White House

Although no one can be sure of Buffett's motives, it would be naïve to believe that someone as intelligent as Buffett has not considered the benefits of pushing through this tax structure. Higher taxes are always problems for entrepreneurs and regular people in the economy. However, they're often beneficial to the well-connected, who receive government bailouts and favors. And with Buffett even on the president's lips, he is becoming more connected to the power mechanism in D.C. every day. With many of Berkshire's companies, your loss as a taxpayer will be their gains.

These January jobs numbers make the Obama administration look good, at least relative to how it’s looked in the previous 12 months. However, they’re not reflecting as positively on two of Obama’s primary support groups: Wall Street and the US Federal Reserve.

• BOJ Adds to Monetary Easing After Contraction (Bloomberg)
• EU to punish Spain for deficits, inaction (Reuters)
• Obama, China's Xi to tread cautiously in White House talks (Reuters)
• Global suicide 2020: We can’t feed 10 billion (MarketWatch)
• Greece rushes to meet lender demands (Reuters)
• Obama Budget Sets Up Election-Year Tax Fight (Reuters)
• Foreign Outcry Over ‘Volcker Rule’ Plans (FT)
• Moody’s Shifts Outlook for UK and France (FT)
• France to Push On With Trading Tax (FT)

Even Greek politicians scored higher.

We take a quick look at Obama's 2013 budget here, but there are a few other items to leave you with this evening.

On Friday, we gave the skinny on some of the more amusing and/or aggressive key assumptions in the president's 2013 budget. Now hear the TOTUS, as presented via the president.

While we have excoriated the unemployable, C-grade, goalseeking, manipulative excel hacks at the CBO on more than one occasion by now (see here, here and here), it appears this time it is the administration itself which has shown that when it comes to predicting the future, only "pledging" Greece is potentially worse than the CBO. WSJ reports that "President Barack Obama's budget request to Congress on Monday will forecast a deficit of $1.33 trillion in fiscal year 2012 and will include hundreds of billions of dollars of proposed infrastructure spending, according to draft documents viewed by Dow Jones Newswires and The Wall Street Journal. The projected deficit is higher than the $1.296 trillion deficit in 2011 and also slightly higher than a roughly $1.15 trillion projection released by the Congressional Budget Office last week. The budget, according to the documents, will forecast a $901 billion deficit for fiscal 2013, which would be equivalent to 5.5% of gross domestic product. That is up from the administration's September forecast of a deficit of $833 billion, or 5.1% of GDP." Where does the CBO see the 2013 budget (deficit of course): -$585 billion, or a 35% delta from the impartial CBO! In other words between 2012 and 2013 the difference between the CBO and Obama's own numbers will be a total of $542 billion. That's $542 billion more debt than the CBO, Treasury and TBAC predict will be needed. In other words while we already know that the total debt by the end of 2012 will be about $16.4 trillion (and likely more, we just use the next debt target, pardon debt ceiling as a referenece point), this means that by the end of 2013, total US debt will be at least $17.4 trillion. Assuming that US 2011 GDP of $15.1 trillion grows by the consensus forecast 2% in 2012 and 3% in 2013, it means that by the end of next year GDP will be $15.8 trillion, or a debt-to-GDP ratio of 110%. Half way from where we are now, to where Italy was yesterday. And of course, both the real final deficit and Debt to GDP will be far, far worse, but that's irrelevant.

Did Pelosi and Bachus draw straws about who was going to be subject to a congressional ethics investiation based on their insider trading?

So Now Is The Time To Get Your Financial Priorities In Order

• Greeks Struggle to Resolve Their Differences (WSJ)
• China May See Deeper Slowdown on Crisis: IMF (Bloomberg)
• Banks to take a hit on US home loans (FT)
• Europe’s banks face challenge on capital (FT)
• Smaller Interest-Rate, Credit-Default Swap Trades Seen On Horizon  (WSJ)
• Pro-European elected Finland president (FT)
• Push Sputters for Credit-Default Swap Futures (WSJ)
• China Money Rate Rises as Central Bank Gauges Demand for Bills (Bloomberg)
• China Takes On Skeptics of Aid to Euro Zone (WSJ)

While Marc Faber shares the usual stock of insightful market commentary, together with timing inflection points, and extended thoughts in the attached Bloomberg TV clip, it is the fact that he has officially joined Bill Gross, and so many others, in supporting the candidacy of Ron Paul as president. It is rather sad that only those who see beyond the surface of the current pyramid scheme facade, are bold enough to endorse the only man who is right for the White House. Fast forward to 15 minutes into the video to hear Marc Faber: "Ron Paul would be a very good president."

All you need to read.

Because the last time the administration got involved in the car space the results were so positive (for the unions if not so much for creditors), it appears we may be approaching another episode where central planning will make the decisions in the US auto space. Only this time instead of creditors, the impaired party will be China. Reuters reports: "Midwestern U.S. lawmakers and union groups on Tuesday urged President Barack Obama to restrict imports of auto parts from China that they said benefited from massive illegal subsidies and threatened hundreds of thousands of American jobs. "We need to stand up to the bully on the block," U.S. Senator Debbie Stabenow, a Michigan Democrat, said, referring to Beijing. "The bully on the block continues to take our lunch money and we need to stop that," she said." Odd - China was not complaining when the Obama administration was providing massive subsidies (whether or not illegal remains to be seen  - surely Holder is all over it) to the solar and other "green" industries. In other words, just like Solyndra and Ener1, who are merely the first of many artificially subsidized entities, provided such great if highly transitory results for US employment, let's recreate the experiment at the wholesale level, by implicit subsidies and while also angering America's biggest creditor. Something tells us this proposal has a definite probability of passing. In the meantime, central planning for everyone.

• Victory for Merkel Over Fiscal Treaty (FT)
• Everyone wants a mediterranean colony: China's NDRC Delegation Visit Greece to Boost Economic Ties (Xinhua)
• As Florida votes, Romney seems in driver's seat (Reuters)
• Greece’s Papademos Seek On Debt Deal by End of Week (Reuters)
• Banks Set to Double Crisis Loans From ECB (FT) - as Zero Hedge predicted two weeks ago
• S&P: Doubling Sales Tax Won’t Help Japan Enough (Bloomberg)
• Toshiba cuts outlook after Q3 profit tumbles (Reuters)
• Blackrock’s Doll says Fed’s QE3 is Unlikely, In Contrast to Pimco’s Gross (Bloomberg)

And like that, this year's Davos World Economic Forum has come and gone, having achieved nothing except allowing a bunch of representatives of the status quo to feel even more self-righteous and important in the world's biggest annual circle jerk, in which fawning journalists ask the questions their cue cards demand, knowing too well their jobs are on the line if they ask anything even remotely provocative (and with the price of admission in the tens of thousands of dollars, one wonders just how many Excel classes these "journalists" could have taken as an alternative, in order to actually do some original math-based research, yes, shocking concept, to present to their readers instead of merely regurgitating others' talking points). Bloomberg TV has compiled the best video summary of the highly irrelevant soundbites by economists, CEOs and other people of transitory power, who provide absolutely no original insight into anything, and in which ironically it is Mexico's Felipe Calderon who summarizes it best: "we have a timebomb the bomb is in Europe and we are working together to deactivate it before it explodes over all of us." Lastly, we provide a quick glimpse into current and previous guests of Davos to show just how utterly worthless is the "braintrust" of those present.