Today, I actually have something to say so the market overview is going to be quick.
Asia
Nikkei => 7,568.42, +110.49, +1.48%
Hang Seng => 12,811.57, -83.37, -0.65%
Straits Times => 1,594.87, -22.57, -1.40%
Europe
FTSE => 3,830.09, -85.55, -2.18%
DAX => 3,843.74, -98.88, -2.51%
CAC => 2,702.48, -42.36, -1.54%
U.S.
Dow => 7,062.93, -119.15, -1.66%
Nasdaq => 1,377.84, -13.63, -0.98%
S&P => 735.09, -17.74, -2.36%
My portfolio:
AMD => $2.18, +0.09
AMD DG => $0.10, unchanged
F => $2.00, +0.02
HRP JZ => $1.50, unchanged
NLH JZ => $1.55, unchanged
NG => $2.86, -0.07
When President Obama revealed the initial steps taken by his economic budget committee, he addressed agriculture, energy, unemployment, benefits, taxes, industrial waste, health care, and education. That is a lot of information at one time. It definitely says a lot, but it also leaves out a lot. The only way to get that information is to actually sit by and read all that information and I am not one to do it. But I will give you my opinion.
The biggest pro that the media is failing to see, that I believe Pres. Obama wanted to get across is that his administration did hit the ground running. As mention above, a lot was addressed in a short a short address. However, that is also one of the biggest cons. Too much at one time.
In addition to there being too much at one time, it also, as has been the norm, failed to go into substantial detail about the positive moves that have already been taken. Sure, he mentioned an increase to the COBRA health care benefit, as well as the unemployment pay benefit, but beyond that Pres. Obama went into generalities about the other positives in his budget plan.
I believe there should have been more detail given about how his administration is promoting the development of the wind and solar energy industry. Pres. Obama failed to elaborate on how his administration is going to create jobs to fulfill the reforms to agriculture, health care, and education that he mentioned. By failing to elaborate on those programs, the word "cut" stood out more as a negative.
The cut to the tax deductions of those making more than $250K stood out as a negative, that all of the media personalities, took as an attack on them. That was all that was needed to get them on the offensive. Today, several media outlets, like CNBC and the New York Post, railed against this budget plan. Because they are the ones that are the means of disseminating the news to the masses, they are going to skew the information in their favor. They are going to focus on all of the possible negatives that could result.
The cut to the health care programs and educational programs that do not work, should have been reworded. Because of the wording, the health care sector took a hit and dragged the market down. A better way to have worded it would have been to say that "the funding of health care subsidies will be redistributed to more effective programs to create jobs for the American people", or that "the funding of failing programs will be added to the budget to accomplish the electronic medical record keeping program." Anything along those lines would have surely reduced the hemorrhage of the sector.
Two things that seem to be the biggest issue are the cutting of taxes and the closing of the loop wholes. Sweeping changes like that without explaining how that helps the economy only adds to the economic decline. The mentality of the "rich" is that if they can't reduce the money they pay in taxes by some sort of means, then where is the incentive not to hoard it? In order for the "rich" to feel comfortable letting go of the cash, tax deductions for doing so are needed. It would have been better to say that "the tax loop wholes that allow businesses to export jobs will be replaced with deductions for creating jobs in the U.S."
The need for the government to spend billions per project to stimulate the economy with a resulting price tag in the trillions is unnecessary. The private sectors are already equipped and innovative enough to do it on their own, they just need the incentive and capital to do it. Have all the project proposals that the senators and representatives want to accomplish put on a government website, where U.S. based businesses can read them and apply with their business plans and bids to do them. Let the incentive for them to do so be government funding, and tax deductions for hiring U.S. citizens and residents. Then lets see if you don't get bipartisanship in congress. I am confident that you will.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Friday, February 27, 2009
Wednesday, February 25, 2009
How do you figure that?
The following link is a video article on Yahoo! Finance where Aaron Task interviews Jon Najarian, President of OptionMonster.com.
Four Simple Steps to Resolve the Financial Crisis and Boost the Stock Market
In the above video article, Jon Najarian outlines three of his steps he thinks will boost the Stock Market and Aaron Task adds a forth one to the list. My opinion? A complete joke, except for maybe one.
