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Tuesday, April 19, 2011

Carried away

Hello everybody,

Weeks ago I started getting some ideas on top of my normal drip and start practicing and gradually got um...carried away? is still way too soon but one hint is the comment that I made past week about what should we expect until around the end of the month.

I mentioned a down slope with a hump in the middle. and what got me really big, is the fact that is not a normal prediction: up, down or sideways- but is a complex form, which means 5 predictions together.

First a slant down
Second a reversal
Third a drop steep enough to get back or close to the original slope
Fourth Decelerate the pitch and get back to the downtrend of step one, but some more drop
Fifth bottoming process

And in that order and that order only.
I watch the fucking chart and swear to God I see the first three steps, don't know how far is it going to get but damn I'm thrilled just with three.

Not writing or having this stuff in the computer, is due to, besides my paranoia, a way to force myself not to get mentally lazy.I have to connect dots and having a whole picture in my head first before acquiring some kind of 'mastery" so to speak.

I remember Eric Clapton in one interview when he laughed at the idea that he play guitar like that because of talent. Of course he has talent but his laughing caught my attention because meant that the talent thing is not the "beef" of the story.

When he laughed he dismissed the concept of exceptionalism in a tacit way.
That you have or have not, and there's nothing that could be done to excell because is not inside our genes.

Usually happens the laughing when the "truth" is something entirely different to what a casual observer assumes.And the person involved finds amusing how people explain it to themselves.So I payed attention to what he said after the laugh and he mentioned that he drove his family...completely...crazy...practicing...guitar. Yes that's all.

So for an observer is a genetic talent what made him acquire mastery at playing guitar but it was revealing to me that his enphasis was in practicing his stuff. I always remember that interview.

So that's the main reason to not write down parts of anything, I need to get the thing as a whole in my head first is the only way to get some kind of mastery and not just a bunch of papers or documents spreaded around.

And the carried away part is because anticipating a complex form at least in it's first three steps maybe means that I start getting the melody.So maybe the whole thing is just keep practicing until the three steps become five in a row and looking almost effortlessly for a casual observer.But this is just the beggining not the end.

So will see what happen with the remaining 2 steps towards the end of the month and there I can start focusing back on the stock list again, I hope with a clearer idea about the trend.

Thank you
Dan

119 comments:

  1. @Dan

    Your comments and insight are an inspiration.

    We had this saying which was used in timing figure skating routines:
    "practice and tomorrow I'll be better than today".

    Next time you watch figure skating events, for the US participants, say that and you'll be amazed how the moves line up.

    Same as trading. Somehow, you've got the timing and I just have stops.

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  2. From Bloomberg

    1. Larry Fink (I missed most of the interview, I wish I hadn't): The Market is Technically short. The demise of QE2 is factored in already.
    (I don't believe either of those comments).

    2. Tim Geithner:
    We must change the tax code. We will add modestly to the burden of the most fortunate. The foundations for reforms are 1) the President's Proposal layout, and 2) the Fiscal Commission's layout.

    My comment to Tim: It's time to remove tax loopholes such as putting your house into a corporation and selling the corporation to avoid gains tax. Remove the loopholes first and then see where we are. I suspect the "most fortunate" are the ones that can take advantage of the loopholes.

    Also, isn't the President's proposal for reform quite different from the Fiscal Comission's proposal? How can you say this is the foundation for reform when it seems one foundation is in the south pole and one foundation is with Santa?

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  3. And, the way to remove loopholes: Get a team of 10 accountants, and audit the financial records of the top 100 richest people in the US. That's one audit per month per accountant. Plenty of time. Let the accountants identify the loopholes, and plug those with laws.

    Do that for 3 years and you'll have a set of laws which will prevent the "most fortunate" as Tim would say, from abusing the tax codes.

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  4. @Dss
    The vxx short is doing quite nicely, nicely. The man is lucky, for sure.

    Today is likely a TurnAround Tuesday. None of the stocks I follow are getting out of their down channel. I'm afraid I'm of the opinion that there is more down to come.

    Still looking for Eve's bottom.

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  5. Nice one, Dan.

    Great comments, Rock. Couldn't agree more with you about the tax loopholes. Time to scrap the thing and start over. Of course, a whole industry (tax accountants) will fight big changes to simplify things tooth and nail. That's always the issue isn't it in terms of enacting big change? Everything is now an intertia-ified (I made that up) clusterfuck whereby any big change will hurt some big, powerful, self-interested group in a significant way, so they hire their lobbyists to ensure that nothing signficant every happens, with a few more patches or band aids added on top instead to make things even MORE complicated and clusterfucky (another made up word) in the end.

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  6. dem...dem, Mannwich. Typing is the key here.

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  7. This is great - S&P Negative Watch Smackdown. Someone should put S&P and Moody's on "negative watch". LOL.

    http://www.nakedcapitalism.com/2011/04/sp-negative-watch-smackdown-wrap.html

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  8. @Dan,

    Thanks for the post.

