/2010 - 14:58 | Link to Comment midtowng
midtowng's picture

Gotta protect those millionaires at all cost. Especially when so many of the Senators are also millionaires.

Sun, 12/05/2010 - 01:03 | Link to Comment monoloco
monoloco's picture

They should let the tax cuts expire and not extend benefits, that is what we deserve for voting in the clowns who thought we could have two very expensive wars and all kinds of wasteful spending while extending giant tax cuts. Maybe if we actually have to start paying for this crap we will pay a little attention the next time we go to the polls.

Sun, 12/05/2010 - 11:14 | Link to Comment Dr. Acula
Dr. Acula's picture

>They should let the tax cuts expire

So you're advocating more theft, i.e. more intervention, bigger government, and more economic distortions?

LMAO.

Mon, 12/06/2010 - 13:50 | Link to Comment jmc8888
jmc8888's picture

?

It's not theft, it's consent.  As a free man you can consent to taxes.

Bigger gov't.  Yes.  We need MUCH bigger gov't in some areas, MUCH smaller in others.  But alltogether, yes it would be a net increase.  Because it's not about a stupid retarded sophistric 'bigger gov't vs smaller gov't' idea.

Anyone that espouses it's bigger vs. smaller is a FUCKING DUMBASS

Economic distortions are what the tax CUTS did.  Cutting from 90 percent to 36 percent in a consistent fashion was ONE 40 YEAR LONG DISTORTION CALLED REAGANOMICS.

That's what is so funny.  It's not some welfare distortion.  It's a SUPPLY SIDE DISTORTION.  Perpetual tax cuts, deregulating, outsourcing, etc, etc.

People need to get their heads out of their asses.  This country had some of its best economics times, when the highest tax rate was 90+ percent, not 36.  THOSE ARE THE FACTS.  DEAL WITH THEM.

 

Sun, 12/05/2010 - 11:16 | Link to Comment Dr. Acula
Dr. Acula's picture

Communist logic: "not stealing someone's earned wealth" = "protecting someone at all cost"

 

Sat, 12/04/2010 - 15:06 | Link to Comment 6 String
6 String's picture

This is the great point for all those to understand in the post title, including the likes of Hugh Hendry which was surprised by QE2: Treasury Will Soon Need To Issue Yet More Trillions In Bonds To Fund Revenue Shortfall (Which Fed Will Monetize).

That hits the provibial nail on the head. Going forward, given the finite of money to fund our deficits, the Federal Reserve will have no choice to QE or not to QE. Debt monetization will simply be required because Congress is not going to cut 1 trillion plus in spending, anytime soon.

Here's the question, not rhetorical, how can the Federal Reserve have an exit strategy when it is unfunded deficits that need to be monetized? Since they are the buyer of last and only resort, how in the world do the ever exit tonto?

 

 

Sat, 12/04/2010 - 15:56 | Link to Comment Dismal Scientist
Dismal Scientist's picture

They don't. Game over. America is destined for years of relative underperformance.

Sun, 12/05/2010 - 05:11 | Link to Comment Thanatos
Thanatos's picture

Crapo and Coburn admit we are RIGHT NOW going down in flames.

They warn that the Fereal Government will be soon forced to make changes that will be very painful, difficult and damaging in many ways to every American.

They offer up some weak ass solutions (Tax Reform etc.) that will never fly past congress.

It's an official admission from the Government as far as I am concerned. We are going down soon (short term).

Politicians never say shit like this unless they know it's going to happen and they want to be seen as "working against" whatever caused it.

I have seen a million speeches by a million polys, this one isn't much different. They couch the key terms in their "fluffy" solutions so they don't look like they are just bringing bad news. But the key terms they use are what got my attention.

National Survival

Extreme Suffering

Short Term

Dollar Collapse

Unwinding of the Nation

Scared to Death

See for yourself:

http://www.c-span.org/Watch/Media/2010/12/02/HP/A/41425/Sen+Crapo+RID+Se...

