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Bloody September
Bloody September
Courtesy of Lee Adler of the Wall Street Examiner
The following paragraphs are free excerpts from today’s Wall Street Examiner Professional Edition Treasury update.
As I estimated last week, the Treasury needed more cash than originally scheduled, or originally forecast by the TBAC. It announced a big cash management bill on Monday, and another one on Thursday to be auctioned next week. That should be enough for now, but revenues appear to be going off a cliff, with declines in withholding taxes now at the point where withholding is down year to year in real terms. That’s after being up strongly in May. It suggests that the US “conomy” entered recession over the past couple of months. Meanwhile, while the evidence suggests that the conomy has already been in recession, mainstream conomist pundits continue to argue about whether the conomy will have a double dip or not. While they are trying to figure it out, the damage to the financial markets is fait accompli, and will get worse.
Month to date excise taxes as of August 31 were down by 10%, compared with virtually unchanged at the end of July. Part of this was due to the temporary expiration of the aviation excise tax from July 23 to August 5, when it was reinstated. Since the tax was again being collected since August 7, most of the decline in the tax does appear to be due to less driving, drinking, smoking, air travel, and firearms purchases, in other words, all the fun stuff, among other things. The data suggests that the economy fell off a cliff in August.
Corporate taxes were down 23%, month to date versus last year. This is a sharp deterioration from the year to year change at the end of July when it was only down 17%. Because these are estimations based on the most recent quarterly activity, they suggest weakening economic activity. However, we must note that July and August are not months when quarterly taxes are due. The last big collection month was June. September is the next.
This is scandalous considering the outsized corporate profit reports. We have a serious problem of corporate undertaxation in the US, and an even bigger perceptual problem thanks to the politicians who call for no new taxes on “job creators.” The problem with that little rhetorical flourish is that the truth is that they are job destroyers and job exporters. If they are creating jobs, they certainly are not in the US.
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[Soundtrack: Wake Me Up When September Ends.]
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maybe if Obama, the DOJ, SEC would go back and try to recoup the quadrillion or so in bonuses the banksters took from fraudulenet loans and the phony economy, let these evil banks fail, get rid of the fed and capitalize some new banks owned by Americans -then maybe we could start to get a grip on the problem. My blood boils every day when i think of these criminal banksters continuing to get their obscene bonuses, while millions of Americans are destitute and in great distress.
It’s clear that the banks aren’t much chastened by the foreclosure scandal that erupted last fall and which threatens to cost them tens of billions of dollars.
An American Banker investigation today shows that several banks are still fraudulently backdating documents to foreclose on homeowners. And it’s not the first to show this. Last month, an outstanding Reuters probe by Scot Paltrow (a former neighbor of mine and Dean Starkman’s at The Wall Street Journal) showed similar behavior (ADDING: The Associated Press had a similar piece earlier that day, as commenter JenniferM points out).
These stories raise serious questions for the Obama administration and states attorneys general led by Iowa’s Tom Miller who have been rushing to settle and release the banks from liability for fraud. How can you release folks who’ve repeatedly shown that they’ll ignore the law and even recent settlements promising they’ll obey it?
great article - the rest is at:
http://www.cjr.org/the_audit/the_foreclosure_scandal_contin.php
"The problem with that little rhetorical flourish is that the truth is that they are job destroyers and job exporters. If they are creating jobs, they certainly are not in the US."
Bingo!
The US is finished! Get used to it...
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"All of those taxes you want increased just end up coming out of our pockets due to price increases to pay them"
this is one of my all time favorite "myths" or sheoplisms that keep the population in check and the corporate profits rolling in!!!
I've been in self employed my entire adult life and I've NEVER been able to increase my prices based on the taxes i pay....and EVERY customer i have always complains that when input price rise they CAN'T pass that along to their customers.
so please, someone here at the hedge show me (use pretty pictures and graphs if you have to) how the ONLY thing that companies and corporations can pass along via higher prices is taxes.
the ONLY thing that effects my price levels is work load or job type AND over the last decade I've actually lowered prices every year. as a matter of fact 2011 is the first time I've raised my shop rate since 2000.....just sayin.