    @Rock,

    Always look forward to reading your comments!

    Hot inflation number out of Canada. Let see how long BOC can put off hiking rates. He is ex-GS so always behinde the curve.


    ICan

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  9. It's public now. Fukushima reactor 3 is a meltdown.

    The bell is suspect.

    Japan's Fukushima prefecture, including Tokyo, is probably going to have to be evacuated. Not that I am any expert, but when the core melts down, it reforms at the bottom of the bell, where there is (by design) a lot of water. There has been substantial nuclear radiation measured in the surrounding area, so it's likely the bottom of the bell is damaged, and that water is leaking out. Containment has to be done by mother Earth now.

    The company running the facility has said that it is not likely they can get to the meltdown area for at least 6 months.

    A moment of silence, please, for the Japanese people.



    Please contribute what you can to the Japanese relief funds.

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  10. Morning folks! Somewhat of a tepid bounce after yesterday.

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  11. Rock,

    From the comments yesterday:

    anecdotally, I believe that in bear markets (not bull markets that pull back) prices tend to go down at night and trend higher during the day.

    I might try to see if there is a study on Brett Steenbarger's site to back that up. It was his work that I read about the market going up at night and then consolidating during the day.

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  12. Wow Rock. Where are you seeing this news?

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  13. All that nonsense from S&P yesterday and TLT is up again today. S&P = the classic contrarian indicator, so I guess they're useful in some respects.

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  14. @Mannwich

    Sorry. May not be public. I may have misspoke.

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  15. Dan,

    Great post! Thanks for the insights.

    The book "Outliers"

    Outliers - The Story of Success

    details exactly what you have observed. Fascinating book. Practice has a great deal to do with success, as well as being in the right place at the right time.

    "Outliers can be enjoyed for its bits of trivia, like why most pro hockey players were born in January, how many hours of practice it takes to master a skill, why the descendents of Jewish immigrant garment workers became the most powerful lawyers in New York, how a pilots' culture impacts their crash record, how a centuries-old culture of rice farming helps Asian kids master math. But there's more to it than that. Throughout all of these examples--and in more that delve into the social benefits of lighter skin color, and the reasons for school achievement gaps--Gladwell invites conversations about the complex ways privilege manifests in our culture. He leaves us pondering the gifts of our own history, and how the world could benefit if more of our kids were granted the opportunities to fulfill their remarkable potential. --Mari Malcolm"

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  16. Manny,

    Exactly. The TLT and the bond complex are better short term gages of the news.

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  17. Market is trying to find support at the big round number of 1300 ES.

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  18. Do the ratings agencies have any clue (or just not care) about just how little they are respected out there these days? I mean, they didn't have much respect BEFORE the crisis, but now it's an utter joke.

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  19. Manny - I think they just exist to give "cover" to the big trading houses. As you said, they long ago lost any real relevancy.

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  20. This is somewhat encouraging. . . although it IS Spring.

    Housing picks up pace
    Start of construction on U.S. housing climbs 7.2% in March, while permits also show solid gain.

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  21. Down year over year though, Thor.

    Housing Starts:
    Privately-owned housing starts in March were at a seasonally adjusted annual rate of 549,000. This is 7.2 percent (±18.0%)* above the revised February estimate of 512,000, but is 13.4 percent (±9.1%) below the March 2010 rate of 634,000.

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  22. So we've now seen how the Banksters will make profits:

    fixed income trading.

    I'm not sure what that is, but Bloomberg says that's one of GS's big new profit areas.

    So lets all do some fixed income trading! Mannwich, you're on! Teach us!

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  23. Manny,

    From your NC article:


    "In November 1998, the day after the Japanese government announced a large-scale fiscal stimulus to its ailing economy, Moody’s Investors Service began the first of a series of downgradings of the Japanese government’s yen-denominated bonds, by taking the Aaa (triple A) rating away. The next major Moody’s downgrade occurred on September 8, 2000. Then, in December 2001, Moody’s further downgraded the Japan government’s yen-denominated bond rating to Aa3 from Aa2. On May 31, 2002, Moody’s Investors Service cut Japan’s long-term credit rating by a further two grades to A2, or below that given to Botswana, Chile and Hungary. Well, over a decade later and this has had no discernable impact on Japan’s ability to borrow at the rate the Bank of Japan sets, NOT the ratings agencies or the “bond market vigilantes”."

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  24. Thor,

    They get their money from rating the products so there is a built in conflict of interest even if they are telling the truth.

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  25. @Rock: We need leftback to come back and teach us. Wonder where he went? Over at the other blog? We miss his bond market insights.

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  26. @Denise: I wonder who's paying S&P for this recent rating on the U.S? Let's face it, they basically will rate anything the way someone wants it if they're willing to pay enough for that "rating" (I use that term VERY loosely for obvious reasons).