Sat, 12/04/2010 - 16:03 | Link to Comment Monetary Lapse ...
Monetary Lapse of Reason's picture

"Here's the question, not rhetorical, how can the Federal Reserve have an exit strategy when it is unfunded deficits that need to be monetized? Since they are the buyer of last and only resort, how in the world do the ever exit tonto?"

 

That is exactly the question... I cannot imagine any exit strategy that does not bring about a painful step function increase in interest rates across the curve... QE to infinity is the only possible outcome here.  PM's and miners to the moon. 

Sat, 12/04/2010 - 21:58 | Link to Comment Kina
Kina's picture

I think they have an infinite supply of mastercards, each to pay off the other.

Sat, 12/04/2010 - 22:12 | Link to Comment ahamer
ahamer's picture

  + 1, QE to infinity

Sat, 12/04/2010 - 15:08 | Link to Comment dizzyfingers
dizzyfingers's picture

Looks like this is IT!

Monday's marketing opening ought to be interesting.

 

 

Sat, 12/04/2010 - 15:13 | Link to Comment cosmictrainwreck
cosmictrainwreck's picture

nah - they'll go thru another few iterations, go back & forth with House, etc. You know those pricks can't get a decision on anything. But, pretty sure they will be forced to before, say, Dec 24?

Sat, 12/04/2010 - 15:27 | Link to Comment Phineas Gage
Phineas Gage's picture

All just posturing.  The tax cuts get extended for EVERYONE, UI gets extended and a yet-unannounced stimulus gets supported.

Mark it.

Sat, 12/04/2010 - 15:48 | Link to Comment mikla
mikla's picture

IMHO, you're both right.

It's Schrodinger's Cat.  Do you have *any* idea how hard it is to get good help these days?

Just look at late-night TV ... the supra-genius Mob Boss, surrounded by idiots.  The plan would have gone *great* if he simply wasn't surrounded by idiots.

Remember, these are politicians.  Yes, you made a down-payment on them.  However, they are idiots, and don't always follow your instructions.  Or, they are doing the best they can to follow your instructions, but they are idiots, and totally mis-understood your intent.  What are the odds they actually deliver *every* time?

So, we've *passed* and *not passed* these rate extensions.  And, you'll get Armageddon either way.

Sucks to be the mob boss surrounded by idiots.

Sat, 12/04/2010 - 17:47 | Link to Comment Phineas Gage
Phineas Gage's picture

" However, they are idiots, and don't always follow your instructions."

This is true.  I would add that the problems are insolvable anyway.  Any "plan" is just hope disguised as an idea.  This is true of the politicians, Geithner, the Bernank - the whole lot.  I've read comments regarding some master plan.  There is none.  It's all postpone and hope.  Luck is the only thing that will save us.

Sat, 12/04/2010 - 15:10 | Link to Comment gwar5
gwar5's picture

Tax rates vs tax revenues = two different things. Keep rates low.

Cut spending, stop socializing bank losses. Let them fail.

Send signal we are pro-business, pro-jobs, and free markets are still alive.

Unelected Fed behavior is pro-central bank, not pro-people. Gird your loins.

The only thing that should be TBTF is self government. Ask Ireland.

Sat, 12/04/2010 - 15:35 | Link to Comment A Nanny Moose
A Nanny Moose's picture

The only thing that should be TBTF is self government.

 

I think I understand what you are trying to say, but nothing is TBTF. Failure is the best regulation, and is just about the only real regulation.

Sat, 12/04/2010 - 15:10 | Link to Comment Catullus
Catullus's picture

Bullish for Gold and Silver .

Sat, 12/04/2010 - 15:12 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

1)  Keep the Bush tax cuts

2)  Cut .gov spending even more to make it up

Or else:

QE to infinity.  Best buy some gold.