Corporations of any size THAT HAVE PRICING POWER, qualify for the pass-through. And that is EVERY corporation of size.
That or they lower the quantity you get for the same price. Now my toilet paper is even a half inch narrower, and my Hershey almond bar is an ounce less than it was last year.
Small companies that have a lot of competition are constrained from raising prices as you have written.
Self-employment is also constrained, and does not enter into the "Corporations pay no taxes" argument.
But that statement that corporations pass on their price increases (which includes tax increases) EVENTUALLY is still intact.
Glad to help.
Two words: Fair Tax. Read the book if you don't know how it works. Takes power away from the politicians and eliminates the IRS.
I guess that means you picked an unfortunate business. And you aren't greasing your CongressWhore or SenaCrook.
You take a 12 oz bag of (insert Big Ag crappy product here) that sells for $2.00 and turn it into a 10 oz bag of (insert Big Ag crappy product here) that sells for $2.25.
Just because YOU can't raise your prices doesn't mean others don't. Nothing personal. I can't raise prices either. Well, the exception is for rent of course.
Yes.
GE paid more taxes to Botswana last year than they did to the USA.
Anyone who thinks that is somehow right has a screw loose.
Yep! And Owe-bama's pal, Jeffy Immelt, will be building planes in China. That's when he's not chairing Owe-bama's American Competiveness and Jobs Committee while he's out-sourcing American jobs. Is this a great country or what? You can get paid by the taxpayer to help the taxpayer while screwing him mercilessly. Jeffy should be in Congress!
Exactly. Its okay though, Immelt makes sure Obama gets plenty of positive face time on multiple networks.
Your virulent comment implies that partisanship applies. Do you think party affiliation matters?
Did you not notice the MASSIVE off-shoring (don't call it out-sourcing which is entirely different and only displays your lack of knowledge on these subjects) during the Bush administration?
Here is a clue you need: both parties are fundamentally the same and do not represent the interests of most Americans.
And the problem with raising corporate taxes, is that the corporation does not pay them, we do! All of those taxes you want increased just end up coming out of our pockets due to price increases to pay them. So IMHO, when you say you want higher corporate taxes, your saying you want to pay more taxes. Go ahead and do so, the government will take all the voluntary taxes you want to give them. But when they raise the prices of their products, more folks will choose not to buy them, and then you end up with another company shutting their doors, and more unemployed folks.
But when it comes to companies like GE who make huge profits, and pay absolutely ZERO taxes, I find that appalling. I myself will do my best to never buy a GE product again until that situation is changed. How is it that they can escape paying probably millions of dollars in taxes, yet I cannot escape paying my little "contribution"? Its unethical to the NTH degree.
Why does everybody say that taxes are money lost? Taxes are spent, and go back into the ecomomy. It is not like the govt is sitting on a big pile of money! Govt has been stimulating the economy for 30 years by deficit spending. The profit from that debt that was injected into the world economy has been collected by the profitable businesses. Taxes are the way that govt. (read people) recirculate the money. That is the way it is. And it works.
It used to be in China that the rich accumulated all of the money, the people starved until they revolted, stormed the mansions and carted off the gold and jewels. In modern society we need to tax the bastards and redistribute the wealth. Don't get caught up in your arguments about fairness or freedom. It is a fact of history that eventually the smarties take from the less astute. But if you are interested in human rights and freedom why is it not important that EVERYONE have a decent life if they are willing to contribute to society? OH, "contribute to society"!! That is a commie idea!!
Get real. Reality bites.
gh
Been saying that for decades...
Precisement....
Exactly. It just hides the fact from the hoi poloi that they(we) pay for everything. That we are so ignorant that too few figure it out is shocking.
WTF? You acknowledge corporate taxes are paid by the customers, employees, and shareholders, then you come just short of calling people who advocate raising corporate taxes stupid, THEN rant that GE should pay corporate taxes?