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  27. Gotta love Paul Farrell. He makes me look like a devout, even delusional, optimist. LOL.

    http://www.zerohedge.com/article/paul-farrell-10-doomsday-trends-set-destroy-america

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  28. Dan – Great post and great insight, in many respects I take the same pathway as you. Learn it first add to it later.

    When there is something I want to learn, I try to get to the nuts and bolts of it, what are all the moving parts, how do they fit together, what are the non-moving parts, why do we need them.

    Sometimes that process can be slow and painful, but in the end you can step back and say “Now I get it”

    Keep up your great work and I look forward to getting more insight from you.

    Mangy Mutt

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  29. Manny - There's nothing like a good dose of scary reality to get you going in the morning these days! :P

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  30. Rock – Maybe I am naive, be fixing the tax code seems pretty straight forward.

    Flat tax, anything you, your neighbor, store, contractor or corporation makes beyond a certain amount gets taxed.

    If the a business operates within the U.S. They NEED to pay taxes on their profit, yes the consumer will eventually pay that tax through higher prices, but in some ways it ends up cost the tax payers way more.

    WalMart is notorious for it’s low wages and business practices, yet they reap huge profits that go untaxed. Many Walmart employees work part time for minimum wage, there is no way these people can raise their family on what they are getting paid, so they apply for food stamps, medical assistance and welfare. These are all costs the tax payer are burdened with.

    If Walmart makes 100,000,000 profit and they get to keep 97% of it, what is their incentive to change – Exactly there is none.

    However if there were 20% tax on that profit, they now have some incentive to change and in theory they would pass some of that profit to their employees which would then force the employee into paying more in taxes, but hopefully keep them off (Or diminisht their need) of welfare.

    If Walmart did not choose to pass the profit to the employees, then they would HAVE to pay $20,000,000 in taxes, which would help to off set the costs of those on welfare.

    Anyway I know that is way over simplified, but it also seems our current system is way over complicated.

    Mutt

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  31. And I would add - take healthcare off the company's shoulders and enact singler payer. This would free up the antiquated burden of having the employee be yoked to his/her employer for fear of losing their coverage. It's such a massively inefficient way to provide health coverage for people. Isn't that obvious by now? Well, of course, but big players are more than happy with the status quo. Just ask billionaire and former United Health CEO Bill McGuire. But, hey, he "gave back" $5MM to build a downtown park by the new theater. Bravo Bill, bravo indeed. Snark off.

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  32. @Mutt: Much of our economy is based such complication, so don't expect that anything will be simplified any time soon.

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  33. But you are, of course (hello Hoffer), right.

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  34. On my favorite short, X, it looks like on the 3 minute chart, there's a double top at 52.75.

    Looks like the stochastics are on the oversold line, so when the stochs get back up to overbought, if the price is below 52.75, this might be a good short. It is my favorite short, and has bounced out of its downchannel today. I absolutely don't trust that bounce because of the last n quarters there have been substantial losses. If it bounces over 52.75, I probably won't dip my account to short that one, but it's interesting to watch.

    The volumes are extremely low, so if you try it, keep your stop very tight, and if it doesn't make money for you right away, get out.

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  35. Hah - inertia-fied. I'm stealing that :-p

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  36. Manny,

    By not enacting some form of single payer our government signaled that they were not serious about addressing the out of control health care costs in America and that the for profit health insurers won and the rest of us lost.

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  37. @Mutt:

    Corporate tax is a different issue. Not that I'm sidestepping that one, but it really is different.

    The US corporate tax rate is so high that businesses have to offshore jobs, and growth. I don't like it, and I wish the CEO's had more patriotism than capitalism, but they don't.

    So since personal tax is 90% of US tax revenues, let's fix the 90% problem before we fix the 10% problem.

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  38. @Thor
    MEE FIRST

    But you forgot the second word.....

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  39. Exactly Denise. And the beat(ings) go(es) on.

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  40. @Rock: I don't necessarily disagree, but what's the appropriate corporate tax rate and when will they ever be truly satisfied? It's basically a race to the bottom in countries sucking up to these big companies. If we offer a 15% tax rate, someone will offer 10% and so on and so on, until that rate is effectively zero, which, incidentally for many is where it is now. Corporations and their charters are a creation of the state, so either the state forces them to comply with the laws for their charters are revoked or we enact tariffs on those treasonous, unpatriotic companies that refuse to comply with the laws. There you go. Problem solved. These companies DO have a responsiblility to their communities if they are MADE to do so by some entity that also has significant power and the power to revoke their charter. That entity is the state.

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  41. @Rock: And back in the day, the corporate tax burden was at least as high as the personal tax burden. That burden has effectively been flipped on its head, with most of the burden (by far) being heaped on individuals but not corporations. Should this not be a shared burden?

