Today's Examination Of Yesterday

Tyler Durden's picture

Via Mark J. Grant, author of Out of the Box,

“Until we can re-establish a condition under which the earnings of the people can be kept by the people, we are bound to suffer a very severe and distinct curtailment of our liberty.”

                    -Calvin Coolidge

I left yesterday for the bobbling heads. Those small dolls resident in the back of car windows that nod up and down as you go over every bump in the road. I left yesterday for the media spinners. Those that are paid to turn diamonds into lumps of clay and then back again by the glittering facets of their arguments. I left yesterday to the artists of verbiage that weave arguments of their own accomplishments much as the artists of Three Card Monty hide the truth behind their shells. I left all of that for yesterday so that today we could examine the reality of that which we have been presented.

Yesterday we had a nice rally in the equity markets. No surprise; the sigh of relief was palpable that Congress did something, anything to address our fall over the cliff. I would not get too excited however. We raised taxes, we penalized those succeeding and we did it in a meaningful manner. We did not cut the national debt as sung by the chorus across the airwaves. In fact, according to the Congressional Budget Office we decreased revenues by $3.6 trillion over ten years. We did not protect the middle class, but because of the expiration of the payroll tax decrease, Federal taxes will rise for 77% of all working Americans. Thus we rewarded non-working Americans at the expense of those with jobs. For those that are truly succeeding, making over one million dollars, we increased their taxes by $171,300.00 on average which becomes a disincentive to progress or a very good reason to explore tax avoidance and gimmickry. We still face “sequestration” in March and the “debt ceiling” in February and nothing was done to curtail our social and entitlement programs that cannot be afforded without even more debt and mountains of it regardless of all of the new taxes. The game was the continuation of postponement and avoidance and reckless governance of the nation.

The spin is that the increase in taxes on capital gains and dividends will rise from 15% to 20% (a 25% increase) but this is not accurate. Under the Affordable Care Act, which is in effect today, there is another 3.8% tax which raises taxes on capital gains and dividends to 23.8% which is a 37% total raise. So much for the value of appreciation and the value of dividends if you start out yards behind the eightball. Then you can feel very proud of our President and our Congress because they feathered the nests of so many peacocks in the process. GE’s tax bill was lowered along with several other companies with the $111.2 billion extension for off-shore financing. How about $78 million for Nascar, $248 million for films and TV programs in additional depreciation and $222 million in a special exemption for imported rum.

Unintended consequences

One of the unintended consequences of all of these new taxes may be a population shift in the United States. Many people in higher income states like CA, NJ, NY or CT will be paying well over 50% now between Federal taxes (39.6%), the rise in Social Security taxes (2.00%), the new Obamacare tax (3.8%) and the increase in Medicare taxes (1.45% to 2.35%). Add to this state income taxes and many people in those states will be paying 50-60% of their income in combined taxes. These are levels of taxes where not only disincentives come into play and where tax chicanery is multiplied but where people and possibly corporations will change locations based upon what the various governments take from their pocketbook.

The Best Bet

There was lots of talking about it and speculation was rampant but Municipal bonds were left alone in the new legislation. The major indices for Munis had declined around 3.5% prior to the new laws but yesterday, when long Treasuries were off 1.75 points, these same indices were up around one point. I have long suggested buying Municipals as many credits are cheaper than corresponding corporates on an apples to apples yield basis given the ratings. Forget the tax consequences; the absolute yields on many Municipal bonds are better than equally rated Corporate or Mortgage backed bonds. Municipals now represent the last large pocket, the last asset class of investments, where tax exemption may be found and this is now far more important than it was on he final day of the last year. I suggest getting in now because Muni’s will compress and keep compressing against Treasuries and there is very good value now to be found here.

“This country would not be a land of opportunity; America could not be America, if the people are shackled with government monopolies.”

                          -Calvin Coolidge

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Fredo Corleone's picture

Wednesday's action illustrated the fluid bounds between "relief rally" and short covering.

