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No. Under current law (might change before Jan 1) as of jan 1, 2011

long term cap gains goes from 15 to 20%
top bracket goes from 35% to 39.6%
Dividend income goes from 15% to your marginal rate (as high as 39.6%)
short term capital gains still gets taxed at your marginal rate which is the current practice, but your marginal rate will be going up (likely if you are an anesthesiologist.)

Additional tax increases scheduled to come on line in future years to pay for Obama care.

Thank you for the clarification. I mixed up dividend income and long term cap. gains. Dividend income is taking a big tax hike.... 😡

For those of you who have been waiting to add Cirrus Logic to your portfolio, CRUS... today may be the day. They place chips in IPhone/IPad. Dropped 15% today.

http://investing.businessweek.com/research/stocks/snapshot/historical.asp?ticker=CRUS:US

 

[deleted126335]

Thank you for the clarification. I mixed up dividend income and long term cap. gains. Dividend income is taking a big tax hike.... 😡

For those of you who have been waiting to add Cirrus Logic to your portfolio, CRUS... today may be the day. They place chips in IPhone/IPad. Dropped 15% today.

http://investing.businessweek.com/research/stocks/snapshot/historical.asp?ticker=CRUS:US

May not happen. Depends how upcoming elections go. Estate tax also hanging in the balance.

 

[Bill59]

It amuses me that people who go on and on about market timing and daytrading, and how much money they're making at it, never seem to post specifics. And when they do, it usually turns out to be an smugly unverifiable retrospective claim of success, or a prospective flop (like this one).

But you have to give him credit for laying it all out there. If you're going to go down in flames, at least let everyone else enjoy the pretty colors.

 

[Narcotized]

Cash holders got wiped out.

Don't forget the only thing worse than that will be US bond holders (notes, bills, etc). Not only will the bonds drop in real value proportional to cash dropping, but add the double whammy of its nominal value dropping as well secondary to rising interest rates (in other words you buy $1000 of bonds today with low interest rates and gas costing $3 a gallon, and you sell them in 5-10 years for $500 because of high interest rates, and on top of that purchasing power plummetting with gas costing $20 a gallon).

What foreign countries in their right minds are buying our worthless crap bonds at ridiculously low interest rates? It's like they are sitting around saying, "Hey I got an idea; let's basically throw our money into a fireplace by buying US debt. We get a 2-3% annual nominal rate while the real value will eventully crash at well over a double digit rate."

We have enjoyed one of the greatest sucker rides ever from foreign governments, but the day they stop propping up our debt ponzi is the day the party is over. And for anyone that thinks they have to keep propping us up so they don't lose their our money, this is like thinking if investors had only kept giving Madoff money he never would have collapsed and investors wouldn't have lost their money. Asians are really good at math. Trust me, somebody over there has figured this out and an exit strategy is being formulated.

 

[deleted126335]

Don't forget the only thing worse than that will be US bond holders (notes, bills, etc). Not only will the bonds drop in real value proportional to cash dropping, but add the double whammy of its nominal value dropping as well secondary to rising interest rates (in other words you buy $1000 of bonds today with low interest rates and gas costing $3 a gallon, and you sell them in 5-10 years for $500 because of high interest rates, and on top of that purchasing power plummetting with gas costing $20 a gallon).

What foreign countries in their right minds are buying our worthless crap bonds at ridiculously low interest rates? It's like they are sitting around saying, "Hey I got an idea; let's basically throw our money into a fireplace by buying US debt. We get a 2-3% annual nominal rate while the real value will eventully crash at well over a double digit rate."

We have enjoyed one of the greatest sucker rides ever from foreign governments, but the day they stop propping up our debt ponzi is the day the party is over. And for anyone that thinks they have to keep propping us up so they don't lose their our money, this is like thinking if investors had only kept giving Madoff money he never would have collapsed and investors wouldn't have lost their money. Asians are really good at math. Trust me, somebody over there has figured this out and an exit strategy is being formulated.

You are correct. I used cash and bonds interchangeably.

The Federal reserve is now the second largest holder of US debt and soon will be the largest. I guess they are betting that when inflation heats up they can raise reserve requirements so banks won't lend as much, raise interest rates to control inflation. Hoping that the economy has recovered by then. I hope that they are right.

