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washparkhorn

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Everything posted by washparkhorn

  1. The 700 billionaires subject to the plan killed it in Congress. The proposal was aimed at how the ultra wealthy (700 billionaires) borrow against their wealth without adverse tax consequences. WSJ story on the issue: Rising stocks and rock-bottom interest rates have delivered a big perk to rich Americans: cheap loans that they can use to fund their lifestyles while minimizing their tax bills. Banks say their wealthy clients are borrowing more than ever before, often using loans backed by their portfolios of stocks and bonds. Morgan Stanley wealth-management clients have $68.1 billion worth of securities-based and other nonmortgage loans outstanding, more than double five years earlier. Bank of America Corp. said it has $62.4 billion in securities-based loans, dwarfing its book of home-equity lines of credit. The loans have special benefits beyond the flexible repayment terms and low interest rates on offer. They allow borrowers who need cash to avoid selling in a hot market. Startup founders can monetize their stakes without losing control of their companies. The very rich often use these loans as part of a “buy, borrow, die” strategy to avoid capital-gains taxes. Many wealthy people are also borrowing against their portfolios. When Tom Anderson started at Merrill Lynch & Co. in Cedar Rapids, Iowa, in 2002, many of his fellow advisers had just one or two securities-based loans in their book of business. Over the years, he encouraged more clients to borrow and noticed peers doing the same. Now it is common for advisers at big firms to have dozens of these loans outstanding, he said. Merrill Lynch is now a part of Bank of America. “You could buy a boat, you could go to Disney World, you could buy a company,” said Mr. Anderson, who now consults with banks on how to manage the risks associated with these loans. “The tax benefits are stunning.” For borrowers, the calculation is clear: If an asset appreciates faster than the interest rate on the loan, they come out ahead. And under current law, investors and their heirs don’t pay income taxes unless their shares are sold. The assets may be subject to estate taxes, but heirs pay capital-gains taxes only when they sell and only on gains since the prior owner’s death. The more they can borrow, the longer they can hold appreciating assets. And the longer they hold, the bigger the tax savings. “Ordinary people don’t think about debt the way billionaires think about debt,” said Edward McCaffery, a University of Southern California law professor who says he coined the buy-borrow-die phrase. “Once you’re already rich, it’s simple, it’s easy. It’s just buy, borrow, die. These are planks of the law that have been in place for 100 years.” https://taxprof.typepad.com/taxprof_blog/2021/07/buy-borrow-die-how-rich-americans-live-off-their-paper-wealth.html Again - this is all moot. The 700 billionaires killed the legislation through the Congress Critters they own.
  2. Brainwashed. Cult.
  3. I think Biden will end up backing the 15% minimum corporate tax. It dovetails nicely with his trip to Europe (where the global minimum corporate tax is part of the agenda). What other options are left?
  4. The billionaires killed the Billionaire Tax swiftly. Shocking.
  5. Snap GDP numbers from the Atlanta Fed look like shit: Nasty set-up for a financial sector addicted to $120 billion a month welfare payment from the Fed and negative interest rates.
  6. Sneaking in this before the chart jihadists have their way . . . Deflationary headwind as seen in GDP forecast product from the Atlanta Fed. Awful trend (GDP at less than 1), but hopefully this is transitory data skewing the model.
  7. Cathie Wood (intelligent crypto-bull) understands the deflationary headwinds in the economy: In 2008-09, when the Fed started quantitative easing, I thought that inflation would take off," Wood tweeted in response on Monday. "I was wrong. Instead, velocity - the rate at which money turns over per year - declined, taking away its inflationary sting. Velocity still is falling." In a lengthy Twitter thread, she argues that the price increases impacting consumers should wind down after the holiday season due to three sources of deflation. https://www.msn.com/en-us/money/other/cathie-wood-elon-musk-weigh-in-on-jack-dorsey-hyperinflation-tweet/ar-AAPZ5i6
  8. Yes we do. And it sits doing nothing - testing the credibility of the public investment multiplier effect. Easy fix - inject the free money at the human level, not the ultra-wealthy/corporation private spigot of free cash. Humans spending reestablishes the fiscal multiplier effect. It will all trickle up anyway. It always does. Money supply chain broken. See below.
  9. When you own the political class . . . why not?
  10. Great read. Thank you.
  11. Promising pardons? From Trump? That's treason. For the ringleaders, the Constitution spells out the due process they are afforded.
  12. So much narcissism for a human with baby chicken calves. Very naughty to skip leg day, MJT.
  13. Underrated villainy. On the non-political side, I see:
  14. All this new math . . . I was taught - Some Old Hags Can’t Always Hide Their Old Age.
  15. The kidnappers have an ICP vibe . . .
  16. The only issue in play is whether this is supply-side inflation or demand-pull inflation. The difference is important. Supply-side inflation (cost-push) is a different beast from demand side inflation (too much money burning a hole in someone's pocket). Different tools are deployed for each. A conservative economist explains the difference: https://www.nationalreview.com/2021/10/inflation-is-more-complex-than-you-think/ Supply-side inflation (as opposed to demand-pull inflation): TLDR: But if inflation has a significant supply-side component, forcing the economy to adjust to a new, lower level of demand, it will spell trouble for both labor markets and goods markets. Economics textbooks warn of the dangers of targeting inflation when supply is unstable. In terms of real output, those supply problems could cause aggregate-demand restraints to make things worse, not better.
  17. Sinema's brand value has plummeted. She professed and demonstrated her lust for Empty Suit Senator Status. She is a grifter. She lied to voters so she could take care of her needs. That's poison in the dominant people-oriented campaign funding realm. The $27 micro-funding strategies work. That will doom her current trajectory. She poisoned herself with the curtsy. She loses Arizona if she is cast as the corporatist v. the people. She must know that. Or maybe not. Perhaps she has a great awakening. Clock is ticking on her political future. I think she is toast, but I suppose she could do something and be granted atonement by the people of Arizona. I don't think she's smart enough to figure it out - and she likes the attention. Toxic narcissism in overdrive the past year. Pharma and her other Patrons should, if they have not already, disown her tactics or risk brand degradation. Just an opinion. Gallego hits the right notes to protect that seat. Sinema can't win it. Arizona Democrats have made tremendous gains. Let's hold them.
  18. TSMC of Taiwan, not INTEL, is the bellwether for that sector. TSMC has stated their highly desirable chips will be in short supply through 2022.
  19. What was the lesson of the teepee boy with a lance through his head and post-it notes adorning the spear's shaft?
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