Retarded to the Nth degree.
Stop with this circle jerk. This is circular logic at it's finest. Admittedly advanced by the beneficiaries for more than a generation I mean why bother laying it all out. It's a cliche. It's embarrasing to repeat this tripe isn't it?
Profits are at 10% of GDP far higher than they have ever been. And who do profits accrue to, the very top. Likewise it is estimated the amount of money going to workers out of the entire GDP pie globally is the lowest in history. We are not talking little cyclical swings here We are talking about historic levels. It might occur to some to consider that when there is an economic problem which is threatening to be historic that one should look at areas where historic norms are out of whack.
Most all of the world money not used for basic needs is held by a tiny few and this mountain of money, and it is a mountain because obvously money growth globally has been stupendous for a long time, is mostly trapped in the 'markets' and called investment. There is so much money seeking investment that interest rates over much of the globe is zero or below. Tens if not hundreds of trillions of dollars are now 'invested' at zero return. What the fuck kind of investment is that? Far far too much money is 'invested' instead of being actually used by people to live their lives.
The problem that you illustrate so well is a problem of money velocity and hoarding. Those that would spend it have very little and those that do, run asset Ponzi schemes like buying gold. This is what causes debt acceleration and eventual Minsky moment: wealth accumulation. Very few pay attention to it. Even great thinkers like Martin Armstrong call those that do--Marxists. Debt and wealth accumulations are two sides of the same coin. If you reduce wealth accumulation, you will reduce debt accumulation. Too bad that only few people seem to understand this.
Too bad that only few people seem to understand this.
------------------------------------------------------------------------
Or maybe "too bad that that many people seem to understand this and use it as their own benefit"
If corporate income ends up in the pockets of the fatcats, then why not just tax the fatcats? What is the point of corporate taxation when the money ends up flowing to the stockholders? Just tax the stockholders and you wipe out all those corporate taxes, loopholes and credits that help multinational corporations with 100 tax lawyers and hurt small businesses that can't afford to hire a team of lawyers.
Hey hey, you do not want to increase unemployment for tax lawyers do you? Sheesh. [sarc]
Because each fat cat is incorporated and pays himself only $1 - $100,000/year, Warren.
"we have a serious problem of corporate undertaxation"
Bubba we have a wee bit more problems than that. We have lived on a exponential debt growth funded by outsourcing production to low cost coutries and then using the financial markets as our main driver of income. That all works great until debt growth maxes out and the kondraktiff cycle turns to winter. Monitary and fiscal stimulus don't work when this happens and debt destuction is the only answer. There won't be higher tax receipts until the economy resets.
US corporate taxes are the second highest in the world and that loony thinks that they are undertaxed. The problem isn't the tax rates, but the loopholes that allow multinational companies like Google and GE to shift profits to overseas subsidiaries to avoid paying taxes while small and medium sized businesses end up paying much higher tax rates. If they cuts the corporate tax rate to 15% and get rid of all the loopholes and credits, then tax revenues would be much higher.
Shame on us Americans for not bending over and letting the gubmit raise our taxed to cover that $15 trillion in debt. Thats, the problem, not the fucking spending...........
Okay okay okay now I keep reading bloody september crashes busts troughs doomsday recessions and YET this QE3 defies all laws of physics and markets and ultimately continues to DISPROVE our (mine included) prognostications of teh great depression.
Pray tell how we can keep stating these our apocalyptic forecasts in the face of Bernank et. al fuckery?¿?¿¿¿¿¿
I think the continued wild gyrations (convulsions) in the market as well as the situation in Europe signal the end is close. Of course 'close' could be in 2 yrs or 2 months. Delay by govts will continue until it is obvious to even the most bloated coach potato that things are supremely fucked. Riots in the US will be the final signal...I expect to start seeing them quite soon in Europe.
"Wild gyrations" could just be the new normal.
It may be weeks, months, years decades that fluctuation becomes the status quo. Perhaps we are just too used to relative stability to ever conceive of a fiancial world that is in a constant state of flux?