 

[cfdavid]

Don't forget the only thing worse than that will be US bond holders (notes, bills, etc). Not only will the bonds drop in real value proportional to cash dropping, but add the double whammy of its nominal value dropping as well secondary to rising interest rates (in other words you buy $1000 of bonds today with low interest rates and gas costing $3 a gallon, and you sell them in 5-10 years for $500 because of high interest rates, and on top of that purchasing power plummetting with gas costing $20 a gallon).

What foreign countries in their right minds are buying our worthless crap bonds at ridiculously low interest rates? It's like they are sitting around saying, "Hey I got an idea; let's basically throw our money into a fireplace by buying US debt. We get a 2-3% annual nominal rate while the real value will eventully crash at well over a double digit rate."

We have enjoyed one of the greatest sucker rides ever from foreign governments, but the day they stop propping up our debt ponzi is the day the party is over. And for anyone that thinks they have to keep propping us up so they don't lose their our money, this is like thinking if investors had only kept giving Madoff money he never would have collapsed and investors wouldn't have lost their money. Asians are really good at math. Trust me, somebody over there has figured this out and an exit strategy is being formulated.

For sure.


Narc, do you think this is just a little profit taking on gold? Or could this get a bit messy. Given that I feel that fundamentals favoring gold hanven't changed makes me think this is just some profit taking. BUT, I no longer really believe in fundamentals either, so if the masses get manipulated into fear of a bubble, well then it could materialize......

 

[countingdays]

Don't forget the only thing worse than that will be US bond holders (notes, bills, etc). Not only will the bonds drop in real value proportional to cash dropping, but add the double whammy of its nominal value dropping as well secondary to rising interest rates (in other words you buy $1000 of bonds today with low interest rates and gas costing $3 a gallon, and you sell them in 5-10 years for $500 because of high interest rates, and on top of that purchasing power plummetting with gas costing $20 a gallon).

What foreign countries in their right minds are buying our worthless crap bonds at ridiculously low interest rates? It's like they are sitting around saying, "Hey I got an idea; let's basically throw our money into a fireplace by buying US debt. We get a 2-3% annual nominal rate while the real value will eventully crash at well over a double digit rate."

We have enjoyed one of the greatest sucker rides ever from foreign governments, but the day they stop propping up our debt ponzi is the day the party is over. And for anyone that thinks they have to keep propping us up so they don't lose their our money, this is like thinking if investors had only kept giving Madoff money he never would have collapsed and investors wouldn't have lost their money. Asians are really good at math. Trust me, somebody over there has figured this out and an exit strategy is being formulated.

The problem is that there IS no easy exit strategy. What are they going to do? If they stop buying our debt- we stop buying their exports. We have hyperinflation- they have massive unemployment. We'll have a great depression- they'll have a civil war.

They can't get out until they have a consumer base large enough to maintain their employment without so much dependence on exports. When and if that happens, hopefully our trade deficit will go away, and there won't be anything needing an exit strategy. The problem is that walking the tightrope that grows their middle class without destoying our economy is tough and likely to fail. We're greedy for products we can't really afford at artificially low prices. They're greedy for unfair-trade-driven-growth at a rate that isn't sustainable. We both need to change those bad habits, but probably won't.

 

[IlDestriero]

But we like our cheap junk. If not from China, where?
India, Africa? If only African governments were more stable. $$$$.

 

[Narcotized]

The problem is that there IS no easy exit strategy. What are they going to do? If they stop buying our debt- we stop buying their exports. We have hyperinflation- they have massive unemployment. We'll have a great depression- they'll have a civil war.

They can't get out until they have a consumer base large enough to maintain their employment without so much dependence on exports. When and if that happens, hopefully our trade deficit will go away, and there won't be anything needing an exit strategy. The problem is that walking the tightrope that grows their middle class without destoying our economy is tough and likely to fail. We're greedy for products we can't really afford at artificially low prices. They're greedy for unfair-trade-driven-growth at a rate that isn't sustainable. We both need to change those bad habits, but probably won't.

The current (incorrect) thinking is this will continue because China needs us to buy their stuff. That's like me (China) working for you and you (US) have gone broke. So I loan you $10,000 every month (that I will never be repaid) so that you can continue to employ me. I get to keep working and am paid with the very same money I "loaned" you. Am I really coming out ahead in this? No.