GCT's picture

Ivy I do not care who works and does not as long as I do not have to support them.  Thats the problem now the media glorifies being unemployed as the new norm and how to have a great lifestyle leeching off the productive.  What a fucked up world we are living in these days. 

We will all be employed by the government at some point in time.  After all the collective voted for this way of life.  They must first totally disarm the populice for this to happen. Once done NWA is complete.

IvyMike's picture

The real parasites are the self-styled "producers" who imagine they've led "progress."

"Our system of private property in land FORCES landless men to work for others; to work in factories, stores, and offices, whether they like it or not. Wherever access to land is free, men work only to provide what they actually need or desire. Wherever the white man has come in contact with savage cultures this fact becomes apparent. There is for savages in their native state no such sharp distinction between "work" and "not working" as clocks and factory whistles have accustomed the white man to accept. They cannot be made to work regularly at repetitive tasks in which they have no direct interest except by some sort of duress. Disestablishment from land, like slavery, is a form of DURESS. The white man, where slavery cannot be practiced, has found that he must first disestablish the savages from their land before he can force them to work steadily for him. Once they are disestablished, they are in effect starved into working for him and into working as he directs."

~Dr. Ralph Borsodi
This Ugly Civilization (1929, Simon and Schuster)

The parasites include Ayn Rand, who brazenly stated she had THE RIGHT TO TAKE.

"[The Native Americans] didn't have any rights to the land ... Any white person who brought the element of civilization had the right to take over this continent."

~Ayn Rand
US Military Academy at West Point, March 6, 1974

trav777's picture

The savages didn't have any land...they just occupied it from time to time.  Made no real use of it.

Unlike you, I like electricity and roads.

Civilizations yield to other civilizations; it is a part of the cycle of life.  Nobody owns the land, they only own what they can defend against someone else.

Fuck you and all you who are inimical to nature and evolution.

IvyMike's picture

Civilization = city-Statism.

If you're in love with Statist Society, so be it; civilization is definitely here to stay.

Yet the freedom of pre-civilized society is gone forever too; paleolithic society was one where people were, as these two references both state:

"autonomous and sovereign"

~Elman R. Service (1975), Origins of the State and Civilization: The Process of Cultural Evolution. New York: Norton. [Online excerpt here: NON-STATE AND STATE SOCIETIES]

"autonomous and sovereign"

~Christopher Boehm (1999), Hierarchy in the Forest: The Evolution of Egalitarian Behavior. Harvard University Press.

Enjoy your 'lectric, city-statist (civilizationist,) but it's a poor substitute for an autonomous and sovereign lifeway.

piceridu's picture

How anyone could give a down arrow for the above facts is beyond me. Whether you agree or not, it is simply the truth. 

Wage slavery is the white man's way.

SheepDog-One's picture

Just 'trade'? Hey whatcha got to trade there fella...some old bubblegum wrappers you say? OK I'll gives ya 2 wooden nickels fer 'em.

BLOTTO's picture

We are being ruled by scum that think* its their divine right to rule over us. Occult shit show.


They dont fuckin give a shit about the good of the people.


'They' follow sacred geometrey, numerology and astrology. Once you recognize the signs that they follow - it sticks out like a sore thumb...



Tsar Pointless's picture

What would you expect? Ever looked at how Washington D.C. is plotted? Or some of the names we have for cities around D.C. (Hint: Alexandria is one of them.)

Talk to your fellow citizens. Ask them about the sun and the heat. They'll love both of them, I'll bet you.

All of the co-workers with whom I've ever worked have. They are sun worshipers.

I tell them we're just like the ancient Egyptians in that sense, and marvel in the hazy glaze that glosses over their eyes.

odatruf's picture

Blotto - why wouldn't they think it was their divine right?

Reelection rates are normally above 95%. Having a certain family name nearly guarantees election no matter how dim you might be (I am looking at you Joe Kennedy the Third). There are no consequences for enacting stupid policy.

Given the above, why would you think anything other than that you were ordained to such luck?