1) Cut taxes by 10% across the board for corporations and individuals alike?
Ha! This is a good one! With such a budget deficit, how in the world is government suppose to function? Print more money? Devalue the US currency even more? And how exactly does that encourage other countries to buy our debt? It doesn't.
Cutting taxes is not the answer as so many want to preach. I understand that we want to get people to spend more, but that isn't the reason why they are holding on to the money they do have. It is the lack of job security.
How about this? Rewrite the tax rules. Supply scale able tax deductions for companies that higher US citizens and resident aliens. And add a temporary tax to anyone that imports any new people or outsources any new jobs out of the country, retroactive to January 1, 2009. Notice the concession there, I am not without compromise or compassion to grandfathering in people.
2) Raise the FDIC insurance limit to $1 million per account?
This is another joke. Jon mentions that the average American had his money spread across several accounts and with the financial situation pulled their money out. What numbers is he looking at. The average American barely has a $10,000 in their checking account much less $100,000 in any one account. The only ones that have remotely near that much in there account is the upper-middle class and the upper class. These account for less than a 25% of America.
The average American doesn't understand what FDIC insurance is or even trust it. That is why so many people lined up at banks to pull their money out and stuff it into there mattresses. Raising the FDIC insurance limit would only encourage a small amount of people to put their money back in banks if any at all.
3) Suspend mark-to-market accounting?
Good try! This seems like a good thing for the bank but it is a lousy thing for the tax payer. The banks screwed up. They should have to accept the debt they incurred. But a compromise can be reached. The bad bank idea isn't really that bad of an idea. It just needs a very rigid foundation.
My opinion is that the US government, after federally mandating a temporary moratorium on all foreclosures in process, should buy all of the bad real estate assets that the banks have at market value or the remaining principle value, whichever is least. And then supply a tax deduction to the banks for accepting their losses.
Then assign the government in which the real estate asset resides to auction it off. The capital from the auction then becomes assigned to the education and infrastructure budgets. See how cash can flow?
After all that is done, any remaining home mortgages on primary homes must be allowed to be refinanced at a fixed rate for the remaining principle regardless of the payment status of the borrower. Why not let up to date borrowers better their terms? And if the mortgage is backwards, any back ended interest is a loss to the bank. Another lump the banks should have to accept. But again, another tax deduction to the banks for accepting the loss.
Secondary homes? Well who needs one should be able to afford it. If you have one and can't afford it, you lose. Banks, put them on the auction block regularly until they are sold. Hire a rehabilitation professional to get them in selling condition. Nothing extravagant, just clean and presentable.
As far as regulations go, make it mandatory that the mortgage applicant be screened against the payment to be expected on the first month of the 6th year to determine if they can afford the mortgage instrument. That should prevent 5-1 ARMs from being sold to the majority of incapable borrowers. That mandatory tax records for the past two years.
If, after all this, some individuals still can not afford to stay in their homes, they probably shouldn't have been in them anyway. Those then also get seized by the US government for market value and distributed to the local government to auction off and the funds funneled into the education and infrastructure budgets.
4) Reinstate the uptick rule?
Now, since I don't short stocks or commodities directly, I didn't have a clue what this was. So I looked it up. Thank you Wikipedia. The uptick rule is a rule that pretty much states that a short trade has to be made at the next 'tick' higher than the last executed long sale or at market value if the last long sale was higher than it's previous long sale. At least that is how I understand it.
Well, Aaron Task came up with this one and he might have something here. If you think about it, without the uptick rule, shorters can do trades without restriction. And since the market can have unlimited gains but only a finite loss, resistance against profiting on loss is actually a good thing. It would help slow but definitely not stop the market decline. The financial sector needs to stabilize, people with a job need to feel secure, those that are looking for a job need to find one, and those with businesses need to be able to hire more from within the country. The only way to accomplish all of this is to uproot the problem in the financial sector, and provide the needed incentives to get credit and cash flowing correctly.
So, in conclusion, Jon Najarian is either a confused individual or someone with his own agenda. Considering he is president of OptionMonster.com, I lean towards the latter. But...
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Four Simple Steps to Resolve the Financial Crisis and Boost the Stock Market
In the above video article, Jon Najarian outlines three of his steps he thinks will boost the Stock Market and Aaron Task adds a forth one to the list. My opinion? A complete joke, except for maybe one.