Sat, 12/04/2010 - 15:24 | Link to Comment the grateful un...
the grateful unemployed's picture

1 and 2 are opposing policies, if you keep the tax cuts, cutting government spending reduces revenue, and further reduces government spending, and GDP. my thought was that when Dems took hold of the bloated and corrupt budget process, DOD labels everything a black contract, millions go missing, there was no way they could rein in the spending. the only solution would be to cap spending, and then use their majority to fund programs which were more economically productive and built up the social safety net. Pelosi promised PayGo, she promised to run the lobbyists out of Washington, and now she is gone, and Obama will follow her. Republicans for their part would like to extend the tax cuts and INCREASE spending, this has been their policy for three decades or more.  Other than a few years under Reagan it hasn't worked. tough choices

Sat, 12/04/2010 - 18:07 | Link to Comment dark pools of soros
dark pools of soros's picture

they fight over few % of tax changes while the dollar drops 30...40%

so they have it rigged to make the stupid-wanna-be rich think they win

Sat, 12/04/2010 - 15:14 | Link to Comment MarketTruth
MarketTruth's picture

 "...it is now more than obvious that Obama will be forced to soon renege on some of his key campaign promises..."

Ummm... since when has the cult of personality puppet POTUS BHO kept a promise?

www.youtube.com/watch?v=UErR7i2onW0

Sat, 12/04/2010 - 15:26 | Link to Comment Bob
Bob's picture

Well put.  Great video as well.  The guy is either the Greatest Liar in History or the most abjectly incompetent POTUS ever (R or D.) 

Sometimes things really are that simple: It's one or the other. 

Sun, 12/05/2010 - 13:41 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

Why can't it be both?

Sat, 12/04/2010 - 15:18 | Link to Comment Gringo Viejo
Gringo Viejo's picture

There exist certain people that for whatever reason, seem fated to consistently make the wrong decision at the wrong time. Jim Mora, head coach of the New Orleans Saints during the 80s/90s comes to mind. Despite having the most talented, best performing team in the NFL for a number of years, Mora would fuck up and the Saints fans would be left to  wrenting of garments and gnashing of teeth. I've believe Mr. Mora has gone to Washington in a metaphorical sense. I believe Americans are totally fucked in a literal sense.

Sat, 12/04/2010 - 15:25 | Link to Comment Seasmoke
Seasmoke's picture

Playoffs , your talking playoffs !!!....Playoffs !!!

Sun, 12/05/2010 - 02:07 | Link to Comment Cursive
Cursive's picture

Coulda, woulda, shoulda.

Sat, 12/04/2010 - 15:29 | Link to Comment Bob
Bob's picture

Take a less than two minute long look at this:

www.youtube.com/watch?v=UErR7i2onW0

Luck had nothing to do with it. 

Sat, 12/04/2010 - 15:44 | Link to Comment theopco
theopco's picture

ouch

Sat, 12/04/2010 - 16:54 | Link to Comment cosmictrainwreck
cosmictrainwreck's picture

now, that is spooky..........

Sat, 12/04/2010 - 15:27 | Link to Comment oh_bama
oh_bama's picture

Hi guys

In the context of this limitless government spending and entitlements, and with gold and silver so high, I think maybe buying a piece of farm land (that produce ag products) is a reasonable idea.

What do you guys think?

many thanks!~

Sat, 12/04/2010 - 15:58 | Link to Comment cossack55
cossack55's picture

Nothing wrong with the concept.  A couple of notes:

Secure your water supplies

Pay attention to S510 (Senate bill - Food Safety)

Screw Monsanto B4 they kill you

Sat, 12/04/2010 - 16:08 | Link to Comment Lndmvr
Lndmvr's picture

Considering water. I have access to 160 acres my 96 yr old uncle farms. The ponds and streams on it have petroleum sheen and I'm sure pesticides and nitrates. If your buying farm land, Water purification ( a damn good still ) is advised. Plus some corn and potatoes equals something to drink and run the car on.