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  42. Rock - I think it would be more accurate to say that small businesses in this country pay a very high tax rate. I think the big boys had the tax code reworked (loop holes) re-written to their benefit long ago.

    GE being a good example.

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  43. And man oh man - we've been on fire this week ! ;-)

    Great job guys!

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  44. Exactly, Thor. The small business (again, the little guy) gets hosed by the current corp tax rate, which is why they also lobby for the bigger companies' interests, even though bigger companies mostly pay squat right now. It's the same concept as yoking high income people's (the aspirational wealthy) tax rates to the uber-wealthy's tax rates. Strength in numbers politically.

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  45. Rock - I have no clue how corprations are/are not taxed within the Untied States, so I have no room to argue.

    All I know is for the most part human nature dictates we will only try and achieve when the benifit out ways the pain.

    A child who is learning how to walk, will fall down often until they are able to gain their feet and start walking.

    But a person who bangs their head against the wall will only do it for so long before they realize there is no benifit.

    And the tax codes should be written (Flat tax)in such a way that people want to learn to walk.

    If however corperation, people or who ever feel all they are doing is banging their head agains the wall, they will stop trying.

    All I am saying is if you make X amount you payy 10% of X (X not being your favorite short)

    Mutt

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  46. Rock,

    Not sure where you got the figures for the US corporate tax rate as compared to other countries but according to this source, our taxes are among the lowest in the world.

    How do US taxes compare internationally?



    And the distinction should be made as to the marginal tax rate, the effective tax rate.

    Just because we the marginal rate is 35% doesn't mean a hill a beans when the corporations actually pay nothing. And so many gigantic US corporations pay nothing.

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  47. @Denise: I think what Rock is saying is that the high rates on paper are what force U.S. corporations to seek tax havens where they can legally cheat and that if we lowered the rates on paper to say maybe 20% or less they'd somehow come back and pay their fair share. However, 20% is still more than 0%, so I'm not sure how that would work in reality. I'm guessing it wouldn't. OK, so let's lower the corporate tax rate to 15-20% but also stringently enforce no loopholes by either charging these companies civilly and criminally and/or enacting large tariffs as if they were foreign companies, which in effect, they're saying they are by offshoring so much of their revenues.

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  48. @MAnnwich, Thor, and Mutt:

    I am not a corporate tax expert. However, I do know that Singapore and Taiwan have better tax rates for corporations than the US.

    So the way this goes is:
    Intel lays out its processor in Grants Farm, and sends the masks to its fab shop in Taiwan. Income to the US: $0. Taiwan fabs the chips, sells the die to Indonesia for packaging. Income to Taiwan: $7 per die. Tax rate in Taiwan, 1%, or $.07 Income to the US: 0
    Indonesia packages and sends the packaged parts to Foxconn (China) for assembly. Sell price is $23, and Indonesia tax: 1%, so income tax to Malaysia is $0.23. Income to US is 0
    Foxconn China sells motherboards to Lennovo (China) for $37. Tax Income to US: 0
    Lennovo sells PC's worldwide. Income to US: 0.

    However, Intel reports $16 per chip, because in Indonesia, they made $16.

    None is taxable in the US.

    Do you get the picture? Not only did we outsource our jobs, we outsourced our personal tax revenue from the jobs, and we outsourced the corporate tax on the profits from the business.

    GE does not owe what you say. Because all their profits are made overseas. Where the tax rates are as you say, close to 0.

    There is an import tax on some finished goods, and the US makes income on that, but it's pretty small.

    Now with this example, can you understand why Indonesia stock market is up so much? All those profits have to be invested somewhere.

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  49. @ the Crew:

    And now please recall my anecdote of how profits are moved from wholly owned subsidary to subsidary without any tax burden: they just buy overpriced parts from the subsidary, and there's no way to prove the parts are overpriced because the subsidary simply says "but it cost us $16 to test that thing, package it, and ship it".

    done deal. No tax.

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  50. Dss:

    US corporate income tax rate is 40%.
    In addition to income tax, there is a payroll tax, matching FICA tax, matching health insurance (another tax), and required contribution to retirement funds (another tax).

    Sorry, no matter what your article says, US corporate taxes are next to Japan the highest
    in the world.

    You can see
    http://en.wikipedia.org/wiki/Tax_rates_around_the_world

    and you will see their rating system is 35% for the US, with only Japan higher at 40%. And don't forget, the states have their own tax structures.

    The other trivial thing is that in the US, development is an expense, and therefore taxed. So you have to get development offshore.

    The other trivial thing is that in the US, once you graduate a Singaporean national from MIT with honors, you revoke his visa and kick him out of the country so he can't contribute to the US economy.

    The US laws are absolutely not business-friendly. Some guy a lot smarter than Rock wrote this whole paper and told everybody how the Obama regime is business-unfriendly, and it's been in all the news, so you must have heard about it. Well, it's not just Obama, it's been going on for years. I had this same argument with my boss, who refused to keep business onshore, and off it went to Taiwan, Indonesia, China, and India.

