On the Matter of Taxes: “The Bush tax cuts were a primary driver of the growth in income inequality over the past decade”

“The 2012 election is already shaping up to be a war of the classes…and much of the battle centers around taxes.

President Obama is demanding that the rich chip in more to boost the nation’s coffers.

The Republican candidates are pushing for lower tax rates, which they say will boost the economy. They also want to reduce or eliminate capital gains taxes, a move that generally benefits the wealthy.

Taxes have played a major role in the widening divide between the rich and poor in recent years, according to the non-partisan Congressional Research Service.

CNNMoney looks at some of the big tax gifts Washington has given the richest Americans.”

NEXT: Bush tax cuts

So be it

“Economist and fund manager John Hussman likens our underlying economy to a hot potato.

“The period since 2010 has been largely characterized by a fragile underlying global economy coupled with a persistently overvalued stock market,” Hussman writes in a note to investors. “As unsatisfactory as it may be, the market is presently in an extended game of hot potato.”

Hussman notes that each time underlying credit strains emerge, demand backs off as consumers and businesses become averse to spending. Then, each time central banks launch some massive new intervention, there is a jolt of pent-up demand that is interpreted as sustainable growth.

“This was the result when the Fed launched QE2, and we’re seeing a replay as the ECB provides enormous loans to banks in return for ‘collateral’ in the form of newly-created, unlisted bonds that European banks have simply issued to themselves,” says Hussman.

Even with zero economic concerns, Hussman says the expected return-and-risk estimates for the stock market here are very unfavorable.

“This is because we presently observe a number of historically hostile syndromes that are almost uniquely associated with losses — not always immediately, but almost always large enough to make any intervening gains purely temporary. The stock market may very well enjoy a further advance from here,” he says.

“The likelihood of those gains being durable, however, is quite small.”

Read more 

Buffet bought a pice of Liberty Media and increased his stake in Direct TV

I’d make my own chips, but i guess a buy of Pringles puts you right on the shelf with brand recognition….

“Stock markets can expect to receive a boost from a second huge European Central Bank liquidity injection, according to Lakefield Partner’s Bruno Verstraete, who says another 1 trillion euros ($1.32 trillion) will be available for banks at a quasi-free interest rate on February 29.”

Full video/article

U.S. industrial output was unexpectedly flat in January as steep declines in mining and utilities offset gains in manufacturing, a Federal Reserve report showed on Wednesday.

Jetta Productions | Getty Images

The Fed revised December’s industrial output to show a solid 1.0 percent increase instead of the previously reported 0.4 percent gain, pointing to underlying strength in the economy.

Economists polled by Reuters had expected industrial production to increase 0.7 percent last month.

Unseasonably warm winter weather saw utilities output plunging 2.5 percent after a 2.4 percent decline the prior month. Mining production fell 1.8 percent after rising 0.9 percent.

Manufacturing advanced 0.7 percent after increasing by an upwardly revised 1.5 percent in December. That was previously reported as a 0.9 percent gain. Motor vehicle production jumped 6.8 percent after increasing 3.8 percent in December.

Capacity utilization, a measure of how fully firms are using their resources, fell to 78.5 percent from 78.6 percent the prior month. That was 1.8 percentage points below the 1972-to-2011 average.

Analysts were expecting capacity use to rise to 78.6 percent. Capacity use in manufacturing rose to 77.00 percent.

Officials at the Fed tend to look at utilization measures as a signal of how much “slack” remains in the economy — how far growth has room to run before it becomes inflationary.

Source

Although there are similarities with what the United States went through at the onset of the financial crisis, the issues in Europe are more complex and will take years to resolve, Henry Paulson, former Treasury Secretary and founder of the Paulson Institute told CNBC on Wednesday.

Mandel Ngan | AFP | Getty Images Henry Paulson

“There is similarity [with the financial crisis in the U.S.] in certain regards. This has been going on for a long time and I think it will take years to play out,” Paulson told CNBC.

Paulson, who served as Treasury Secretary when the subprime mortgages credit crunch erupted, sparking the world’s worst economic crisis since the Great Depression, said that at the time the U.S. was faced with a “collision of political forces and market forces”.

Full article

Source

Berkshire Hathaway Inc. (BRK/A) (BRK) (BRK/B US): Warren Buffett’s holding company reported stakes in DirecTV (DTV) , the largest U.S. satellite-television provider, and Liberty Media Corp. (LMCA) (LMCA US) after the billionaire hired stock picker Ted Weschler to help manage investments.

BioSante Pharmaceuticals Inc. (BPAX) : The original developer of Bio-T-Gel, a testosterone replacement therapy for men, and Teva Pharmaceutical Industries Ltd. (TEVA) won U.S. clearance to sell the drug.

Hartford Financial Services Group Inc. (HIG) : Billionaire John Paulson, who controls one of the largest stakes in the seller of life insurance and property-casualty coverage, filed a document with regulators so he can approach other investors about spinning off its property-casualty unit.

MetLife Inc. (MET) : The biggest U.S. life insurer said fourth-quarter profit surged on earnings from derivatives. Excluding some investment results, profit was $1.31 a share, beating the $1.24 average estimate of 19 analysts surveyed by Bloomberg.

Weight Watchers International Inc. (WTW) : The world’s largest seller of diet programs reported fourth-quarter earnings excluding some items of 86 cents a share, matching the average analyst estimate, and said it would buy back as much as $1.5 billion in shares.

