Biderman Busts The 'Sustainable' Deficit Reduction Meme

Tyler Durden's picture

While Tepper and his breathless team-mates celebrate a 'sustainable' euphoria-inducing drop in the deficit that heralds the new America, TrimTabs CEO Charles Biderman upsets the bull's apple-cart by explaining the three one-off items that created this smaller deficit and implicitly show its unsustainability. In his usual fact-based exclamations, he reminds us "do not confuse higher tax payments for liftoff." The bullish twist, he notes reported in the popular press, is "deficit reduction must mean we are having an economic liftoff," and has become an overnight "feel-good phenomenon for those long stocks and needing news to justify their positions." Sustainable? "If only it were true...", as he enthralls, "this is a tale of three one-off items masking a slow-growth economy." Here are the facts...


For a start $61bn of the $140bn tax gains came from higher withheld income from the 135 million US workers. Only a very small percentage is a result of increase in wages and salaries; the bulk of this year's pop is due to higher tax rates not higher income.

Secondly, the bulk of the gains this year are from capital gains (which grew 30%) for assets sold last year into the fiscal cliff debacle;

And third, the FNM/FRE kickbacks - which are at best unsustainable and at worst become a drag in a higher rate environment...


Biderman explains...


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fonzannoon's picture

I wish biderman would just tell us he went long already so we know it's safe to actually short.

somecallmetimmah's picture

Use the time God has granted you to prepare.

the grateful unemployed's picture

if they taxed their POMO and QE operations they could pay off the deficit, 85B at say 28% is 2.5B a month?

Ham-bone's picture

OK - in the spirit of asking questions???

Public debt = '08 - $5.1 T .... '13 - 11.9 T --->$6.8T or approx 235% increase

Intragov debt = '08 - $4.08 T .... '13 - $4.86T --->$784B or approx 19% increase

Total outstanding debt = '08 - 9.21 T .... $16.765 T --->$7.5T or 182% increase

Anybody want to answer the question why the public has gone ballistic while the intra is relatively slow moving? ($3T Fed, $3T Japan / China?)

Cdad's picture

This "the deficit is falling" meme just out...really took some clowns in.  There was genuine excitement over at the BlowHorn [CNBC] about this issue, and it was aggressively touted as the New Recovery.  Of course, even the girl down at the Piggly Wiggly could poke holes in this nonsense...but desperate sell side guys on Wall Street...nope.  Hool line and sinker there.

Let's all turn to Cramer.  He'll know the true skinny...for sure.

NihilistZero's picture

Kind of off topic, but related to the deficit...

I'm not a conspiracy type but I've always wondered how an Ayn Rand follower like Greenspan became the crony capitalist, ultimate destructor of our fiat currency...

Could the Maestro prove to be a libertarian trojan horse???  The monetary system as we know it will be destroyed and you can trace it directly back to this man's actions starting in the 80's.  If the man is not an idiot and saw all this coming, you could frame him as quite the martyr for destroying the fiat system.

Just a thought...

prains's picture

there was a "flaw" in his model



junker: it's the line he used in the documentary "the flaw" watch it, you obviously need the help

Turin Turambar's picture

Maybe Greenspan looked in the mirror one day and realized that he's only mortal and has a limited amount of time in this life, so he figure'd if he couldn't beat them, he'd join them.  After all, in the long run, we're all dead.  :-O

lolmao500's picture

Why does he wastes his time explaining this since whoever still believes in the recovery doesn't have enough of an IQ to smell the bullshit from a nanometer away?? It's not like one more explanation will change their bag of shit that they call an opinion.

azengrcat's picture

I did not know Sausilto allowed citizenship to angry white men.  

fromthebleachers's picture

Isn't it Pacifica? Sausalito is a world away...

alangreedspank's picture

Don't think those who celebrates this want it to come from increased income: that would mean more inflation down the road which they don't want to deal with as it spells the end of QEs and POMO buys.

southerncomfort's picture

OT: alangreedspank -- your icon is HILARIOUS!  i volunteer w/ this elem grade running team after school once a week - run those kids for an hour.  The coach did the "puberty" lecture a couple weeks ago and they're ALL behaving like your icon trying to see if they're "there" yet.

Shevva's picture

No problem 'Exit could be 'bumpy', IMF study shows costs could be high' the collapse will just be bumpy so no worries taxes don't matter if it's just bumpy.

blindman's picture

can one print
in the face of
over printed print to cover
prior printed print
print and prance.
pony print a daisy chain
solar flare a plasma vein.
that is how u get the gold.
from the heart of creation
delivered to your
coffee and internet thriving.

stlouistrader's picture

Does anyone even listen to this guy anymore?  There ought to be a ZH ass clown of the year award.  Gotta believe Biederman is just slightly ahead of Faber.  

s2man's picture

Increased taxes:  That's an extra $61 Billion they have sucked out of the pockets of the earners.  I'm glad someone thinks that's good news.

WhiteNight123129's picture

Thanks for those number Mr. Biderman. Very detailed presentation of the facts.