The most effective economic stabilization provision of the bill was eliminated in the House-Senate conference. The $15,000 tax credit for any buyer of a home regardless of income or first time home buyer status has been replaced with an $8,000 credit for first time home buyers only. This credit expires at the end of this year. It is also limited by income: $75,000 single, $150,000 married.
The economy will not begin to heal until the housing decline is arrested. If the goal of this spending package is to revive the economy, why limit the credit to first time home buyers and have income limitations? People who have more money will be able to: A. Buy more expensive homes (the ones that are mostly being foreclosed) B. Qualify for a larger mortgage C. Have more incentive to invest in housing since their tax braket is higher.
The fact that this housing market stabilazation credit has been eliminated proves to me that this is just a 70's style entitlement porkfest.
The increase in the Earned Income Credit and the refundable child tax credit is purely an expansion of welfare. These are payments to people who don't pay any taxes since their income is too low. In addition to a full refund of any taxes witheld, thousands of additional dollars are paid in most cases, a classic liberal wealth transfer-Lou
Here are some of the highlights of the stimulus bill just passed by Congress:
FOR WORKERS, CONSUMERS AND RETIREES
* Creates a "making work pay" refundable tax credit championed by President Barack Obama of up to $400 per individual and $800 for a couple in 2009 and 2010. It is calculated at a rate of 6.2 percent of earned income and is phased out for individuals with adjusted incomes over $75,000 and couples with incomes over $150,000.
* Provides a one-time payment of $250 to Social Security beneficiaries, railroad retirees and veterans receiving benefits from the Veterans Affairs department. State government retirees not eligible for Social Security would also get the $250 payment.
* Increases the earned income tax credit for low-income workers with
three or more children.
* Expands eligibility for the refundable child tax credit to more low-income workers. The bill reduces the income floor to $3,000 in 2009 and 2010 from the current floor of $8,500.
* Provides a new $2,500 tax credit for college education expenses. The credit phases out for individuals earning more than $80,000 and couples with incomes over $160,000.
* Provides an $8,000 tax credit for first-time home buyers for homes purchased between Jan. 1 and Dec. 1, 2009. The tax credit phases out for individuals earning more than $75,000 and couples earning more than $150,000.
* Provides temporary relief from the alternative minimum tax for millions of middle-class taxpayers who otherwise would be ensnared by the tax originally meant for the very wealthy.
Saturday, February 14, 2009
Congress passes huge economic stimulus package
I'm amazed that an $800,000,000,000 spending bill can be voted on without anyone getting to read the final version. Given only three Republicans in the Senate and none in the House voted with the majority, this is a solely on the shoulders of the Democrats. If it fails to stimulate the economy or is percieved as a wasteful givaway, the Democrats will pay a heavy political price. Let's hope it performs as advertised.-LouCongress passes huge economic stimulus package
WASHINGTON (MarketWatch) - With support from just three Republicans, the Democratic majorities in both the House and the Senate approved Friday a sprawling, $787 billion economic stimulus package backed by President Barack Obama, handing the new president a major victory on his top economic priority.
The huge package contains billions of dollars in infrastructure spending and assistance to states and the unemployed, and a $400 tax cut for individuals that Obama promoted during his run for the White House. Obama said the tax cuts and spending increases should create or save 3.5 million jobs and help lift the economy from one of the worst recessions in generations.
Read Article Here:
http://www.marketwatch.com/news/story/Congress-passes-huge-economic-stimulus/story.aspx?guid=%7BD95D7A93%2D5C78%2D446D%2DA813%2DA08081CBA92F%7D
FDIC shutters four banks in one day
The number of Friday night bank failures is beginning to accelerate. Already 13 banks have failed in 2009. I expect over 300 banks to fail this year.-Lou
FDIC shutters four banks in one day
Oregon, Nebraska, Florida, Illinois bank failures bring year's total to 13
By John Letzing, MarketWatch
SAN FRANCISCO (MarketWatch) -- Loup City, Neb.-based Sherman County Bank, Cape Coral, Fla.-based Riverside Bank of the Gulf Coast, Pittsfield, Ill.-based Corn Belt Bank and Trust Company, and Beaverton, Ore.-based Pinnacle Bank were closed by regulators Friday, bringing the number of U.S. bank failures for 2009 to 13 and 38 total since the start of the credit crisis, the Federal Deposit Insurance Corp. said.
Nebraska has not seen a bank failure since 1990, according to the FDIC. However, Riverside Bank follows Fla.-based Ocala National Bank, which failed on Jan. 30. Prior to Corn Belt Bank, the last Illinois bank to fail was National Bank of Commerce on Jan. 16.
Read Article Here:
Friday, February 13, 2009
Fraud probe into UK firm's role in collapse of world's largest insurer AIG
These creeps are the reason we are in the state we are.-Lou
Fraud probe into UK firm's role in collapse of world's largest insurer AIG
A fraud investigation was launched last night into a UK firm’s alleged criminal involvement in the multi-billion-pound collapse of the world’s largest insurer.