I think the Powers can juggle a lot better than we give them 'credit' for. And for a hell of a lot longer than most realize.
The Fed will win and win until it loses.
Win what? Disconnecting value from citizen's savings. What prize does that earn? Fed destroys more hope than a dozen Medieval popes.
All Ponzis collapse. Be patient. Every day it doesn't is a gift. There's not 1% of us who's yet prepared for der Sturm.
Even Bernie Madoff admitted he was surprised how long he was able to get away with his Ponzi.
"...firearms purchases, in other words, all the fun stuff"
Americans lol
Yeah, noticed that here too!! Good grief. The problem isn't that the 2nd amendment confers a bizarre right that is antithetical to democratic society, it is that Americans see it as conferring a right to use those guns to shoot people!
In the Australian Air Force, pilots flying in the northenmost parts of the country carry sidearms in case they have to eject and may have to shoot a crocodile who's showing a little too much interest. In the Canadian forces fighter pilots carry side arms in case they have to shoot a polar bear that gets a little too interested after an ejection. On American commercial flights pilots also carry sidearms. They are for the purpose of shooting people who show a little too much interest in the pilots-no prior ejection required.
I think that 'bout sums up the 2nd amendment's reality.
Hey, Frenchy, I guess it figures you'd fly the Rainbow Coalition flag for an icon, but I think a white flag would be more appropriate
Hey Storm,
Not to worry, I've heard my fair share of French jokes over the years, my favourite being "The French ... they are always there when they need you lol"
Correct me if I'm wrong, but I believe that the US is one of the country where the access to firearms is the easiest and, from a European perspective at least, we find that attachment to the right to bear arms rather funny, if slightly misplaced, in the 21st century. After all, the % of firearms actually used to defend oneself (which I imagine was the original idea behind the 2nd Amendment) is extremely small. So it begs the question, if things in America are really as bad as it is portrayed at ZH, haven't those Americans spending such a chunk of their disposable income on firearms, got their priorities wrong?
That's all I was alluding to and had no interest in starting a slanging match. After all, I was a keen shooter myself until unfortunate incidents in Huntingdon & Dunblane + successive UK goverments took this pleasur away.
http://en.wikipedia.org/wiki/Hungerford_massacre
http://en.wikipedia.org/wiki/Dunblane_massacre
A quick study of the founding father's reason for creating the second amendment has always been for the sole purpose of protecting ourselves from a runaway government takeover. Kinda like we have now. Experts agree. Gun control works. http://www.motifake.com/the-experts-agree-demotivational-posters-64688.html
Mon Frere,
You miss the biggest reason that 'muricans love guns: the Toy value they possess.
Until you've actually taken an M16 in your little mitts, and fired a few hundred rounds at some innocuous target you have no idea what bon homie is.
Once you get hooked on buying guns, it's just a pleasure like any other hobby to collect them.
Don't you think it's kind of amazing that with over 200,000,000 guns in this country that Angelo Mozillo is still upright and breathing, that Bernie Madoff isn't moldering somewhere dark and deep, that Dickie Fuld isn't worm food, and Chris Cox is still drinking martinis before dinner instead of an exploding mass of gas?
I think it's significant that with 200,000,000 guns in the hands of the many sociopaths in this country that we aren't in the middle of a major revolution. I think it proves that while we have a buncha guns, the people behind them still have a great deal of common sense about what to do with them. They are in the end relatively useless, like collecting stamps.
d'rein, mon amie
Ya, kinda' like "redneck-golf" don't cha' know.
Probably harder to get a XX at 500 yardz than to get a hole in one.
'course that is the difference between the "Country Class" and the "Ruling Class."
And, well for our Frog: N'est ce pas?
- Ned
{but I doubt if he knows about "busting caps."}
{{nor about "getting capped"}}
{{{I wonder about the riots in gay Paree and Londinistan???}}}
Yes, they can bleed the common man indefinitely. Sadly, someone will likely be killed before it ends. If then.