Some Asian math wiz has long ago figured out they are working for free. Of course it will cause some pain to collapse this present arrangement, but keeping it going would just cause more pain later and delay their rise in living standards if they begin to enjoy their own labor instead of laboring for us for free. That's the reason why China has already begun exiting to some degree and loading up on commodities, rather than throw all their money in the toilet for nothing in return on our debt.

 

[pgg]

The current (incorrect) thinking is this will continue because China needs us to buy their stuff. That's like me (China) working for you and you (US) have gone broke. So I loan you $10,000 every month (that I will never be repaid) so that you can continue to employ me. I get to keep working and am paid with the very same money I "loaned" you. Am I really coming out ahead in this? No.

Some Asian math wiz has long ago figured out they are working for free. Of course it will cause some pain to collapse this present arrangement, but keeping it going would just cause more pain later and delay their rise in living standards if they begin to enjoy their own labor instead of laboring for us for free. That's the reason why China has already begun exiting to some degree and loading up on commodities, rather than throw all their money in the toilet for nothing in return on our debt.

I agree that China doesn't need us as much as we need them, for the moment, but that's not to say they don't depend on us.

China's still got to find some market for the stuff they make. Europe? No. India & Africa & other developing countries? I'm pretty skeptical. Their own citizens? Lots has been said about how they're a country of savers, with an up & coming middle class itching to start buying and enjoying the goods they're making, but they've still got 900 million+ people living in the equivalent of Dilbert-Ebonia-style mud huts, with mass drowning, starving, or squishing events occurring like clockwork when the river floods or the earth shakes. We're their best current and future market.


On a macro level, China may be underpaid for what they're selling us, but they're not working for free. Their economy has had huge, real economic gains because of our appetite for their stuff. Despite the dubious future value of the US debt they hold, they've still been getting exactly what they want out of us: rapid, sustained, real growth in their economy and infrastructure.


Also, it's a pretty oppressive, brutal place. The peasants may be slaving away, living hard austere lives to sell artificially cheap stuff to Americans, but the regime running things seems to be satisfied if not pleased with the country's overall economic and strategic gains. The real burden and short stick goes to the peasants, but these are people who are either living ankle deep in mud or 12-to-a-room in urban slums. They used to be waist-deep or 20-to-a-room, so they're not going to be clamoring for economic warfare with the US. They're optimistic about the future the way 1950s Americans were.


China looks at the big picture and plans carefully for the long term. I think there's a good chance they're going to outcompete and simply own our asses 30 or 50 years from now. (It'll be interesting to watch their one-child demographic disaster unfold.) But I don't see catastrophic shifts in the near term. They certainly aren't going to deliberately fire the first shots in an economic war.

 

[Narcotized]

Also, it's a pretty oppressive, brutal place.

That is what I feel will be their undoing, if there is one; not our collapsing "consumer economy" (an oxymoron if I ever heard one). Our debt is a classic ponzi scheme. China isn't helping themselves by supporting it. By continuing to prop us up China is shooting themselves in the foot and setting themselves up for one Hell of a fall when our debt goes belly up. A huge obstacle will be that it's a state run economy to a large degree (that in itself is a disaster) in a brutal oppressive place, as you say.

 

[dhb]

It'll be interesting to watch their one-child demographic disaster unfold

Why do you believe this?
Western countries demographic policies have been shaped by the retirement ponzi schemes they've set up: in Europe social security retirement benefit started when life expectancy was 70 y/o so you would work 40 years until 60 or 65 and collect for only 5 to 10y.
They had not expected the big jump in life expectancy and the higher burden from these people on social security.

 

[pgg]

Why do you believe this?
Western countries demographic policies have been shaped by the retirement ponzi schemes they've set up: in Europe social security retirement benefit started when life expectancy was 70 y/o so you would work 40 years until 60 or 65 and collect for only 5 to 10y.
They had not expected the big jump in life expectancy and the higher burden from these people on social security.

I'm talking about China, and the excess of young men and dearth of young women. This has a few implications.

- A lot of guys are outta luck.
- Their population will likely begin to shrink in the next couple decades.
- Their population is aging, fast. Much, much faster than the western world.

It's a country where the kids traditionally take care of the elders. Two parents have one kid to support them in their old age. Then that kid has ONE kid ... who will someday have two parents and four grandparents to support.

It's like our own baby boomer problem squared. Social Security's insolvency is a shadow of what China's pension system is staring at. China has boomed in large part because of its massive pool of young cheap labor. That pool of labor is going to shrink. The ultimate irony will be when China starts outsourcing to cheaper labor in other SE Asian countries.