Sat, 12/04/2010 - 23:00 | Link to Comment the grateful un...
the grateful unemployed's picture

how did that work in GD1, not so well, but that's okay, everything that didn't work then should work now.

Sun, 12/05/2010 - 02:10 | Link to Comment Cursive
Cursive's picture

Where I'm from, most of the farmers did not recognize the Great Depression.  Life on the farm was relatively the same before and after.  Arable land is always good to have, if you can keep the taxman at bay.

Sat, 12/04/2010 - 15:37 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

There is one other critical thing that are in these negotiations.

They will try to tack on a Debt Ceiling increase, so they don't have to face the Tea Party folks and their refusal next month.

None of the rest of this legislation actually matters.  If the Debt Ceiling increase is stopped, then it all stops.

Sat, 12/04/2010 - 15:42 | Link to Comment linrom
linrom's picture

Just cut the taxes and increase the defense budget---even Democrats accept this as a recipe for economic growth now! They learned this from TV on Fox News and Larry Kudlow and Arthur Laffer(Laffer Curve) on CNBC

 

http://www.youtube.com/watch?v=plek41IdWD8

 

 

Sat, 12/04/2010 - 15:41 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Forget economic growth.  There will be no more of that.

CAP THE DEBT CEILING.  Do not increase it.  Period.

Everything else takes care of itself.  No more bond issuance for Bernanke to buy.  No more fiscal deficit.

There will be profound upheaval, but the game will end.  That's the best you can do.

Sun, 12/05/2010 - 14:54 | Link to Comment unununium
unununium's picture

No one audits the fed.  Who would know, if they added deposits to whomever and whatever's accounts?  Who's to say they are not doing it already.

Sat, 12/04/2010 - 15:50 | Link to Comment Atomizer
Atomizer's picture

The Federal Reserve is taking on a new job description.

Failure and lack of oversite during the banking crisis will be spun. New international bodies will oversee the monetary system

In the upcoming months, austerity will be sold to the
desperate serfs looking for work. Healthcare and the green initiative will become the told bedtime story, if you wish to seek work. Conform if you wish to work. Carrot and stick government approach. Taxpayer will front the entire program.

Sat, 12/04/2010 - 15:48 | Link to Comment DisparityFlux
DisparityFlux's picture

Let's see.

Tax cuts less filling to government, tastes great for business, so don't need to extend unemployment benefits and no more QE required.

Tax cuts expire more filling to government, tastes bad for business, so do need to extend unemployment benefits and more QE required.

When is the Super Bowl?  This debate would make a great commercial.

Sun, 12/05/2010 - 04:59 | Link to Comment StychoKiller
StychoKiller's picture

New advertising campaign for the Republicons:  "New Federal Govt Lite,
only half the size of the Old Federal Govt -- Less Taxing -- More Responsible!".
Oops, I forgot temporarily that the Republicons are the party of "Tax Less, Spend More." Darn it, the Decepticrats aren't any better though!
Their ad slogan appears to be:  "New Super-Sized Federal Govt, All the Bureaucracy of the Old Govt, with less Fiscal Sanity!"

Sat, 12/04/2010 - 15:46 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

There is no political or popular will to pursue even a moderate "scorched earth" economic policy to bring America to it's senses - Bernanke's fondness for QE is similar to Hitler's fondness for invading Russia, we all know how that one turned out.

Sat, 12/04/2010 - 16:30 | Link to Comment the grateful un...
the grateful unemployed's picture

HItler was obviously trying to prove Napoleon wrong. That's how it goes with megalomaniacs

Sat, 12/04/2010 - 15:48 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

You guys don't get it.

Nothing else matters upcoming but the Debt Ceiling. They are going to try to toss an increase into these negotiations.  

DON'T ALLOW IT.

All this other stuff becomes insignificant if the debt ceiling is not raised.  The deficit will go to 0 instantaneously and Ben will have no bonds issued to QE into.

THAT is all tht matters.  Cap the debt ceiling and watch the explosion, and then watch it right itself, to the extent it can, just a few months later.

