Tag Archives: taxes

Current Events

Beware of Halloween Spooks

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Hello followers. I hope this missive finds you and yours in the best of health and staying safe. My bride and I returned from our getaway to St. Lucia very early this morning. Truly a relaxing place for the late twenty to late thirty crowd. For the early eighty crowd, not so relaxing; glad I purposely did not bring my Hearing Aids. Not quite my genre of music; in fact, it was unbearable. However, the place is so large and dissected in such a way we found a quiet pool away from all that. Anyway, we both had a great time, lots of fun in the sun.

I arrived home to find an excellent treatise by Greg on the current state of the economy in this once vibrant and glowing country of sane people. And as usual, I totally concur with all he states. It is coming folks. For those living off their 401K’s beware!! I and most who think like me have been selling for the past several weeks, and I shall continue during the ups and downs of Wall Street. I shall also do some selective buying, but inflationary companies, which are many, will not be on my sought-after lists.

The highlights in red within Greg’s treatise are mine.

October Instincts

By: G. Maresca

The Executive Director of JPMorgan Chase admitted that the stock market’s “biggest nightmare periods have tended to be October. You go back to obviously the crash in 1929, but the 1987 crash, and in 1989… was in October. You tend to have these October moments.”

Financially most are feeling pretty good as brokerage accounts never looked healthier and home prices are over-the-top. Over the past year, the S&P 500 has closed at new, all-time highs over 50 times and in so doing has created the illusion that the market only rises.

This results in taking more chances when investing.

The K-shaped economy and booming stock market underscore that Main Street and Wall Street are at a major disconnect. Many dismiss the growing rate of inflation, the unprecedented intervention by the Federal Reserve’s nonstop money-printing and increased debt believing that the dollar today is worth the same as it was last year.

It’s not.

The duality of low interest rates and those stimulus payouts have devalued the dollar. Thanks to inflation and time, savings in fixed investments like CDs, bank accounts and money markets lose purchasing power. With yields registering next to nothing, where are investors expected to put their money?

As a result, savers seek more risk in order to obtain better returns leading to a stock market that is cooking and overvalued. Increasing stock prices coupled with a mushrooming federal debt is a brick road paved over with inflation.  As the Fed continues easy-money policies, the market will continue higher as the infusion of cheap dollars rules the day.

Most bankers, brokers, and politicians understand that these bouts with inflation are what economists call: “The Money Illusion.” It is when one’s wealth is measured in how many dollars they possess, rather than its purchasing power.

Among investors, the Money Illusion breeds risk taking and heightened speculation. It’s like watching a skilled magician work his stagecraft. It looks and appears amazing and impossible, but it is not at all what it seems.

Low interest rates did, in fact, rescue the market. The Fed slashed short-term interest rates to near zero at the onset of the COVID-19 debacle and bought large purchases of Treasury and mortgage bonds making dollars discounted. In so doing, The Fed propped up not only the bond markets, but stocks, too.

Many are in denial about what is truly happening throughout our financial system. To paraphrase writer Upton Sinclair, it’s difficult to get someone to look when their getting paid depends on not looking.

Adding to the illusion is that 40% of all U.S. currency in circulation has been printed since March 2020. Few comprehend the effects of so many trillions in our financial system. The Case-Shiller Index which measures home prices has risen 18.6% for the year, up from a record 16.8% the month before. The index is the proverbial rat in the financial mine that brings with it a healthy dose of inflation.

Financial storm clouds are forming as the economy experiences labor shortages, supply chain disruptions, rising prices, and increasing inflation. With too many dollars chasing too few assets, the good times won’t last forever.

One out of every four companies are on life support because of low interest rates. With rates near zero, and with inflation rising, The Fed cannot afford to keep them low forever.

Bankruptcies are on the horizon.

The federal debt continues to grow as trillions crowd the government’s balance sheet with the debt literally growing by the second. Inflation does to a degree keep the debt somewhat manageable. However, as inflation rises, Social Security, and other assorted fixed incomes like pensions will see their buying power shrink even further.

Eventually, a significant tax increase will hit all Americans hard and below the belt – regardless of income.

Rising stock prices are great, but when easy money begins to create social, political, and economic turmoil, something is seriously amiss. A White House which believes that global warming, systemic racism and COVID are our greatest threats, does not possess the foresight and wisdom to comprehend what is economically occurring.