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  51. Those tax rates are marginal, not effective. Effective tax rates are the best gage to use when determining tax burden.

    I do not understand how development, which you state is an expense, is taxed. Aren't development costs expensed? And then deducted from income which means it is not taxed? I know that my business expenses are deducted from my income, as well as my health insurance, etc. right off the top. (We are a business, taxed as a business, not as private investors)

    And I am not sure why you added the Singaporean national to this discussion of corporate taxes.

    Perhaps you can provide a link to this paper you are referring to so we can all see what you are talking about.

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  52. ROck - yes, I remember your words on that! Just because it's technically legal for these companies to do so, does not make it right though. How is this handled in Japan or France? Are they also allowed to offshore their taxes to pay the lowest rates?

    I don't know much about corporate taxes myself (ok, almost nothing) but something tells me that this is a global phenomena.

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  53. Rock and Dss - I see both your points btw - this is a tricky one.

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  54. Also, I don't know about you guys, but I love it when we disagree. Personally, when you guys disagree with me it forces me to defend and explain the statements I make and then puts my mind through a sort of mental gymnastics. THIS is what I was hoping we would build here and I think we have!

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  55. Manny's response to my statement that I was bullish on the economy based largely in part because of the sales at work. It hadn't occurred to me that people might be canceling their gym memberships to buy our products to work out at home.

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  56. Thor,

    On line debate forces people to defend their statements and conclusions in a way that is not possible in normal conversation. People make their points, and if challenged, they can provide links, stats, etc. to support their point of view. Keeps people honest, and less prone to talking out of their asses. :-)

    And I always find along the way that I learn something that I didn't know before from the discussion and it is fun to pick each other's brains.

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  57. @Dss:

    Your link above is all taxes relative to GDP. That's corporate tax, + income tax + Sales tax + property tax + fuel tax + Social Security tax + cigarette tax + accounts receivable tax + inheritance tax + telephone federal excise tax + State Unemployment Tax + road use tax + vehicle registration tax +.....who knows how many others there are / (divided by) GDP

    And we all know who measures GDP, right?

    Corporate tax is 40%, so corporations do their best to minimize their taxable amount.

    You are incorrect, R&D is expensed and is a taxed item for corporations. There has been one year of tax credit passed by congress for 2009, and on March 10, HR 4213 (not yet signed by Obama) has extended the credit to 2010. But historically, it has been taxed. There is no bill at present to make this permanent.

    There are ways for corporations to move taxes they owe from year to year. I don't understand that at all, so you may be referring to that "feature" of tax deferral.

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  58. @Dss:

    And it's like you've read we don't graduate enough qualified engineers to fill positions, right? Of course, nobody wants to sign up to be trained in a career that a corporation will send overseas, no matter how hard or long we word. Same as corporations with R&D. If you were a corporation who moved your R&D overseas, would you sign up to move it back if Congress passed one year's worth of tax credit? Not me.

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  59. Rock - I think I see what you're saying. Even though most large corporations do not pay the top tax rate of 35% - the fact that it's set that high, causes so many of them to try to offshore their profits in order to pay less taxes . . .which gives the effective tax rate that Denise is talking about.

    So maybe the best solution is to drop corporate tax rates down to say, 20 or 15%, but to outlaw the offshoring of taxes and end all loop-holes so that all of them pay 20% rather than just the one's who can afford a Tax Department filled with an army of accountants.

    Is that about right?

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  60. Rock - Wow, I 've never made that connection between off-shoring of industries and college majors. I've certainly tailored my career more toward support because I know that that's much harder to offshore than say, development or programming.

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  61. One thing is sure though, and I hear this repeated more and more in the MSM, the money the government is pulling in these days is lower than it's been in the last 60 years. We don't just have a spending problem.

    Which is horrible when you think about it, because there's no way we're going to get both cuts and taxes through this congress.

    Hell, even in CA, the Republicans have even refused putting an extension of our current tax rates on the ballot for people to vote on. Something polls show has the support of about 75% of the population. If we can't get this stuff done here in ultra-liberal CA, I really don't have much hope for the federal government to do the right thing. :-/

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  62. I have now officially made a 100% profit on my gold purchase of two and a half years ago. My other investment (will one day let you all know what it was :-) has also returned about 20%.

    I think I'm a much better investor than a stock trader.

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  63. I dunno how the US tax laws are not business friendly when our largest corporation (XOM) pays no federal income taxes.

    Nice link from the TPB:

    Corporate Freeloaders

    These companies paid NO federal income taxes:

    XOM,
    BAC,
    GE
    CHV
    BA
    VLO
    GS
    C
    COP
    CCL

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  64. Effective tax rates are what matters, not marginal tax rates. What corporations actually pay, not the rate that no one pays.

