Posts Tagged ‘graphsandlaughs llc’
Monetary Slow Down
While the Fed has increased the money supply by $2 trillion and will increase it by another $1 trillion by 1/1/14, inflation is MIA. This is because the velocity of money, or the number of times a dollar changes hands before it is saved, has collapsed. Before the Great Recession, M1 (cash) velocity was 10.5,…
Read MoreHouses for Nothing
According to CoreLogic, house prices rose 7.4% for the 12 months ending 11/12 (6.7% excluding short sales), the best numbers since 5/06! With 30-year mortgage rates at 3.4%, this means that the real cost of financing a home is NEGATIVE 4%! That’s like getting paid 4%/year to buy a house. As a result, it’s not…
Read MoreCheap Charity
By raising marginal tax rates for the upper 1% of the population from 35% to 39.6%, passage of the fiscal cliff avoidance bill will encourage increased charitable giving by the rich because it’s cheaper! To be precise, it’s 7.8% cheaper even after the phase-out of Schedule A deductions is considered. This unintended consequence will result…
Read MoreDeclining Deductions
With passage of the American Taxpayer Relief Act of 2012 (the fiscal cliff bill), the residential real estate industry dodged a bullet. While Schedule A deductions are phased out for couples with incomes above $300,000, the phaseout is mild. A couple with $500,000 of income would be $200,000 over the $300,000 limit. Thus, their deductions…
Read MoreUnhedged Is Best
In 2012, hedge funds rose an average of 3% compared to 13.4% for the unmanaged S&P 500. Worse, over the past decade a portfolio of 60% stocks and 40% sovereign bonds returned 90%, while hedge funds eked out a measly 17% gain. While some hedge funds do extraordinarily well, that’s inevitable with 8,000 funds! But…
Read MoreCongressional Cowards
Only by pushing off all hard decisions was Congress able to prevent us from going over the fiscal cliff. Now we face Debt Ceiling Battle II which must be resolved by March, a fight over annual spending cuts of $100 billion which after being postponed now commence in March, and a government budget that expires…
Read MoreMilky Mess
If Congress doesn’t extend the existing farm bill or pass a new one, milk prices will double. This is because price supports would be based on the 1949 Agriculture Act and would be $38/hundred-weight, as opposed to $20.83 now. Should this happen, expect plunging short-term consumer demand and massive imports of dairy products from abroad,…
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