Sat, 12/04/2010 - 16:03 | Link to Comment cossack55
cossack55's picture

Oh, we get it.  We (if I may speak for the other 124K ZHers) are just jaded, cynical realists who figure the chance of the empty suit crowd capping the debt is zilch.  These are the same bozos who allowed Hank to scare them into TARP.  Gutless swine. 

Sat, 12/04/2010 - 20:26 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

Couldn't have said it better.

Game is: vote today is a show vote by the Demoncrats simply to gather some free merde to throw, Rethuglicans, servants of the rich, will not go for anything other than a tax cut for their masters they service orally whenever possible, and the Dems are too gutless to simply say we can't afford this cut for the wealthiest Americans, whose greed knows no boundaries.  It's laughable that the tax extensions are somehow being billed as the source of funding for a recovery that hardly exists outside Wall Street. 

If you're not sure how the tax cuts affect the wealthy, read this:

http://www.nytimes.com/2010/08/11/us/politics/11tax.html

The real benefits of the extension are to the wealthiest among us, so the argument is really a disguised trickle-down theory, if the rich have more, they'll spend it on creating new businesses, buying shit etc. well, I say F_ _ _ THE RICH for once and ease the burden down the line in the middle class, and let those who received the real benefit of TARP and QE pay the tab this round.  Pricks. 

Sun, 12/05/2010 - 10:46 | Link to Comment chubbar
chubbar's picture

Well I'd say that none of you are talking about what needs discussion.

Once again they have the masses and MSM distracted and squabbling about tax cuts or UEI. Neither of which contributes a tinkers damn to the outcome of the ultimate crisis.

We need to have a national conversation about what is the nature of money and ultimately, what we should use as money? What kind of monetary system could we as sovereign nations, who trade amongst themselves, adopt that would serve to cap these "boom/bust" cycles and what the role of central banking should serve (or not serve) in this system?

Nothing, outside of solving these questions, will provide anything other than a temporary patch until the next crisis, all of which is a result (with the exception of the banking fraud) of the present monetary system.

The TPTB don't want you to think about these issues at all. They certainly want no public discussion on the merits of different alternative systems. They want their solution to have to be implemented immediately and without debate (TARP like) when the BIG crisis hits. Saving the masses from starvation will be the impetus.

Until we all agree to focus on this one issue, we'll all be distracted, divided and ultimately unsuccessful in saving ourselves from the Oligarchy consolidating their power. Which is how they've managed to gain their power to begin with.

Sat, 12/04/2010 - 15:55 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

Capping the debt is like asking a nymphomaniac not to have sex, not going to happen...

Sat, 12/04/2010 - 22:02 | Link to Comment Kina
Kina's picture

That has been my experience too. What to do?

Sun, 12/05/2010 - 05:02 | Link to Comment StychoKiller
StychoKiller's picture

"Please dear!  I swear that I'll NEVER touch a drop of liquor again:  please loan me $20."

Sat, 12/04/2010 - 16:33 | Link to Comment carbonmutant
carbonmutant's picture

QE dependent makets...

Remove the enabler

Sat, 12/04/2010 - 16:51 | Link to Comment the grateful un...
the grateful unemployed's picture

The CNN poll (the others are all over the place, which makes it tough on the sychophants) breaks it down three ways: extend the cuts just as they are 31%, extend but exclude tax cuts for everyone except the wealthy, 51%, or just let them all expire, 18%.

Now 51% doesn't look like much, except its quite a bit more than a blanket extension, in fact 20% of the people (51%) who want to target wealthy people, don't think the tax cuts should continue in their present form, that's 2/3s as many as those who prefer the cuts in the present form. (you could spin that thusly, consider that the first two are really the same set, all those who want to extend tax cuts in some form, which is 31%, and those who want to extend but not to the wealthy are the other 20%) the total set is 31% + 18% who do not want to extend, so if we can talk about percents in notional form that's 48%, and 20% is less than half.)

if there are other polls which are better,  it would be interesting to consider them, as the politicians live and breathe these things. 

