The Bank Tax Is The First Tax Of Many
Posted by admin in Mixed Economy on January 15th, 2010
Jan. 15, 2010
24/7wallst.com
The Administration is proposing that large banks pay a tax based on .15% of total assets minus high-quality capital, such as common stock, and disclosed and retained earnings. Federal Deposit Insurance Corp.-covered deposits and insurance-policy reserves would be untaxed because such assets are already subject to federal fees. The burden of this tax would be on the 50 or so largest financial firms in the US including the subsidiaries of foreign banks. The target is firms assets over $50 billion. The White House calls the new levy the “Financial Crisis Responsibility Fee.” It could raise as much as $90 billion over the next ten years.
The idea of this bank tax comes as a new proposal in Congress to tax American bank executive bonuses much the way that the UK has is being considered. There will be more calls to take money from financial firms and their employees for two reasons. The first is the perception that the largest banks are most to blame for the credit crisis that did so much to damage the economy. The second is that the federal government desperately needs the money. It may as well use righteous indignation to get it.
Banks may have enough expert accountants to find a way around some of the tax, but eventually a diligent government is likely to squeeze most of the money out of Goldman Sachs (GS), JPMorgan (JPM) and their peers. The $90 billion won’t be enough to offset even a small part of the deficits the federal government will have over the next decade. The level of the 2009 portion of those deficits is about $1.4 trillion. The ten-year burden of deficits is almost unimaginable.
Several bank CEOs said that using the tax system as a means of punishment is a poor idea. Car companies lost money and needed government capital. They will not be forced to pay the tax. But, that misses the point. The Administration is clever enough to know that populism can seize on the nation’s negative reactions to a number of industries, trends, and national habits to raise taxes that it cannot increase by simply levying new burdens on the average American, or the average American business.
The attempt to raise tax dollars without an increase in the standard individual tax rates will probably take the form of levies on industries and “sin taxes”. The oil industry is a favorite target because of the costs of gasoline, heating oil, and petrochemicals. Exxon did make $4.7 billion in net income in the September quarter. The price of crude is back above $80 which means it have more than doubled in a year.
Another target for higher taxes is likely to be on the sale of cigarettes and liquor. They are easy targets. The Administration can make a strong case that smoking and drinking lead to higher healthcare costs which a reform of the system is not set up to directly address.
High deficits always make Washington scurry to find new sources of income. This time is no different except that the hole to fill is the largest ever.
Douglas A. McIntyre
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Great Stocking Gift Stuffer
The Slide
by Tony Pringle - Dec. 19, 2009
Market Mix Up
Looking for a great stocking stuffer for Christmas can sometimes be tough. But here at Market Mix Up, we found the best stocking gift that fits right into the stocking.
The Slide is a unique sunglass holder that fits right on your visor in the car. As common as it is to lose sunglasses, scratch them and even sit on them while getting in the car. Why not get your loved one a gift they’ll use forever, while allowing them to keep their expensive sunglasses shiny and new for a lifetime.
I just purchased the The Slide and I’m in love with it! I use to lose my sunglasses, scratch them and even break them. Now I have one less thing to worry about. The Slide never touches the lenses and secures your glasses gently by the temple bars. It’s the gift that keeps on giving!
For more info and to make an order, visit TheSlide.net.
Market Mix Up is a proud partner of The Slide!
Happy Christmas honey - here’s a divorce voucher
Posted by admin in Mix Up News on December 19th, 2009
Dec. 17, 2009 03:11pm EST
Reuters.com
LONDON (Reuters) - Stuck for Christmas gift ideas? Is your marriage or a friend’s going through a rocky patch? How about a divorce voucher?
In an unusual take on the season of giving, a London law firm is offering Christmas gift vouchers for divorce advice.
The firm, Lloyd Platt & Company, which normally charges 325 pounds ($530) an hour, said it had been swamped with enquiries since it launched the vouchers early last week.
So far, more than 60 have been sold — a snip at 125 pounds for a half hour session with a divorce lawyer.
The firm’s founder, Vanessa Lloyd Platt, said she had been amazed at the response to the vouchers. “They seem to appeal to an enormously widespread spectrum of people looking for that ‘must have’ gift for Christmas,” she said.
A spokesman for the Church of England called the vouchers sad.
“Divorce is a very personal matter and not really suitable for the idea of gift vouchers which are presents from other people,” he said.
Demand for the vouchers could soar over the next few weeks.
Christmas tends to be a particularly stressful time for families, with a huge rise in people seeking advice each January, Lloyd Platt said.
(Reporting by Elizabeth Fullerton; Editing by Steve Addison)
Dollar Reaches Three-Month High as Fed Says Economy Improved
Posted by admin in Mixed Economy on December 19th, 2009
by By Ben Levisohn & Ye Xie
Bloomberg.com
Dec. 19 (Bloomberg) — The dollar touched a three-month high against the currencies of major U.S. trading partners as the Federal Reserve said the economy improved while reiterating it will keep borrowing costs low for an “extended period.”