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  65. @Thor: Saw a chart the other day (will see if I can dig it up, maybe it was from someone here) that listed the U.S. as having the second LOWEST private effective tax burden in the developed world, just above Australia, who has the lowest. So one can argue all they want that we are "taxed too much" and that those other nations are taxed too high as well, but relative to everyone else, overall we are NOT an overtaxed people. The problem is this meme has gotten hold in the MSM and other self-interested parties (read: the rich and powerful) and they keep repeating it over and over again, so people believe it. It's called "the Big Lie" approach. Keep repeating a lie enough times and the Sheeple will come to believe it and promote YOUR interests at THEIR own expense.

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  66. should I say REAL tax burden? Probably better use of words here.

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  67. Manny - good point. I don't know how many of you use TurboTax, but when you finish, it gives you your effective tax rates. Mine is seldom over 12% with all my deductions. . .

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  68. I wonder if at some point in the not too distant future, as the comments keep growing, if it would be a good idea to have a market thread, and then our normal discussions. That way, we could give the traders a dedicated thread that is not filled up with non-market related discussions.

    Something to think about for later.

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  69. And can't ever tax these people more. They've "earned" every penny and that would crash the economy....maybe the economy in private yachts.

    http://www.huffingtonpost.com/2011/04/19/executive-pay-2010-ceo_n_850975.html

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  70. The level of sociopathic entitlement in the corporate C suite is beyond breathtaking at this point.

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  71. @Thor:

    I missed my trade. Too much typing. Sigh. Oh well, opportunities are made up quicker than losses.

    A long time ago, where I went to school, core 7 was described as "little Asia", because to be a white person in that cirriculum was unusual. Back then, they got out of school and went right to work for National Semi, or Motorola, or WD, or Intel. Well, we "Americans" complained, so the student visa was invented, and suddenly, these folks had to return to their home country after graduation.

    It was no problem for awhile, because a company could interview on-campus, and apply for an H1-B work visa, and the graduate, after returning to the home country, could return to the US to work.

    But now, because primarily due to taxes, corporations simply moved the R&D overseas. We used to have laws which prevented high technology from being exported, like you couldn't ship 64-bit encryption overseas, (Windows Server could not be shipped overseas), but that's all gone now, and basically you can ship any advanced technology overseas. Like mask sets for your latest processor, or Mentor Graphics ASIC development workstations.

    No, US laws are unfriendly to business here, in general.

    And that's pretty much why we've become a service industry country.

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  72. I'm OK with that idea, Thor. Maybe someone can post a chart or two in a different thread each day?

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  73. @Rock: That's hardly the only reason. Let's talk about wages as well. Don't you think lower wages overseas are a big reason (likely as big or bigger than taxes) as well for the U.S. becoming a service industry country?

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  74. Manny,

    Effective tax rate works for me. And because corporations are so different, it is difficult to get a meaningful comparison between them.

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  75. SLV continues its march upward. This bubble Benny is blowing in PM's and commodities is going to be fugly when it blows.

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  76. Rock - the same thing has happened in most of the Sciences. I have a very good friend who got his PHD in Chemistry from UC Riverside a few years ago and he was one of three Americans in the program. On the plus side though, most of the people in his program stay here to work.

    Same thing for the Indian's who I work with - 80% of them on H1-B, none of them (that I've spoken to) interested in going back to India. ICan - their number one complaint is "too much corruption"!

    I remember when you couldn't export technology - remember the Apple commercials from the late 90's? When they had a tank? Their machines were classed as technology that couldn't be exported because it was too powerful. Whatever happened to those laws??

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  77. Thor,

    We suggested the option of posting another thread in the evening, but I am not sure if people want to peruse two simultaneous threads.

    What does everyone think?

    And don't forget we will be slowing down for the summer as people go on vacation, too.

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  78. Rock - I'm sorry you missed your trade! Maybe that market thread wasn't such a bad idea after all ;-)

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  79. Maybe we keep it flexible so that if someone comes up with a good trading thread at any point, they can post it whenever. I'm OK with that.

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  80. Manny - yup yup. Whatever you guys want is fine by me as well. I always assumed that as time went by and we got more settled and started picking up more comments that we would have to massage the way the site works to make the most number of folks happy. No rush, and nothing I feel strongly about, just wanted to throw it out there so everyone knew we could change things as we go if we feel the need.

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  81. oooh, IBM AND Intel reporting after the close. After hours should be good.

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  82. @Dss

    I tried to explain how corporations may not have to pay US income tax. I see I'm not getting through. I'll try just one more time, then give up, I promise.

    corporations have to pay income taxes on their profits in the US. And they do. XOM got a tax refund because of expenses from the Exxon Valdize and because of a 3 billion dollar payment to their retirement fund which was required, which moved a tax liability from previous years into 2009. Exxon did pay sales taxes (billions). It's total tax liability on the 10-K form is 7.7B, according to TDAmeritrade.