 

Sat, 12/04/2010 - 16:56 | Link to Comment max2205
max2205's picture

Huh. Is BHO going to take a BM and GTFO?! But Hillary is quitting public service after Sec State.

Sun, 12/05/2010 - 05:03 | Link to Comment StychoKiller
StychoKiller's picture

Perhaps Hillary is planning on becoming a Military Governor of Afghanistan...

Sat, 12/04/2010 - 16:59 | Link to Comment Dr. No
Dr. No's picture

The Congress/Senate are reactionary bodies.  Extending the cuts is preemptive and therefore congress will not extend them.  There is more polical bang for the buck when dealing with issues in progress rather than prevent them.  Look for congress not to extend (cuts and benefits), then in January make them retroactive.  There is no politiclal advnatage for preemptive action now, especially with this lame duck session.  Both the dems and repubs want his session to end so they can deal with it next session when the political scene is different.

 

Sat, 12/04/2010 - 18:34 | Link to Comment SwingForce
SwingForce's picture

Ace Ventura: Warning. Assholes are closer than they appear.

Sat, 12/04/2010 - 20:26 | Link to Comment notadouche
notadouche's picture

Schummer stating that millionaires don't need the tax break as they won't spend the money anyway thus they won't stimulate the economy hence they don't need the tax break has got to be the most ignorant statements I've ever heard.  Not being a millionaire I guess I can only speak from a common sense standpoint as opposed to direct knowledge but I believe it's the millionaires that that employ the doormen, the contractors and builders to add on or buy houses, buy new cars, clothing, boats etc...Or they actually have businesses that employ regular folk.   Schummer, the millionaire congressman, needs to understand one concept.  When millionaires feel poor, the poor starve.  When they feel flush, the poor make money.   It's not that hard of a concept to grasp, really.

Sun, 12/05/2010 - 05:06 | Link to Comment StychoKiller
StychoKiller's picture

Shroomer HAS to talk his book for the Progressive idjuts he "represents" in NY.

Sat, 12/04/2010 - 20:28 | Link to Comment notadouche
notadouche's picture

How can the poor have tax cuts extended when they don't pay income taxes to begin with?

Sat, 12/04/2010 - 20:29 | Link to Comment Why Not
Why Not's picture

Regardless of whether the Bush tax cuts are extended (or OBH tax hikes are delayed), tax receipts are going to fall hard in 2011. Wealthy tax payers, who account for a significant chunk of income and an even larger share of tax payments, have shifted income into 2010 from 2011. Ben is going to have to monetize a big shortfall next year unless China steps in.

Sat, 12/04/2010 - 20:51 | Link to Comment malek
malek's picture

Two insane groups compromising:

R: We agree to not cut spending, if you let us keep taxes low.

D: We agree to not raise taxes, if you let us spend more.

Sat, 12/04/2010 - 21:02 | Link to Comment Randall Cabot
Randall Cabot's picture

C'mon, you TV-watching boobs, learn some real history-if Hitler didn't invade Russia, Russia would have invaded Germany-and the rest of Europe too. In fact, they were damn close to doing just that when Operation Barbarossa was hurriedly begun. See the book Icebreaker by Suvorov.

Sun, 12/05/2010 - 05:09 | Link to Comment StychoKiller
StychoKiller's picture

You give Stalin WAAAY too much credit, he got rooked by Von-Ribbentrop and der Fuehrer, plain and simple.

Sat, 12/04/2010 - 21:28 | Link to Comment Wheatman
Wheatman's picture

Tyler, how much money have you lost going long on the 30 year? We are reaching a tipping point. Even if the Fed buys the 30 year it will still collapse. When that point is reached the end is near. I give it 12 months for complete systemmic meltdown. Do yourself a favor and short the Fu#$ out of the bond.