BLOTTO's picture

I think it goes deeper than that my fellow ZedHeds...


We can't stop half-way down the lineage of just a few hundred years.

You need to go/get right to the beginning of the Mother of All Family Trees to discover who is ruling the show and why. And yes, thats easier said then done.


ALL the presidents have ties to the European blood lineages of importance.


Presidents are born, not elected.

Just with that alone - voting is futile.


IvyMike's picture

Divine right, you say?

What about your Divine Right to Property?

" account of those grants God made of the world to Adam, and to Noah, and his sons, it is very clear, that God, as king David says, Psal. cxv. 16. has given the earth to the children of men..."

~John Locke, Second Treatise, Of Property, 1689

"To date, however, no philosopher has ever successfully divorced Lockesian property rights from monotheism."

~Jason Godesky, The Right to Property, July 18, 2005

DosZap's picture

The game was the continuation of postponement and avoidance and reckless governance of the nation.


All predesigned to destroy the Republic.Nothing to see move along......................

duo's picture

It would be interesting to know how many of the $400K+ crowd are in finance, banking, or real estate.  I'd bet 80% or more.  Too bad we can't tax the earnings from fraud, I mean finance, at a different rate.

SheepDog-One's picture

Well BLOTTO technically anyone who celebrates Christmas and Easter and all the rest of the Christian 'holy-days' are sun worshippers as well. Thats all 'Christmas' is the winter sun solstice.

BLOTTO's picture

Well the majority of those people - have their hearts in the right place...they just dont realize whats going on.


Brilliant on 'their' part SD-1... have the masses celebrate occult/pagan festivals by giving it a 'good' story.

The biggest central figure to the kids on Christmas is not J.C., but rather Satan Santa Claus.


Yes, we are being governed by time and space on their part. The calendar rules us.

Whats next on the 'calendar'? Oh, thats right 'Ground Hog Day' or as the occultists know it as - Imbolc.


Imbolc was believed to be the day the Cailleach — the hag of Gaelic tradition — gathers her firewood for the rest of the winter. Legend has it that if she wishes to make the winter last a good while longer, she will make sure the weather on Imbolc is bright and sunny, so she can gather plenty of firewood. Therefore, people would be relieved if Imbolc is a day of foul weather, as it means the Cailleach is asleep and winter is almost over.

Blotts: That sounds exactly like GroundHog day and when the furry bastard comes out to see or not see his shadow.


Just give everything a cute name, and/or add a furry critter/fat pipe smoking man that loves kids - but has none of his own...and its just a fuckin circus on this planet. Lets go sit on his lap and take pictures and in 25 years from now wonder what the fuck is going on?


Yule = Christmas

Imbolc = GroundHog day

Ostara = yup, Easter

Beltane Day = May Day (popular holiday in Europe)

Midsummer = Summer Eq


Samhain = Halloween


Yet the masses sleep - no questions being asked. Society demands you participate or look nuts to the masses if you dont.




Tsar Pointless's picture

Oh shit!

The Dow is in the red! Please, quick - somebody, do SOMETHING!

For the love of the children and God and Amerikkka!

What is The Hedge's picture

......and the widows! Don't forget the widows!!!

Vagabond's picture

A rise from 15% to 20% is a 33% increase.  A rise from 15% to 23.8% is a 41.3% increase.

Schmuck Raker's picture

Thanks for mentioning it. I thought I was the only one.


otto skorzeny's picture

when you add in ALL taxes(real estate taxes,10% on anything you buy,utility taxes etc)-it is MUCH higher. also -you have to be crazy to pile into the muni bond market

1100-TACTICAL-12's picture

Man the pitchforks, enough is enough.

dirtyfiles's picture

pile of hidden taxes over the manipulated "look at stock market" sentiment

odatruf's picture

Mark - you must have missed the results this past November. Americans want to pay more tax, so I expect them to be moving into just those jurisdictions you claim they will be leaving.

Long CA, NY, MA, IL and CT.

I'm shorting NH!

