Tuesday, September 14, 2010 - Top of the Range

General TSP Discussion.

Moderator: Aitrus

Post Reply
SgtWs

Tuesday, September 14, 2010 - Top of the Range

Post by SgtWs »

I wanted to start today off by letting you know that my postings will be a little more infrequent as I take off for a week of vacation in the Blue Ridge Mountains. So I haven't quit, just taking a much needed break.

Watching the market action yesterday leaves me feeling this is going to be a busy week. We are at the very top of our well defined trading range(see chart below), so we will be waiting and watching for signs of an improving economy that will either catapult us higher, or sink us lower.

Image

All you can do is watch the price action, as the 'experts' seem to be evenly divided over whether or not we are in a recession or recovery.

The key economic reports I will be watching for this week will be consumer spending and manufacturing output for August. Poor back-to-school numbers and low new car sales could bring an unwelcome pullback.

The government is out with retail sales for August at 8:30am ET, with economists expecting a rise of 0.3%, both for the headline number and ex-autos. July had seen a rise of 0.4%, with the ex-autos number rising 0.2%. At 10am ET, economists think business inventories for July will register a 0.8% increase, after a 0.3% rise in June.

The Hemline Index
Posted By Barry Ritholtz On September 13, 2010

With NY Fashion Week over, perhaps its time to take a look the hemline index, which we last looked at in June.

Here is the math behind the psychology, via Baardwijk & Franses of the Econometric Institute:

“Urban legend has it that the hemline is correlated with the economy. In times of decline, the hemline moves towards the floor (decreases), and when the economy is booming, skirts get shorter and the hemline increases. We collected monthly data on the hemline, for 1921-2009, and evaluate these against the NBER chronology of the economic cycle.

The main finding is that the urban legend holds true but with a time lag of about three years. Hence, the current economic crisis predicts ankle length shirts around 2011 and 2012.”
Intriguing.


Image

Image

Only 1 in 3 Americans Favor Keeping Tax Cuts for Wealthy
By Barry Ritholtz - September 11th, 2010, 8:54AM

Here is something that I hadn’t expected, probably due to the way Fin-Television has been covering this issue: Only “one in three Americans, including a minority of independents and Democrats, in favor of extending the Bush-era tax cuts for all taxpayers.”

Geez, based on the typical Squawk Box/Fox Business/NBC/ABC/CBS coverage, I was under the impression that a tiny minority of people were against this. (Remind me again why I watch other than Louie and Entourage?).

The data comes is according to a USA Today/Gallup poll:

“A majority of Americans favor letting the tax cuts enacted during the Bush administration expire for the wealthy. While 37% support keeping the tax cuts for all Americans, 44% want them extended only for those making less than $250,000 and 15% think they should expire for all taxpayers . . .

The fate of the 2001 and 2003 federal income tax cuts that were a centerpiece of Bush administration policy could be a significant campaign issue this fall. The tax cuts are set to expire after this year unless Congress votes to extend them. Congress plans to take up the issue next week when it returns to session.

It appears as though Congress, like the American public, broadly agrees that the tax cuts should be extended for American families earning less than $250,000. The debate Congress will have this fall will be over whether to extend the tax cuts for wealthier Americans. Most Republicans and some Democrats in Congress are thought to favor extending them for wealthier Americans. President Obama said Wednesday that he is opposed to any plan that would extend the tax cuts for wealthier Americans.”

That adds up it 59% who favor letting the top bracket cuts (defined as $250k per year) expire.

Pretty fascinating stuff, given the opposite impression the news has created.

Image

As Caroline Baum has written, this is precisely as as George Bush intended. If the Bush White House wanted a permanent tax cut, then they should have passed it through ordinary legislation, and not as part of a reconciliation bill (which automatically expires after 9 years) . . .

Post Reply

Fund Prices2024-03-28

FundPriceDayYTD
G $18.15 0.05% 1.05%
F $19.08 -0.06% -0.74%
C $82.21 0.11% 10.55%
S $82.43 0.30% 6.92%
I $42.57 -0.24% 5.95%
L2065 $16.38 0.02% 8.37%
L2060 $16.39 0.02% 8.38%
L2055 $16.39 0.02% 8.38%
L2050 $32.73 0.01% 6.95%
L2045 $14.91 0.02% 6.58%
L2040 $54.38 0.02% 6.22%
L2035 $14.34 0.02% 5.79%
L2030 $47.67 0.02% 5.38%
L2025 $13.15 0.03% 3.43%
Linc $25.61 0.03% 2.82%

Live Charts

Pending Allocations

Under development. For now, you may view Pending Allocations by going to "fantasy TSP" and selecting "Leaderboard sort" of "Pending Allocations".