Their risk, as someone I don't remember put it more eloquently than I can, is that their country may very well grow old before it grows rich.


China may own a ton of our debt and have a huge trade surplus, but they've got their own problems.

 

[Narcotized]

China may own a ton of our debt.... but they've got their own problems.

That right there is one of their biggest problems of all!!

 

[dhb]

- A lot of guys are outta luck.

I get this part. It's got to be good to be a pimp in China 😀

 

[countingdays]

I'm talking about China, and the excess of young men and dearth of young women. This has a few implications.

- A lot of guys are outta luck.
- Their population will likely begin to shrink in the next couple decades.
- Their population is aging, fast. Much, much faster than the western world.

It's a country where the kids traditionally take care of the elders. Two parents have one kid to support them in their old age. Then that kid has ONE kid ... who will someday have two parents and four grandparents to support.

It's like our own baby boomer problem squared. Social Security's insolvency is a shadow of what China's pension system is staring at. China has boomed in large part because of its massive pool of young cheap labor. That pool of labor is going to shrink. The ultimate irony will be when China starts outsourcing to cheaper labor in other SE Asian countries.


Their risk, as someone I don't remember put it more eloquently than I can, is that their country may very well grow old before it grows rich.


China may own a ton of our debt and have a huge trade surplus, but they've got their own problems.

China has a significant advantage in dealing with a shrinking labor pool: their regime/ no PC charity view of foreigners. They could have a guest worker program in which the guest workers support their tax-base/pension system but get sent home without ever becoming eligible for benefits, education, etc. and without putting even greater strain on the pension system.

 

[Narcotized]

btw, 3 more days till the end of Obamageddon.

 

[deleted126335]

btw, 3 more days till the end of Obamageddon.

It won't make that much difference. Neither party, nor the American people have the courage to do what is necessary to reverse the course we are on. Bush borrowed and spent more than any president in history-till Obama. Obama's successor will do the same-unless market collapse makes that impossible.

 

[cfdavid]

It won't make that much difference. Neither party, nor the American people have the courage to do what is necessary to reverse the course we are on. Bush borrowed and spent more than any president in history-till Obama. Obama's successor will do the same-unless market collapse makes that impossible.

Finally Doze and I agree on something!!! Looks like you're not such a bad guy after all.....😀

We'll see though. It's interesting how the mainstream media is making the "Tea Party" out to be a bunch of racist kooks...... It's sad that some members have fallen to this kind of baiting as well. The Republican "leadership" (i.e. Sarah Palin) has tried to claim the Tea Party movement to themselves, and the MSM is falling in line with that (or pushing it?).

We're just becoming more polarized as time goes on, but probably not much will change, since the power structure, by default, does not wish it so....

cf

 

[Narcotized]

It won't make that much difference. Neither party, nor the American people have the courage to do what is necessary to reverse the course we are on. Bush borrowed and spent more than any president in history-till Obama. Obama's successor will do the same-unless market collapse makes that impossible.

It will make a HUGE difference. It won't get better. But it won't get worse as fast as it has been. Thankfully we will have gridlock. Narc LOVES government gridlock. It's the only way to prevent one party in total control from screwing everything up.

I've echoed your feelings numerous times that the country is too selfish, corrupt, and ignorant to reverse course. But at least for the next 2 years Obama can't keep his foot down on the accelerator heading in the wrong direction. He can only coast in neutral.

 

[countingdays]

hypocrits, who know very well social security and medicare need to be cut, will campaign against anyone who proposes critical changes. They care less about the country than their own careers. As a result, doing the right thing becomes electoral suicide.

Narc, is right that at least removing Obama/Pelosi power will prevent their fight to dig us into a deeper and deeper hole. It's hard to imagine any electoral possibilities where the aarp-democrat alliance doesn't fight to keep us in that hole though.

 

[pgg]

It won't make that much difference. Neither party, nor the American people have the courage to do what is necessary to reverse the course we are on. Bush borrowed and spent more than any president in history-till Obama. Obama's successor will do the same-unless market collapse makes that impossible.

http://www.biorationalinstitute.com/zcontent/alpha_strategy.pdf

Throwing the bad guys out is not the answer, because the bad guys are not in office to begin with. Politicians and bureaucrats are not your problem. They never have been and they never will be. Your life is being disrupted, and your property stolen, not by the politicians and bureaucrats, but by the people who hire them. It is not the man at the microphone, but the people in line. This is why the sting has been so incredibly successful for such a vast span of time: attention has always been focused on the political process, and the attack has always been aimed in that direction.