Wells Fargo & Co. (WFC US): The largest U.S. mortgage lender’s Wachovia Capital Markets LLC settled a lawsuit by Normandy Hill Master Fund LP, which claimed the unit failed to disclose signs of fraud at Le-Nature’s Inc. as it arranged a $285 million loan for the company two months before the drink maker went bankrupt in 2006. Terms of the settlement weren’t disclosed in a court filing.

Yahoo! Inc. (YHOO) (YHOO US): Third Point LLC said it plans to nominate Daniel S. Loeb, Harry J. Wilson, Michael J. Wolf and Jeffrey A. Zucker for the board of the largest U.S. Web portal.

Zynga Inc. (ZNGA) (ZNGA US): The biggest developer of games for social-networking sites topped analysts’ fourth-quarter revenue estimates as new titles such as “Hidden Chronicles” and “CastleVille” added millions of players.

Source

The Andersons, Inc. (NASDAQ: ANDE) named as Value stock of the day at Zacks.
Bank of America Corporation (NYSE: BAC) Cut to Market Perform at Bernstein.
Dell Inc. (NASDAQ: DELL) Cut to UNderperform at Stern Agee.
Gevo, Inc. (NASDAQ: GEVO) Started as Buy with $16 target at Canaccord Genuity.
Goodyear Tire & Rubber Company (NYSE: GT) Cut to Hold at S&P Capital IQ.
Kimberly-Clark Corporation (NYSE: KMB) Cut to Neutral at Janney.
Oil States International (NYSE: OIS) Started as Buy with $103 target at Canaccord Genuity.
OmniCare Inc. (NYSE: OCR) Raised to Outperform at Credit Suisse.
Powerwave Technologies, Inc. (NASDAQ: PWAV) Cut to Underweight at JPMorgan; Target cut to $1.00 at Canaccord Genuity.
Rackspace Hosting, Inc. (NYSE: RAX) Cut to Market Perform at Raymond James.
Royal Caribbean Cruises Ltd. (NYSE: RCL) named Bear of the Day at Zacks.
Safeway Inc. (NYSE: SWY) Raised to Outperform at Credit Suisse.
Trimble Navigation (NASDAQ: TRMB) named Bull of the Day at Zacks.
Zynga Inc. (NASDAQ: ZNGA) Cut to Neutral at Baird; Cut to Equal-weight at Barclays.

Gapping up

BPAX +70.8%, GIVN +8.8%, LHCG +6.2%, INWK +6.1%, HIG +5.7%, EMKR +4.8%, ACAS +4.5%, LGF +4.3%, TEVA +3.4%, NRP +3.3%, DTV +2.3%, MET +2.1%,

ING +4.8%, BCS +4.1%, RBS +3.2%, DB +2.9%, HBC +2.8%, MS +2.7%, CS +2.2%, C +1.5%, BAC +1.1%,  CMCSA +6.9%, DF +6.3%, INWK +5.3%, EMKR +4.8%,

ACAS +4.5%, AIXG +7.2%, CREE +4.6%, VECO +1.4%, FIO +3.7% , SWY +0.7%,

Gapping down

PWAV -26.8%, ACPW -20%, ZNGA -7.9%, SAPE -6.3%, PEET -4.1%, RENN -4%, FTI -3.3%, FXCM -3%, QSFT -2.8%

In Play

On the Wires 

The Mortgage Bankers Association said interest in home purchases has taken a steep fall.

“(Reuters) – A Goldman Sachs technology analyst is under investigation by federal authorities for leaking inside information to hedge funds, the Wall Street Journal said, citing people close to the situation.

The newspaper named the analyst as Henry King and said his activities focused on the flow of information from Taiwan to U.S. investors about the supply chain for personal-computer parts makers from Taiwan.

In recent years, technology investors have increasingly used snippets of information about the production of computer parts as an indication of how demand in the United States for computers might be shifting, in turn affecting the results of U.S. technology companies, the Journal said.

It did not give further details on the investigation.”

Full article

Comcast added 366k internet users while losing only 17k video game users…

The company reported $1.20 per share and raised forecasts…

“Jeff Gundlach just hosted a webcast with clients.  The title of his presentation: “The Decline and Fall of the Roman Empire.“

Not surprisingly, Gundlach drew parallels between the U.S. and Ancient Rome.  Like the U.S., he noted that Rome had an insufficient tax system and a huge military budget.

Like Rome, the U.S. faces “persistence of a destitute underclass,” as reflected by the excruciatingly slow job recovery.

Gundlach’s talk also included commentary on the year-to-date performance of markets as well as his outlook for the rest of the year.

As usual, Gundlach’s presentation has all of the most important financial and economic charts you need to understand the world.”

Full presentation /article

“Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS), the two Wall Street banks most reliant on trading, warned U.S. regulators that a proposed ban on proprietary trading could make the financial system more risky and curtail services for clients.

The New York-based banks, along with competitors Bank of America Corp., Citigroup Inc. (C)and JPMorgan Chase & Co., are pushing to limit the reach of the Volcker rule, a ban on proprietary trading included in the 2010 Dodd-Frank Act. A draft of the rule, which takes effect in July, was released by U.S. regulators in October.

“Without substantial revisions, the proposed rule will define permitted market making-related, underwriting and hedging activities so narrowly that it will significantly limit our ability to help our clients,” John F.W. Rogers, Goldman Sach’s chief of staff, said in a comment letter.

“Although one of the key aims of Dodd-Frank was to promote greater stability in financial markets, we are concerned that the proposed rule could inadvertently increase systemic risk,” he added. If the rule makes hedging more expensive, “banking entities’ clients and customers will be forced to hold more risk on their own books.”

Full article