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The Most Important Chart You've Never Seen: Tax Receipts Top-Tick The Stock Market
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
This time is always different just before a bone-crushing decline.
This may well be the most important chart you've never seen. Courtesy of longtime analyst-correspondent B.C., this chart reveals that real per capita tax receipts have reliably top-ticked the stock market since 1973.
Note that this is specifically real (i.e. adjusted for inflation) state and local income tax and sales tax receipts--not federal tax receipts--and that the chart show annualized changes smoothed over three different time frames: seven quarters, 6 years and 9 years.
Anyone who sold stocks once the 6-year annualized change in real local/state tax receipts started declining would have been spared the horrendous, bone-crushing losses of the Bear markets that subsequently shredded stocks.
This indicator even worked reliably to identify Bear market rallies that briefly boosted tax receipts before rolling over: the stock market rally of 1975 to 1977 reversed the annualized decline in tax receipts but when tax receipts rolled over in 1977, that was a reliable top-tick of a market that subsequently fell 25%.
The annualized 6-year change nailed the top of the market in 1989, 2000, 2008--and now, in 2015. This leaves current bulls with the task of explaining why an indicator that has reliably top-ticked every previous market top for over 40 years is suddenly and magically wrong in 2015.
This time is always different just before a bone-crushing decline.
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Most important chart since Lehman.
Bone crushing sounds scary like death cross, Hindenburg omen, blood on the streets, boom, doom, gloom, yadda yadda yadda. Until the money changers are whipped out of the temple there will never be a fair or honorable market, economy, or government.
maybe that's what they meant by "full spectrum dominance" - when there's no more 'rule of law', anything goes
The charts mean absolutly nothing anymore BTFD when you can get one cause untill the fat fingers are broken and the ink runs out we will not see a correction or a crash. Something in this waiting for the math to add up feels like a sucker in waiting. Ntill the NWO is established and the cows come home and chickers start to roost its a maket stright to the moon and beyond. We had the correction it lasted 2 months and all is good so raise interest rates so us suckers can pay more on our debt and the middle class can end I say Fuck us up the ass dry!
and at the same time, just another meaningless chart (ie, the most important meaningless chart)
When California's suddenly swimming in money despite nonstop reckless spending, that really backs up this theory. More trains to nowhere, please.
Is Al Franken afraid of Donald Trump?http://tinyurl.com/n9armhd
Everytime I visit Cali, I see more and more hypocrites.
Do you think we have any chance in a state so locked up that during the re-election campaign da 'Gov didn't bother. Instead he spent his war chest promoting two massive bonds. Since the FSA is stacked with "undocumented" voters, every one passes. So after receiving a windfall from the latest .com boom good 'ol Jerry Brown gives it all away to any one who has managed to make it across the border. Never mind the roads and infrastructure is collapsing, we can just pass a new road tax, another train bond to blast a tunnel through the San Gabriel mountains, and to pay for those inevitable cost overruns. But Jerry is not finished with us yet, because we still have a quarter or two in our pockets. Coming up is another 60 Billion dollar boondoggle to build a tunnel in the Delta to ship even more water south, because we all know how well that's working out for the Colorado River.
so all those little points on the chart on the way up are what? When you are will to print money for the 1%...charts are meaningless?
if the rules were the same now in 2015 as they were in 2008, 2000, etc, then yes, you could say its a reliable indicator - but riddle me this batman: are the rules the same? (ie, did $1Trillion+ per month of hidden QE exist previously to band-aid over whatever started bleeding?)
bone crushing declines- right up there with dragons.
It's different this time ...........
So, no overlay of 'the market' to make the point?
Who needs tax reciepts when you can just conjure money out of nothing with no real collateral requirement?
tick tock motherfuckers...
I think as we go through a hyperinflation the stock market will soar, just like it has in countless other places. The only thing crashing will be liberty.
They want you to sell.....
Its different due to central planning. None of the past indicators work. None of the classic stock valuation methods work. The best we can hope for is hedged positions. Buy Toyota, short GM sort of investing. If they both crash, hopefully one crashes more than the othe .
Its different due to central planning. None of the past indicators work. None of the classic stock valuation methods work. The best we can hope for is hedged positions. Buy Toyota, short GM sort of investing. If they both crash, hopefully one crashes more than the othe .
First time QE has entered the equation. This market is not trading on economic fundamentals, just money flow from the central banks.
There's the key. It's flows, not B/S level, that is determining the market level. So the FED has to keep the river running, somehow - even by stealth. When the river becomes a stream, and then a trickle, it all dries up but the FED is still stuck with all those POS securities on its balance sheet, and no one to buy them.
While not stated by the CHS, the outcome of this chart is not that a crash is in the making (although it is), but more that this large tax inflow is thru capital gains on equity sales. Even though government revenue thru taxation is up, it's NOT because of GDP growth and more jobs but because the f-ing capital markets have been gamed to go up-up-up. Remember how a few years ago all of the states were either bankrupt or going bankrupt, and now all of a sudden they are all in the black? This is why.
In 2009 the Obama admin and the feds gamed the system and drove the markets up in order to save people's 401Ks and to foster voter sympathy for the crap they were going to pull. That led to continued gaming of the system in order to increase tax revenues to save the states (CA and NY, mainly). All of these governors taking credit for pulling their states out of crisis have not actually done anything, and all states will head back in to the crapper as soon as the markets return to some form of balance (or, following Hugh Hendrey, IF they ever return to balance).
House price stabilization and property tax escalation has helped states.
Then present whatever evidence you have to the State of Illinois so the lottery winners can get paid.
Is Shemitah still in play ?
I saw an interview with Andrew Maguire on King Whorled News and he sez there is a
"Coming Historic event that is about to shock the world and the gold market."
Not so important chart because we have the FED now.
adjusted for inflation
Uhm, according to which inflation numbers?
OK so the 6-year is up parabolic but the longer 9-year and 7 QA up mild to flat. what am i missing about the magical 6-year? anyone?
agree w/ the CB commentary, so long as QE in the air, everywhere, wassup?