GCT's picture

Oda Americans voted for people that are producing or make more money then they do to pay more tax.

fonzannoon's picture

I hope ZH can get Schiff radio show audio show somehow. He is stating that the US took Moody's to the woodshed and "got their mind right". No downgrades coming.

SheepDog-One's picture

'No downgrades' so thats actually BAD newz for stawks since all prior downgrades had a net result of about +10% for equities.

Jim in MN's picture

A few starting points:

1.  Note in all meetings and discussions involving business or finanacial planning that corruption is taking at least 1% off of GDP growth, and ensuring zero real returns on all major asset classes for the forseeable future.  Back up with good articles and citations such as Bill Gross (PIMCO), etc.


2.  Boycott the crap out of all DC/NY/TBTF institutions you can.  That means using local banks and credit unions.  Try to get your local churches, small businesses, friends and town government to do the same.


3.  Tell the truth.  Simply and at times with humor.


4.  Voting and politics are vile these days but it's worth trying to keep them viable.  Just ask about corruption a lot.


5.  If anyone cares, we should also close the NY offices of the Treasury and Federal Reserve, ban all contact between TARP recipients and any government/elected official, impose a lifetime ban on any TARP recipient employees or paid consultants/lawyers working in government, raid all HQ offices of TARP recipients, "temporarily" jail their executives, and mirror their hard drives on the Internet for public examination.  But, no one cares about actual policy.

Dapper Dan's picture

Dam good starting points Jim.

Especially #5,

 Why can’t we look at our congress persons company laptop or computer or their Emails, My boss has the right to look at my Emails and files that are on company supplied laptops and computers.


Shizzmoney's picture

5) If anyone cares, we should also close the NY offices of the Treasury and Federal Reserve, ban all contact between TARP recipients and any government/elected official, impose a lifetime ban on any TARP recipient employees or paid consultants/lawyers working in government, raid all HQ offices of TARP recipients, "temporarily" jail their executives, and mirror their hard drives on the Internet for public examination.  But, no one cares about actual policy.

The economy doesn't get fixed until THIS especially gets done.

Plus infinity on this post, Jim!

RiverRoad's picture

The middle class went over the cliff with a big silent scream.

odatruf's picture

Oh I don't think so. Lemmings don't scream. If we could see them, they'd be smiling and wondering what Dancing with the Stars* has in store this season.

* Is this still a viable punchline or is there a new craptastic show I should be using?

RiverRoad's picture

Wait'll they get their next paycheck.

Zer0head's picture

Today's examination of yesterday

remember yesterday when Rep King of NY ranted against Boner?

well today he has changed his tune

Rep. King: Boehner will keep gavel, made ‘right decision’ on Sandy aid


(I wonder what caused this 180?)

LawsofPhysics's picture

The real money masters lost control of the puppet's strings for just a second, it happens.   Move along...

NotApplicable's picture

Nah, factional in-fighting is just another facet of divide and conquer. Helps keep the facade shiny and legitimate looking.

Besides, he's starting his next campaign, ya know.

First There Is A Mountain's picture

Seeing my first tweets stating the Hugo Chavez is dead....FYI

TuesdayBen's picture

That leaves Castro and Obama to carry the cause Forward

mckee's picture

I don't know how you managed to get a down vote.... that's hilarious!

TuesdayBen's picture

Well, my tie is a bit short.

NoDebt's picture

Seeing my first Tweets that Obama will attend the funeral, weep openly and thank Hugo (he calls him "H-man" because they're buds) for all his support, guidance, friendship and sober counsel over the years.  He will call him a "great man" and a "true friend to the oppressed and down-trodden" as well as an "inspiration to world leaders everywhere" before pledging our nations full support to the people of Venezuela and jetting back home to face the praise and admiration of the main stream media for such a bold step forward in foreign policy.


DaveyJones's picture

that will teach him .... asking for delivery of his gold

flacon's picture

Did he take his 150 tons of gold to heaven with him? I would bed ten Fedreal Reserve Notes he thought he did.