The euro dropped against the pound as Greece’s credit rating was cut by Standard & Poor’s and the European Central Bank raised its estimate for writedowns in nations using the single currency by 13 percent. The dollar posted its biggest weekly rally since June before an economic report next week forecast to show an advance in U.S. durable goods.
“This positive outlook from the U.S., from the Fed and much better data we have been recently seeing are giving you the impetus to get the euro-dollar lower,” said Emma Lawson, a currency strategist at Morgan Stanley in London, in an interview on Bloomberg Television.
The Dollar Index, which the ICE futures exchange uses to track the greenback against the euro, yen, pound, franc, Canadian dollar and Swedish krona, rose 1.5 percent to 77.721 this week, from 76.573 on Dec. 11, the biggest rally since the five days ended June 5. The index touched 78.141 yesterday, the highest level since Sept. 4.
The gauge of the dollar has appreciated 4.8 percent from this year’s weakest level reached on Nov. 26 as government figures showed the U.S. unemployment rate fell last month to 10 percent and retail sales rose more than forecast.
Before the payrolls report on Dec. 4, the greenback had fallen 20 percent from the 2009 peak reached in March as evidence of a global economic rebound spurred investors to buy higher-yielding assets funded with dollars.
‘Better Outlook’
“With that better economic data and better outlook, the U.S. dollar stops being the funding currency of choice as it was in 2009,” Lawson said.
The dollar appreciated 1.9 percent to $1.4338 per euro, from $1.4615 last week. It strengthened yesterday beyond $1.43 for the first time since Sept. 4. The yen strengthened 0.4 percent to 129.75 per euro, from 130.24. The U.S. currency advanced 1.6 percent to 90.49 yen, from 89.10. The euro decreased 1.3 percent to 88.74 U.K. pence.
Deterioration in the labor market is “abating,” and household spending is increasing, the Fed said in its statement at the conclusion of its two-day meeting on Dec. 16. Policy makers held the target rate for overnight lending between banks at zero to 0.25 percent.
Orders for U.S. durable goods increased 0.5 percent in November after a 0.6 percent drop in the previous month, according to the median forecast of 59 economists in a Bloomberg survey. The report from the Commerce Department is due Dec. 24.
Weaker Aussie
The Australian dollar was the biggest loser this week against the greenback among major currencies tracked by Bloomberg, dropping 2.5 percent to 89.02 U.S. cents. Reserve Bank Deputy Governor Ric Battellino damped expectations for further rate boosts, saying this week monetary policy is back in “the normal range.” The bank raised borrowing costs for three straight months beginning in October.
First Federal Bank of California and Imperial Capital Bank of La Jolla closed
Posted by admin in Financial Market on December 19th, 2009
by E. Scott Reckard - Dec. 19, 2009
Los Angeles Times
Both are sold immediately to other Southern California institutions. Regulators have closed 140 U.S. banks this year, 16 in California.
Two more loss-battered Southern California banks were shut down by regulators Friday and immediately sold to two of the largest financial institutions based in the region.
Stung by defaults on tricky adjustable mortgages, 80-year-old First Federal Bank of California was closed by federal savings and loan regulators, with its 39 branches to reopen today as part of OneWest Bank.
Pasadena-based OneWest, created early this year from the ashes of collapsed home lender IndyMac Bank, agreed to assume all of First Federal’s deposits, so no customers will lose money, the Federal Deposit Insurance Corp. said.
In Friday’s other California failure, Imperial Capital Bank of La Jolla, rocked by troubled loans for apartments and commercial mortgages, was dealt off by the FDIC to City National Bank of Los Angeles, which is emerging as one of the survivors of the banking industry’s near-meltdown.
Like OneWest, City National agreed to assume all of the acquired bank’s deposits, even amounts that exceeded the FDIC’s caps on insurance coverage.
Imperial Capital’s nine branches — six in California, one in Maryland and two in Nevada — are to reopen Monday as City National offices.
City National was the largest commercial bank with headquarters in Southern California until Pasadena’s East West Bank agreed last month to take over a failed rival in the Chinese American niche, San Francisco’s United Commercial Bank. That deal beefed up East West, giving it $19 billion in assets to City National’s $18 billion.
The latest combinations gives City National more than $21 billion in assets and OneWest about $24 billion, although such comparisons matter little given the fact that the acquirers will have to spend much of their time downsizing by working through portfolios of distressed loans. Indeed, OneWest’s balance sheet is still stuffed with IndyMac loans that had been targeted for sale before the private market for mortgages dried up, although the FDIC is sharing losses on those loans.
From Santa
America The Beautiful
Posted by admin in Mixed Economy on December 19th, 2009
