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taxing and more spending is precisely the wrong
strategy to take in this anemic recovery with over 92 million people who are
not working. I might add that the administration's third leg of their
strategic policy triad, namely a whole lot more regulating of the American
economy, is also counter-productive and a boat anchor on economic growth. Increasing
capital gains tax rates is a roadblock to economic growth. In examples
throughout the last century, we know that lower capital gains tax rates act as
an incentive to capital formation and investment, new business formation, new
products and services, and new jobs. Ultimately and ironically, even
government revenues get a boost with a more robust economy with lower marginal
capital gains rates. [more...]
A
new era is upon us. Recently Dish
Network announced their newest project that will be cutting ties with cable
lines. The new Internet streaming service is called Sling TV, which will give
users programming from a package of channels, including ESPN, for $20 a month.
The appeal of watching live sports is what keeps many in the loop with pay TV.
But that was then and this is now. Although CBS and HBO have recently also cut
their ties with cable contracts, Sling TV is the first service from an actual
cable - technically satellite - company to get in the game. Better watch out
Netflix. It looks like it’s time to up your game. Netflix may have a great
thing going for them, but only cable providers such as AT&T U-Verse offer
on-demand accessibility to the box office’s most recent movie releases. [more...]
Inflation,
whether determined by core, headline, or the feds' own internal measurement, is
not approaching the cyclonic days of yesteryear. As a matter of fact, the world
in general, and the U.S. in particular, cannot even get the rate to a paltry
2%. That's paltry by the '70's standards. Mortgage origination is at all-time
lows. Oil has dropped 55% in 6 months. The housing market's post '08 bubble now
seems to have sprung a leak. The only jobs being offered are minimum wage.
Mainstream media says rates will rise by mid-summer. The economic gang of 68
(those who unanimously predicted 4% 10-year treasuries by the end of 2014) say
increases could be sooner. Even the fed heads are saying "lackluster
inflation won't prevent a rate hike." So, why raise rates? [more...]
Although
the consumer sentiment in the U.S. alone appears to be on the rise,
Thanksgiving and Christmas retail sales were lackluster at best and the season
was carried by online sales at best. Unemployment is down and the stock
market up. It all looks good for 2015. But wait... the world is uncertain
due to the withdrawal of American leadership abroad. If you think Greece
caused a worldwide panic, wait until sanctions in Russia really take hold and
the imminent backlash there. Buy beltway bandits or defense stocks with a
focus on cyber security - they will do well. [more...]
Recent
financial woes reshaped the U.S. economy, but big companies are making big
deals again, especially in health care, technology and the media
industry. Monday was a tipping point following the acquisition between
two big pharmaceutical companies and then with another multi-billion dollar
takeover between two oil field service companies. It's the biggest year on the
books since 2000. The conditions are ideal, with borrowing costs low and share
prices rising, and because deals don't happen unless people are feeling good,
it seems that corporate leaders are optimistic with the times, with foresight
on growth. [more...]
On
November 16, the world of banking and money was officially flipped upside down
because of actions taken by the G-20 nations meeting "down under" in
Brisbane, Australia. People deposit their money in banks for safety. But on November
16, this gathering of 35 national leaders turned your bank into one of the most
unsafe places to put your money. Without warning, these G-20 leaders agreed
that the money in your bank account can be seized to pay bank debts. And some
of these leaders - especially President Barack Obama - have already begun
imposing billions of dollars in regulatory penalties on banks to squeeze money
out of them to grow their governments. [more...]
In
the November 10 London Telegraph,
James Titcomb reports that the chairman of the international Financial
Stability Board Mark Carney, Governor of the Bank of England, reveals how
future bank problems will be handled. His plan is that future problems in banks
that are "too big to fail" will never again end in government
bailouts using taxpayer money. Instead, as Craig Smith and I explained in our
latest book, Don't Bank On
It! The Unsafe World of 21st Century Banking, governments will employ
"bail ins" forcing what he calls "creditors" of various
kinds to bear banks' losses.
This
seemingly good news, however, conveniently neglects to reveal who all these "creditors"
are. It turns out that they include mere bank employees, whose income and
pensions may get a "haircut" to cover bank shortfalls. Those stuck
paying for bank shortcomings may also include customers - depositors who do not
understand that when they opened a bank account, they were in effect lending
their money to a bank and getting in return only an IOU. [more...]
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