Pretend for a moment that you have cultivated a cabbage patch on your island, and Maynard has some goats. Every night Maynard opens your gate and lets his goats into your yard, and each night they feast on your cabbages. You decide to approach the problem by appealing to reason. You put together your arguments about how this is ruining your garden, stifling your incentive to grow cabbages, and will hurt the whole neighborhood in the end. You then walk out of your house, march down to your garden, and have a heart-to-heart talk with his goats.

A ridiculous approach, you say? Of course. While the goats are the ones who eat your cabbages, Maynard is the one who milks the goats. In the end, he is the beneficiary of their theft—he is the culprit who must be dealt with. Even if you find a way to communicate with the goats, it will not help. No matter how many goats you succeed in winning over to your point of view, the moment a goat sees the light and agrees to stop eating your cabbages, Maynard will stop getting milk. Immediately, Maynard will rid himself of that goat and replace it with another one that will eat your cabbages again. So it is with politicians. Even if you convince one to stop plundering you, he will be quickly replaced.

The problem isn't the goats, it's the milkers. Every lazy helpless person on the dole, every banker fleecing the sheep, everyone and everything big and small that's enjoying tax shelters or government incentives or social programs or any other bit of legislated wealth distribution. I'm not claiming my own hands are totally clean; I take the mortgage interest tax deduction, I'm going to take the 30% federal tax credit for my "green" photovoltaic power system, I'm always happy to accept whatever "free" stuff the government wants to "give" to me. Hell, I'm a government employee.

Someday the milk will dry up, and the culture and expectation of the milkers will change. It will take a Depression, a economically and socially catastrophic actual Depression, not the trivial **** of the last few years, for that to maybe begin to happen.

The party in office is mostly window dressing, and though I can't say I love government gridlock the way Narc does 🙂 it sure beats the alternative. We saw that alternative with unrestricted Republican power in GWB + a Republican legislature for 6 years; we've seen the Democratic equivalent (granted with far less competent execution) the last 2.

We've seen the two extremes our two party system can offer, and none of the fundamentally broken bits of our economy or government have improved in the slightest.

 

[cfdavid]

This guy is worth listening to. He has a number of books out, relative to the history of empires and finance.

This is a bit long, but well worth it.

http://fora.tv/2010/07/28/Niall_Ferguson_Empires_on_the_Edge_of_Chaos

 

[sevoflurane]

600 billion Hail Mary good or bad? Stock market up yestardey... Factitious? Obama thinking about negotiating his tax ideas... Related?

151,000 new jobs. Unemployment stays at 9.6%, however. Average hourly earnings increased 1.7 percent in October from the same month last year.

Going to hold and see what happens or is it time to sell and keep a profit?

Nice little rally... how long will this bullish run last? Is this a sign of recovery? We are getting close to the 12,000 Mark... Maybe staying liquid wasn't such a good idea.

 

[deleted126335]

http://www.biorationalinstitute.com/zcontent/alpha_strategy.pdf



The problem isn't the goats, it's the milkers. Every lazy helpless person on the dole, every banker fleecing the sheep, everyone and everything big and small that's enjoying tax shelters or government incentives or social programs or any other bit of legislated wealth distribution. I'm not claiming my own hands are totally clean; I take the mortgage interest tax deduction, I'm going to take the 30% federal tax credit for my "green" photovoltaic power system, I'm always happy to accept whatever "free" stuff the government wants to "give" to me. Hell, I'm a government employee.

Someday the milk will dry up, and the culture and expectation of the milkers will change. It will take a Depression, a economically and socially catastrophic actual Depression, not the trivial **** of the last few years, for that to maybe begin to happen.

The party in office is mostly window dressing, and though I can't say I love government gridlock the way Narc does 🙂 it sure beats the alternative. We saw that alternative with unrestricted Republican power in GWB + a Republican legislature for 6 years; we've seen the Democratic equivalent (granted with far less competent execution) the last 2.

We've seen the two extremes our two party system can offer, and none of the fundamentally broken bits of our economy or government have improved in the slightest.

Excellent post.