Sat, 12/04/2010 - 22:08 | Link to Comment Kina
Kina's picture

At that time I would want to be paid in gold or silver, not FRN. Better do contracts in equivalent oz gold.

Sat, 12/04/2010 - 21:28 | Link to Comment tom
tom's picture

Did Timmy somehow solve the withholding dilemma? Treasury is supposed to give instructions to employers on withholding, and lacking Congressional action at this late date on all the year-end sunsetting tax decreases, he might be forced to instruct employers to increase withholding.

Stalin surely had secret plans to attack Germany, but such types always have such plans for all their neighbors. The evidence is clear that Russian weren't at all prepared, either to attack or defend against Barbarossa. All the best scholars on Stalin believe he was genuinely surprised, because after all, it was a very stupid move on Hitler's part, as the Russians quite convincingly proved by capturing Berlin within four years.

Sat, 12/04/2010 - 21:38 | Link to Comment Randall Cabot
Sat, 12/04/2010 - 22:04 | Link to Comment tom
tom's picture

I've seen it. If you know anything about Russians, you know that they love off-beat theories and their standards of journalism and scholarship are not high.

And if you know anything about Germans, you know that they cannot play chess.

Just look at Merkel and her handling of the Euro crisis. What is she accomplishing with all this kicking the can down the road? She's setting up the EU and ECB for its own Stalingrad in at most a few years time.

Sat, 12/04/2010 - 23:26 | Link to Comment Randall Cabot
Randall Cabot's picture

OK, keep watching that TV and those Hollywood movies.

So Merkel is the only one kicking the can down the road?

 

 

 

Sat, 12/04/2010 - 23:14 | Link to Comment prophet
prophet's picture

The industry will gobble up every investor they can based on promulgating this kind of flawed reasoning per an earlier post.

#774022

Definitely one for the math department but the gist of it is something like what follows.Invested 100, now worth 160.  At 15% rate I pay 9 in taxes, net 51.  At 20% rate I pay 12 in taxes, net 48. Juice my 160 to 163.75 (a 2.34% gain (oh yea that gone done in the last two days didn't it)) and I pay 12.75 in taxes, net 51.

Not a factor for the informed investor, just a tool for the industry to try and move money. 

Sun, 12/05/2010 - 07:16 | Link to Comment vxpatel
vxpatel's picture

really timely article:

 

oldie but goodie:

 

Jan. 5, 2010, 5:47 p.m. EST

TrimTabs suggests government manipulated stocks

Analysts say government's financial rescues have fueled conspiracy theorie

 

http://www.marketwatch.com/story/fund-flows-firm-suggests-government-bou...

Sun, 12/05/2010 - 08:33 | Link to Comment thepigman
thepigman's picture

Question for ZH readers I often ponder.How can the PDs pump equities without it showing up in their value at risk? We know they've ramped... but if it isn't in VAR and they haven't handed the stuff off (which would assume some sort of huge never ending black pool of MORONS) where are those equities being held? They have to settle somewhere. (Or do they?) Where?

Sun, 12/05/2010 - 20:14 | Link to Comment Bear
Bear's picture

Thanks for the question ... I also would like to see where they exist.

Sun, 12/05/2010 - 09:42 | Link to Comment liberal sodomy
liberal sodomy's picture

Why are we paying to feed, house, school and jail generations of illegitimate black children (70+% born to single sows)?

The nba sucks now.

Sun, 12/05/2010 - 17:15 | Link to Comment RockyRacoon
RockyRacoon's picture

That's solving itself:  The don't eat the free school lunches unless they are nachos, they live in squalor (that's cheap), and they drop out from the schooling.  Problems solved?

Don't know much about sports so I guess you're on your own re NBA.

Is that good enough for you?  Bigot.

Sun, 12/05/2010 - 17:45 | Link to Comment liberal sodomy
liberal sodomy's picture

It's not solving itself at all and is an unspoken drain of resources.

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