The probe by the Serious Fraud Office into AIG Financial Products will focus on those with ‘inside knowledge’ of the collapse.
Investigators will try to establish how it lost almost £8billion and brought its American parent, AIG, to its knees.
The downfall of AIG, now 80 per cent owned by the U.S. government, was one of the pivotal events in the start of the global financial crisis.
Read Article Here:
http://www.dailymail.co.uk/news/article-1143740/Fraud-probe-UK-firms-role-collapse-worlds-largest-insurer-AIG.html
Stimulus Bill to Floor Friday Without Public Disclosure
Doesn't the American public (as well as the opposition party) have the right to examine a $ trillion spending bill before it is voted on in Congress? How can a Congressman vote on a 700 page bill without knowing what's in it? Why the rush? What's hidden in the bill that they don't want us to see?-Lou
SURPRISE! Dems Break Promise: Stimulus Bill to Floor Friday
In a press conference Thursday, the House Republican leadership spoke candidly about being kept out of the House-Senate conference on the Obama-Pelosi-Reid so-called “economic stimulus” bill. They confirmed they had not yet seen the text of the bill as of 4 p.m.Minority Leader John Boehner (R-Ohio) said he was unsure how many Democrats would vote with Republicans again on this bill but that he thought Republicans “may get a few” Democrats to side with them.
The fact that the Demos have now broken their promise to have the public able to see the bill for 48 hours may drive more Dems into the Republican camp.
“[I] don’t know, ‘cause they haven’t seen the bill either,” Boehner said.
Read Article Here:
Large U.S. banks on edge of insolvency, experts say
This from a London newspaper.-Lou
Large U.S. banks on edge of insolvency, experts say
Some of the large banks in the United States, according to economists and other finance experts, are like dead men walking.
A sober assessment of the growing mountain of losses from bad bets, measured in today's marketplace, would overwhelm the value of the banks' assets, they say. The banks, in their view, are insolvent.
None of the experts' research focuses on individual banks, and there are certainly exceptions among the 50 largest banks in the country. Nor do consumers and businesses need to fret about their deposits, which are insured by the U.S. government. And even banks that might technically be insolvent can continue operating for a long time, and could recover their financial health when the economy improves.
Read Article Here:
http://www.iht.com/articles/2009/02/13/business/13insolvent.php
Large U.S. banks on edge of insolvency, experts say
Some of the large banks in the United States, according to economists and other finance experts, are like dead men walking.
A sober assessment of the growing mountain of losses from bad bets, measured in today's marketplace, would overwhelm the value of the banks' assets, they say. The banks, in their view, are insolvent.
None of the experts' research focuses on individual banks, and there are certainly exceptions among the 50 largest banks in the country. Nor do consumers and businesses need to fret about their deposits, which are insured by the U.S. government. And even banks that might technically be insolvent can continue operating for a long time, and could recover their financial health when the economy improves.
Read Article Here:
http://www.iht.com/articles/2009/02/13/business/13insolvent.php
Geithner's Bank Plan Led To Hasty Goldman Meeting
This story hit CNBC in the mid afternoon causing the stock market to plunge. Goldman first denied the story.-Lou
Geithner's Bank Plan Led To Hasty Goldman Meeting
How worried was Wall Street about a lack clarity in Treasury Secretary Tim Geithner's plan to save the banking system through the purchase of toxic debt? So worried that Goldman Sachs called a meeting to figure out how to fix the problem.
This meeting known as the "Goldman Sachs rountable" took place just hours after Geithner's speech (and the dismal market reaction) on Tuesday at the headquarters of Goldman Sachs in lower Manhattan.
Around 20 of the firm's biggest hedge fund and private equity clients from around the country showed up-a testament to just how concerned financial industry insiders are about what few details geithner presented
Read Article Here:
http://finance.yahoo.com/news/Geithners-Bank-Plan-Led-To-cnbc-14341805.html
Geithner's Bank Plan Led To Hasty Goldman Meeting
How worried was Wall Street about a lack clarity in Treasury Secretary Tim Geithner's plan to save the banking system through the purchase of toxic debt? So worried that Goldman Sachs called a meeting to figure out how to fix the problem.
This meeting known as the "Goldman Sachs rountable" took place just hours after Geithner's speech (and the dismal market reaction) on Tuesday at the headquarters of Goldman Sachs in lower Manhattan.
Around 20 of the firm's biggest hedge fund and private equity clients from around the country showed up-a testament to just how concerned financial industry insiders are about what few details geithner presented
Read Article Here:
http://finance.yahoo.com/news/Geithners-Bank-Plan-Led-To-cnbc-14341805.html
Plunge Protection Team To The Rescue
Interesting late day "Hail Mary" in the stock market yesterday. Just as the Dow was hitting fresh lows and challenging technical support (-250 at 3:00) news is leaked of a federal plan to subsidize homeowner's mortgage payments. Pluge Protection Team did the job again.-LouThursday, February 12, 2009
Nearly 700 at Merrill in Million-Dollar Club
Outrageous and sickening.-Lou
Nearly 700 at Merrill in Million-Dollar Club
For nearly 700 lucky Merrill Lynch employees, 2008 was a million-dollar year, even though the brokerage firm lost $27 billion.