1) Cut taxes by 10% across the board for corporations and individuals alike?
Ha! This is a good one! With such a budget deficit, how in the world is government suppose to function? Print more money? Devalue the US currency even more? And how exactly does that encourage other countries to buy our debt? It doesn't.
Cutting taxes is not the answer as so many want to preach. I understand that we want to get people to spend more, but that isn't the reason why they are holding on to the money they do have. It is the lack of job security.
How about this? Rewrite the tax rules. Supply scale able tax deductions for companies that higher US citizens and resident aliens. And add a temporary tax to anyone that imports any new people or outsources any new jobs out of the country, retroactive to January 1, 2009. Notice the concession there, I am not without compromise or compassion to grandfathering in people.
2) Raise the FDIC insurance limit to $1 million per account?
This is another joke. Jon mentions that the average American had his money spread across several accounts and with the financial situation pulled their money out. What numbers is he looking at. The average American barely has a $10,000 in their checking account much less $100,000 in any one account. The only ones that have remotely near that much in there account is the upper-middle class and the upper class. These account for less than a 25% of America.
The average American doesn't understand what FDIC insurance is or even trust it. That is why so many people lined up at banks to pull their money out and stuff it into there mattresses. Raising the FDIC insurance limit would only encourage a small amount of people to put their money back in banks if any at all.
3) Suspend mark-to-market accounting?
Good try! This seems like a good thing for the bank but it is a lousy thing for the tax payer. The banks screwed up. They should have to accept the debt they incurred. But a compromise can be reached. The bad bank idea isn't really that bad of an idea. It just needs a very rigid foundation.
My opinion is that the US government, after federally mandating a temporary moratorium on all foreclosures in process, should buy all of the bad real estate assets that the banks have at market value or the remaining principle value, whichever is least. And then supply a tax deduction to the banks for accepting their losses.
Then assign the government in which the real estate asset resides to auction it off. The capital from the auction then becomes assigned to the education and infrastructure budgets. See how cash can flow?
After all that is done, any remaining home mortgages on primary homes must be allowed to be refinanced at a fixed rate for the remaining principle regardless of the payment status of the borrower. Why not let up to date borrowers better their terms? And if the mortgage is backwards, any back ended interest is a loss to the bank. Another lump the banks should have to accept. But again, another tax deduction to the banks for accepting the loss.
Secondary homes? Well who needs one should be able to afford it. If you have one and can't afford it, you lose. Banks, put them on the auction block regularly until they are sold. Hire a rehabilitation professional to get them in selling condition. Nothing extravagant, just clean and presentable.
As far as regulations go, make it mandatory that the mortgage applicant be screened against the payment to be expected on the first month of the 6th year to determine if they can afford the mortgage instrument. That should prevent 5-1 ARMs from being sold to the majority of incapable borrowers. That mandatory tax records for the past two years.
If, after all this, some individuals still can not afford to stay in their homes, they probably shouldn't have been in them anyway. Those then also get seized by the US government for market value and distributed to the local government to auction off and the funds funneled into the education and infrastructure budgets.
4) Reinstate the uptick rule?
Now, since I don't short stocks or commodities directly, I didn't have a clue what this was. So I looked it up. Thank you Wikipedia. The uptick rule is a rule that pretty much states that a short trade has to be made at the next 'tick' higher than the last executed long sale or at market value if the last long sale was higher than it's previous long sale. At least that is how I understand it.
Well, Aaron Task came up with this one and he might have something here. If you think about it, without the uptick rule, shorters can do trades without restriction. And since the market can have unlimited gains but only a finite loss, resistance against profiting on loss is actually a good thing. It would help slow but definitely not stop the market decline. The financial sector needs to stabilize, people with a job need to feel secure, those that are looking for a job need to find one, and those with businesses need to be able to hire more from within the country. The only way to accomplish all of this is to uproot the problem in the financial sector, and provide the needed incentives to get credit and cash flowing correctly.
So, in conclusion, Jon Najarian is either a confused individual or someone with his own agenda. Considering he is president of OptionMonster.com, I lean towards the latter. But...
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
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