    So to say they paid 0 taxes is a lie.

    Exxon is not obligated to release their income tax returns. And they have not. So wherever the person got the information that they paid 0 income tax, well, is dishonest. And I believe the XOM tax returns were not available to the person who wrote that Exxon paid 0 income tax to the US.

    They balance their business so the US income stream is offset by their US liabilities, so there could be no net taxable profits in the US (or the taxes are deferred, either way it's the same thing).

    It's legal. It's OK. It's not a problem. There is absolutely nothing wrong with it.

    But XOM has to report their income somewhere, and it's taxed somewhere. According to rumors on the internet, they paid 70 Billion taxes outside the US. But again, since the income tax forms are confidential and not public, there is no way of knowing what kind of taxes these are.

    Anyway, without seeing the income tax forms, which are not public, no one can state Exxon paid 0 income taxes.

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  83. Off to the gym - Manny, this working from home has some benefits after all! ;-)

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  84. @Thor: Takes some getting used to but I love it and would have a hard time going back to cubicle life now.

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  85. @Dss

    So you don't have to do the research, here's the 10-K from Edgar:
    http://investing.businessweek.com/research/stocks/financials/drawFiling.as

    And look at the section "Management's discussion and analysis of financial condition and results of operations" section "Taxes" and you will see "Income taxes" for 2009 of 15,119B

    That may or may not have been paid to the US.

    You will see their effective tax rate is 47%.

    so much for your "effective" tax rate.

    Their total taxes for 2009 was 78.6 B

    Don't believe everything you read, but Rock doesn't blow it out his ass. For 25 years I had thrown in my face that Development was an expense. 25 years, Dss. For 25 years, I had to justify that my organization was better and more efficient and more accurate than any organization in the world, so I could get my measly 6% budget. Which was constantly cut and cut and cut.

    25 years, Dss.

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  86. Might this give old Mr. Market a little boost tomorrow morning and beyond?

    http://www.zerohedge.com/article/ibm-jumps-2-after-hours-after-earnings-beet-guidance-hike-despite-margin-miss

    The longer we hang around at/near these levels, the more I fear that my top will eventually be breached and likely fairly soon.

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  87. Mannwich (3:22)- If foreign students are allowed to get a quality education here in the U.S., but then required to return to their country of origin eventually the number of educated people returning will not be able to find jobs, so it only stands to reason U.S. corporations would set up shop where they can get quality workers at bottom basement prices.

    I may be coming at this from a different angle then Rock, but I see it in the lower level jobs, that Americans no longer want. Whether they are doing it legally or ill-legally, is irrelative, but by taking these lower paying jobs, they are increasing their standard of living and filling jobs that are “too good” for Americans.

    If we are loosing high end jobs to foreign countries and loosing low end jobs to foreign immigrants, it does not leave to much room for increase in mid level jobs.

    Mutt

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  88. Red Headed Step ChildApril 19, 2011 at 6:02 PM

    Rock - When IT first started to become main stream, it seemed like most companies did not know where to put them and it has been my experience that many IT Depts are a spin off or derivative of the Accounting Dept.

    By nature accountants a penny wise and pound foolish and if they can not show why the cost of something is justified, they wont put it into the budget.

    Anyway, I know I am not telling you anything you do not already know, it just seems like often times IT is treated like the Red Head Step Child.

    Mutt

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  89. And really it does not matter who you are at 40% tax rate, there is a big incentive to either not work or find ways around they system.

    Who wants to work day in and day out to watch 40% of their income go to taxes and those are taxes right off the top, they do not include sales tax, property tax or any other taxes.

    That is why a fair flate tax would seem to work best, let people make as much money as they can, but they should know they are paying x% on it.

    At the same time let businesses make as much money as they can, but they should know they will also pay x% on it.

    Oh well....


    Mutt

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  90. Manny - I'm trying hard to be ok with watching TV while I'm technically working. . .I'm working hard to get past that though ;-)

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  91. Manny - when you ask how things are here in CA. I read things like this all the time now

    http://www.latimes.com/business/la-fi-hotel-deal-20110419,0,3113378.story

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  92. Rock,

    Your link was not working but I will take your word for what it says.

    Thanks for all of your clarifications and explanations.

    And nice trade on that VXX short!

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  93. Thor,

    There is development here in the bankrupt state of Illinois, as well.


    Rush University Medical Center

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  94. It would appear we are also getting a downtown stadium. Now I guess we have to find a team.

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  95. If they build it - will they come?

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  96. just saw an Apple commercial - a little kid learning how to write by tracing the inside of a white letter. Fascinating stuff, definitely a game changer.

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  97. Denise - I have no idea, I could have sword we already had a football team. That's how much I pay attention to sports :-P

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  98. @Thor, this may be of interest to you.

    http://tech.fortune.cnn.com/2011/04/19/why-apple-shares-are-dirt-cheap/

    @Manny, may also answer your question you posed yesterday.

