<Click on chart for larger image> The Wall Street Journal – Peter Schiff: The Fantasy of a 91% Top Income Tax Rate A liberal article of faith that confiscatory taxes fed the postwar boom turns out to be an Edsel of an economic idea. In 1958, an 81% marginal tax rate applied to incomes above… Continue reading Who Paid A 91% Top Rate?
The Financial Times – Gillian Tett: Watch out for the second US cliffhanger Another week, another round of shadow boxing on the edge of America’s fiscal cliff. But as Washington and Wall Street nervously try to work out whether there will be a $600bn fiscal shock on December 31, there is a second potential “cliff”… Continue reading Another Cliff?
The Financial Times – Forget the fiscal cliff: buy America Every time I see a banner headline predicting the US is about to hurl itself over a fiscal cliff, I am more certain in my conviction: China may soon be the world’s largest economy, but now is the time to buy America. The power struggle… Continue reading The Case For America
The Wall Street Journal – Danger Lurks Inside the Bond Boom Amid Corporate-Borrowing Bonanza, Some Money Managers Warn of Little Room Left for Gains Investors have been flocking to buy bonds issued by top-rated companies, putting them on pace for a record year of debt raising in the U.S. But some of the biggest fund… Continue reading The Bond Boom
<Click on chart for larger image> Bloomberg.com – Bernanke Cliff Analogy Overstates Immediate Economic Harm The term “fiscal cliff,” the common phrase describing more than $600 billion of U.S. tax increases and spending cuts scheduled to take effect in January, is a catchy metaphor that imperfectly describes the economic reality. The aptness of the topographical… Continue reading Bernanke Speaks About The Fiscal Cliff
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Conference Call Presentation/Charts of the Week Audio [audio:https://www.biancoresearch.com/bianco/SubscriberArea/503842-651847.mp3|titles=Conference Call] Topics Covered This Week Include: The State Of The Economy Economic Growth In 2013 The Trend In Earnings Earnings Revenue Growth 2013 Drag From The Fiscal Cliff The Debt Ceiling – Three Weeks Away Policy Uncertainty Stock/Bond Relationship Stocks and Bonds Dealers Are Not Shorting Treasuries… Continue reading Conference Call Presentation/Charts of the Week
Bloomberg.com – Ezra Klein: The Misguided 18 Percent Budget Solution Since 1950, federal revenue has averaged about 18 percent of gross domestic product — 17.8 percent of GDP, to be exact. A neat bit of trivia, but who cares? Lots of people, it seems. Republicans on the House Budget Committee, in a news release titled… Continue reading The Historical Range Of Tax Revenues
The Financial Times – Meal ticket for commodity traders ends An old joke in the commodities world was that futures traders never took holidays between the fifth and ninth business days of each month. Why? Because that is when money tracking commodity indices sell expiring futures contracts and replace them with new ones. Front-running the… Continue reading Backwardation On Commodity Returns
Comment How much does Quantitative Easing (QE) matter for financial markets? This is a question investors have been asking themselves for years. To answer this, lets look at the markets in the United States, which is heavily engaged in QE, and China, which is not. The first chart below shows the People’s Bank of China’s… Continue reading Does QE Move Prices? US v. China
<Click on chart for larger image> The Wall Street Journal – Trying to Calculate the Cost of Uncertainty Economists sometimes belabor and measure what the rest of us find obvious. Take this assertion: When it’s unusually hard to tell where the economy and government policy are going, businesses will be reluctant to invest and hire.… Continue reading Policy Uncertainty
<Click on chart for larger image> Comment As the chart above shows, the US is only $32 billion away from the debt ceiling. What happens after that was detailed earlier this week. The Wall Street Journal – White House Unyielding on Debt Limit The White House hardened its position that Congress should raise the U.S.’s… Continue reading The Fiscal Cliff