The laws of economics cannot be repealed, no matter what one’s wishful thinking may be.

As October looms, consider this a heads-up.

Postscript: Beware of the ghouls of October, they are coming, meanwhile many Americans keep chasing those soon to be negligent goods and, to paraphrase Mack the Knife , “Spending like a Sailor.”

Current Events

Christmas in July

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A couple making $149,999 a year with one child between six and seventeen gets $250/month?  And the rationale is it will reduce child poverty — really? Folks doing simple arithmetic of 39 million households getting the lowest of $250/month come to $9,750,000,000. Count the zeros, that’s 9.75 billion dollars a month, paid for by. . . . . .? And it lasts through till the end of the year.

Question,  is a child of a couple who make just short of $150,000  living in poverty?  Really? Oh well, surely the government would know; I mean their our leaders, right?

By: G. Maresca

Congressional Democrats approved an expanded version of the Child Tax Credit that was part of the American Rescue Plan and did so without bipartisan support.

On July 15th, the IRS began depositing $300 a month for every child under six and $250 for each child up to 17. This latest round of monthly cash infusion from Washington is for parents making under $75,000 per year, and for those parents filing jointly who earn less than $150,000 per year. Nearly, 39 million households, covering 88% of American children will receive the monthly outlays, according to USA Today.

Democrats maintain the payments will reduce child poverty, as if the absence of money were the problem. Democrats have thrown trillions at poverty starting with Lyndon Johnson’s “Great Society,” which is nothing short of Jim Crow 2.0.  and on its fourth generation of undermining the family. Cash helps but rarely addresses the underlying issues that money cannot solve.

This roguish cycle of government dependence is renewed by each subsequent generation of welfare recipients who teach their children, probably from a multitude of fathers, that they are entitled to the fruits of somebody else’s labor. Every welfare program must be tied to positive behaviors with a time limit on benefits. It should not be a lifetime annuity.

Replacing the father with government has done tremendous harm to women and children. Nearly 90% of incarcerated males grew up in fatherless homes. Contrary to the Left’s ridicule of American patriarchy, the problem is not that we have too much of it but not enough.

This so-called stimulus spending is an investment in buying future votes all in the name of compassion. Taking from those who work in order to provide for those who don’t to buy their votes is ideological theft. Democrats have made vote buying an art, while making voting more haphazard by not requiring ID – all to their benefit.

Such shenanigans are an integral part of keeping Democrats permanently in power. Provided Democrats can maintain their slight edge in the House of Representatives and retain Vice President Harris’s tiebreaker vote in the Senate in 2022, these apparatchiks will not only remain in power but solidify it.

If you believe monthly free cash will end poverty, your perception of human nature is wanting. A prime symptom of leftist derangement syndrome is believing poverty is solely based upon the lack of cash. Poverty is rooted in a plethora of issues that largesse ignores but certainly reinforces. Democrats have always been more fixated on symptoms than causes.

This cash infusion will not move the poverty level one percent because tax credits are not factored into the poverty rate. The same holds true for food stamps, Medicaid, Section 8, and earned income tax credits that total into the hundreds of billions annually – none of it counts.

The Leftist tradition of not holding anyone accountable for their contribution to their circumstance’s reigns. When bad behavior involves guns, the gun is at fault, not the humans who use them. When those who created their circumstances fail, it is society’s fault. This results in a one size fits all bureaucratic government program that only contributes to the nation’s decline.

Ian Smith, the New Jersey gym owner who refused to close his gym during the pandemic, summed it up this way: “Everything the government is doing right now is designed to make you fat, weak, stupid, depressed, lazy, and reliant on crumbs they wipe off their plates. Health replaced by pharmaceuticals. Education replaced by programming. Hard work replaced by handouts. These people hate you.”

Once acquainted with systematic direct deposits from everyone’s favorite Washington Uncle, less and less people will oppose them. One of the malevolent attributes of socialism is how it takes advantage of people by claiming to help them.

Democrats have always needed a dependent class to maintain their relevancy and hold on power. These longstanding attributes are now devolving into a dependent country.

The Child Tax Credit deposits are to expire at the end of the year, but Biden is hoping to extend them until 2025, the next presidential election. How is that for political expediency?

Sporting aviator sunglasses, Biden is Santa Claus, and every day is Christmas in America.

What’s not to like?