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  99. hahaha, Andy you big turd. No one deletes your stupid comments, they're all sitting in SPAM where everyone can see them. Everyone you're making that statement to, including Mutt, can look in the SPAM filter and see what's there.

    I swear, I wonder sometimes if you were beaten as a child. Why do you constantly feel the need to lie? And lie so poorly at that. It's so fucked up!

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  100. Here's a little reality:

    America's Taxes at Historic Lows

    http://firedoglake.com/2011/04/18/an-inconvenient-truth-for-teabaggers-americas-taxes-hit-historic-lows/

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  101. Some interesting poll results on taxes:

    http://www.gallup.com/poll/147152/Americans-Split-Whether-Taxes-High.aspx

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  102. someone released your comments from Spam - you had one on the 11th, and another on the 14th of April. I'd go look in the threads for that day.

    Jesus, what do you think we do? Jealously guard everyone to make sure you don't get to influence them? Mutt knows where you hang out Andy. This persecution complex is getting a little old. You can't force people to be your friend, and no one over here is trying to silence you or prevent you from talking to people here.

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  103. Manny - 53% of the US thinks taxes are too HIGH? God, we're screwed.

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  104. we have nine admins Andy, take your pick.

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  105. This comment has been removed by the author.

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  106. Andy,

    Quit whining and playing the victim. No one deleted your comments. As Thor noted, they were caught by the spam filter, which is not even the least bit ironic.

    Comments that have been posted can be seen momentarily before the spam filter takes them.

    ICan regularly has his posts go to spam and I think that all of us has experienced days where comments that have been posted disappear into the ether and we have had to repost them, sometimes more than once, so get over your persecution complex.

    If you want to talk with Mutt, feel free. As Thor noted, your suggestion that we are trying to keep people from you is absurd, EVERYONE knows where to find you if they so desired.

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  107. And please don't come here thinking you are going to be able to start a flame war with your accusations because you will be deleted, with no apologies or fanfare.

    You folks made your choice more than a year ago and I suggest you stick with your first choice, what ever is left of it, that is.

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  108. Goodness had nothing to do with it!

    Mae West!

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  109. Another poll:

    http://bit.ly/ft7Hfz

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  110. The Onion-worthy headline of the night at Reuters:

    http://blogs.reuters.com/chrystia-freeland/2011/04/15/capitalism-is-failing-the-middle-class/

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  111. The results of their study are far from shocking to anyone with half a brain but it's quite telling that some in the MSM seem to be waking up to what most people have known for years, if not decades. From the article:

    "Spence and his co-author, Sandile Hlatshwayo, examined the changes in the structure of the U.S. economy, particularly employment trends, over the past 20 years. They found that value added per U.S. worker increased sharply during that period – 21 per cent for the economy as a whole, and 44 per cent in the “tradable” sector, which is geek-speak for those businesses integrated into the global economy. But even as productivity soared, wages and job opportunities stagnated.

    The take-away is this: Globalization is making U.S. companies more productive, but the benefits are mostly being enjoyed by the C-suite. The middle class, meanwhile, is struggling to find work, and many of the jobs available are poorly paid."

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  112. Nothing is Ever That SimpleApril 20, 2011 at 12:43 AM

    Andy (9:51) - I realize NOTHING in life is ever as easy or simple as it sounds on paper, but a flat tax seems the best and least complex way to go.

    It you or your company made over x amount of $$ per year (Say $7000 a year) you would pay taxes on it.

    If you get caught cheating on that amount you owe penalty plus the amount that was supposed to be taxed.
    Mutt

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  113. I DO think the current tax code should be scrapped, burned and discarded so that we can start over, but I'm not a fan of a straight flat tax. The code needs to be progressive, in my mind.

    Anyway, new polls are out on Obama and the economy and they are NOT good on either front. What a shock. The rest of this year could get very interesting but when it REALLY gets interesting is NEXT year, the election year, which is sure to be an utter circus on many fronts.

    http://www.huffingtonpost.com/arianna-huffington/obama-economy-speech_b_851311.html

    "The first poll results since the president's big speech on the economy last week are in -- and they're not very good. According to a new Washington Post/ABC News survey, the president's approval rating continues to fall, driven by fears about the economy. "Forty-four percent of Americans see the economy as getting worse, the highest percentage to say so in more than two years," wrote Dan Balz and Jon Cohen in the Washington Post. "57 percent disapprove of the job the president is doing dealing with the economy, tying his highest negative rating when it comes to the issue."

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  114. Some great gems in that article by Arianna, by the way. A MUST read on many fronts.

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  115. Manny - blech. I was struck that a majority of people didn't think we should raise the debt limit. WTF?

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  116. Wow - I didn't realize Obama's approval rating had fallen that far. Manny, yes, I think next year is going to be one for the record books.

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