Andrew M. Cuomo, the attorney general of New York State, raised hackles by disclosing how Merrill Lynch distributed its 2008 bonus pool. The payments, made just before Merrill Lynch was sold to Bank of America in December, have already stirred anger for being paid earlier than usual. And Mr. Cuomo made it clear that the bulk of the bonuses were paid to a small portion of Merrill Lynch’s 39,000 employees.
“Merrill chose to make millionaires out of a select group of 700 employees,” Mr. Cuomo wrote in the letter, which was sent to the House Financial Services Committee on Tuesday night.
Read Article Here:
http://www.nytimes.com/2009/02/12/business/12merrill.html?_r=1&ref=business
Today's Tax Tip
If you are an investor, do not rush to get your taxes done just yet there still may a 1099 coming in the mail.
A law passed late last year permanently changed from Jan. 31 to Feb. 15 the deadline for brokers and brokerage firms to furnish Forms 1099-B to clients. The new deadline for brokers and mutual funds to mail the forms is February 15. The extension is necessary to give financial institutions more time to report dividends and stock sales more accurately.
Since Feb. 15 falls on Sunday this year , and Feb. 16 is a federal holiday. The 2009 deadline for the forms is Feb. 17, as a result. -Lou
Quote Of The Day
"They're all squawking about the 'pork' in the Democrats' 'rescue' package. They haven't had much of the rake-off the last eight years. They won, and they deserve it! Are you going to tell the barbarians that they can't sack the town, loot the gold, and rape the women"-Arch Crawford, Editor Crawford Perspectives Newsletter
Wednesday, February 11, 2009
Gold On Way To $1,000/OZ
Gold is on some run. The charts look extremely bullish, silver too!-Lou
Gold Adds Another $30 An Ounce
(RTTNews) - Gold climbed again on Wednesday as traders continued to turn to the safety appeal amid lingering doubts over U.S. rescue plans. With the rally, the metal reached its best level in more than six months.
April gold closed at $944.50 an ounce, up $30.30 on the session. Earlier, prices reached as high as $949.00, its best level since July.
April gold closed at $944.50 an ounce, up $30.30 on the session. Earlier, prices reached as high as $949.00, its best level since July.
The metal has gained more than $50 in a two-day rally. Traders flocked to the hedge appeal of the precious metal since Tuesday after Treasury Secretary Timothy Geithner's speech was generally regarded as a flop, as he failed to provide enough details about the plan to restore credit flows.
Read Article Here:
Deluge of Financial Calamities Looming by Mid-March
Deluge of Financial Calamities Looming by Mid-March
As horrible as the financial news for currencies and paper assets has been since mid-2007, it looks like the worst is yet to come - perhaps as early as next month. Over the weekend the Managing Director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, told a gathering of Southeast Asian central bankers that the world's advanced economies are already in a depression and that the financial crisis may deepen unless the banking system is fixed.
On Febr. 4, Paul Wolfowitz, the former president of the World Bank, said the IMF and similar institutions are incapable of coping with the global financial crisis because they do not have enough resources.The market appears to have turned on U.S. Treasury debt. Analyst Adrian Douglas issued a report on Sunday titled "Bond Market Collapse Unfolding." He used his proprietary Market Force Analysis on the price of the 10-year U.S. Treasury Note.
Last September and October, as the value of Treasury debt was falling, it looked almost certain that the U.S. Treasury entered the market to purchase its own debt! This had the effect of boosting the price of Treasury bonds.
Read Article Here:
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=6218
As horrible as the financial news for currencies and paper assets has been since mid-2007, it looks like the worst is yet to come - perhaps as early as next month. Over the weekend the Managing Director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, told a gathering of Southeast Asian central bankers that the world's advanced economies are already in a depression and that the financial crisis may deepen unless the banking system is fixed.
On Febr. 4, Paul Wolfowitz, the former president of the World Bank, said the IMF and similar institutions are incapable of coping with the global financial crisis because they do not have enough resources.The market appears to have turned on U.S. Treasury debt. Analyst Adrian Douglas issued a report on Sunday titled "Bond Market Collapse Unfolding." He used his proprietary Market Force Analysis on the price of the 10-year U.S. Treasury Note.
Last September and October, as the value of Treasury debt was falling, it looked almost certain that the U.S. Treasury entered the market to purchase its own debt! This had the effect of boosting the price of Treasury bonds.
Read Article Here:
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=6218
Gerald Celente on Glenn Beck "Global Katrina"
Interesting and scary interview with someone who has been spot on regarding this financial crisis.-Lou
Watch Video Here:
http://www.youtube.com/watch?v=XioU6pJEmv0
Watch Video Here:
http://www.youtube.com/watch?v=XioU6pJEmv0
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