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Monthly Archives: March 2012

Citizens for Tax Justice: Corporate Tax Rate Already @ 11.3% on Average; Not the 35% Claimed

 

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“Indicative that something is amiss with the corporate income tax system, General Electric over the last 10 years paid only 2.3% tax on more than $81 billion in profits, according to the advocacy group Citizens for Tax Justice.

 It was revealed last year that GE paid no federal income taxes in 2010. In fact, it received $3 billion in net tax benefits for that year. GE officials insisted the company didn’t owe anything for 2010, but added that for 2011, things would return to “normal” come tax time.
But what’s normal for GE is different from what’s normal for most Americans. Citizens for Tax Justice claims the corporation’s “effective federal income tax rate” was only 11.3%, less than a third of the official 35% corporate tax rate.
“I don’t think most Americans would consider 11.3%, not to mention GE’s long-term effective rate of 2.3%, to be ‘normal,’” said Bob McIntyre, director of Citizens for Tax Justice. “But for GE, taxes are something to be avoided rather than paid.”
Citizens for Tax Justice studied 280 major corporations and discovered that, for the years 2008-2010, the average effective tax rate was 18.5% rather than the 35% that big businesses and their Congressional supporters have been complaining about. Twenty-nine of the companies actually had a negative tax rate over the three-year period. This was most often the case with companies in the energy industry, such as Pepco, PG&E, NiSource, CenterPoint Energy, Atmos Energy, Integrys Energy and American Electric Power. Wells Fargo, Verizon, Boeing and DuPont also had negative tax bills.”

 

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Virginia Legislature Votes Against Indefinite Detention of Americans

“Lawmakers in Virginia have put aside their partisan differences about health care, contraception and other issues to officially oppose a controversial law passed by Congress and signed by President Barack Obama that allows the federal government to detain Americans without trial for alleged terrorism-related activities.

By votes of 39-1 in the state Senate and 96-4 in the House of Delegates, the legislature approved a bill “to nullify” provisions of the National Defense Authorization Act (NDAA) of 2012.
The Virginia legislation is largely symbolic, as it does not prevent federal agents from arresting terrorism suspects. But the legislative action is part “of a larger NDAA nullification campaign around the country.”
Seven other legislatures are also considering anti-NDAA bills. In addition, several local governments have passed resolutions that either denouncement the federal act or require noncompliance with it.
As previously reported by AllGov:
Obama’s supporters, including Republicans who normally oppose almost everything he does, have tried to defend the bill by saying that it doesn’t really go as far as its critics claim. However, the wording of the act, although carefully phrased, is nonetheless clear….”

Full article

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Today’s Money Flows

ISSUE GAINERS                 SYMBOL   EXCH   LAST PRICE   MONEY FLOW    RATIO 
                                                          (in millions) 
Novadaq Technologies           NVDQ    NASD    99999.99      +250.0       0.00 
Edwards Lifesciences           EW      NYSE       72.84       +36.5      13.05 
Covidien PLC                   COV     NYSE       52.20       +30.7      15.61 
iShrs MSCI Emerg Mkts          EEM     ARCA       44.61       +27.1       2.85 
Google                         GOOG    NASD      619.97       +24.8       1.40 
Johnson & Johnson              JNJ     NYSE       64.95       +17.2       2.74 
Intel                          INTC    NASD       27.00       +16.1       2.47 
Microsoft                      MSFT    NASD       31.92       +15.4       1.32 
Cisco Systems                  CSCO    NASD       19.84       +14.0       2.14 
Vanguard MSCI Emerg Mkts       VWO     ARCA       44.88       +13.8       2.94 
Coca-Cola                      KO      NYSE       69.86       +13.4       3.13 
Amgen                          AMGN    NASD       67.62       +13.3       2.22 
ConocoPhillips                 COP     NYSE       77.43       +12.0       1.69 
IBM                            IBM     NYSE      197.26       +11.3       1.51 
Qualcomm                       QCOM    NASD       62.42       +10.0       2.00 
VISA  (Cl A)                   V       NYSE      116.86        +9.6       1.59 
Wells Fargo                    WFC     NYSE       31.57        +9.0       1.84 
General Electric               GE      NYSE       19.14        +8.7       1.83 
Goldman Sachs                  GS      NYSE      118.33        +7.6       1.20 
iShrs Russell 2000             IWM     ARCA       81.69        +7.4       1.16 

ISSUE DECLINERS               SYMBOL   EXCH   LAST PRICE   MONEY FLOW    RATIO 
                                                          (in millions) 
Apple                          AAPL    NASD      543.15       -48.4       0.95 
AT&T                           T       NYSE       30.51       -37.4       0.14 
PwrShrs QQQ Tr Series 1        QQQ     NASD       64.63       -18.8       0.63 
Bank Of America                BAC     NYSE        8.09       -15.3       0.65 
ExxonMobil                     XOM     NYSE       86.67       -15.1       0.48 
Ford Motor                     F       NYSE       12.66       -14.8       0.61 
Select Sector SPDR-Finl        XLF     ARCA       14.88       -14.6       0.47 
Chevron                        CVX     NYSE      109.63       -13.2       0.53 
Merck                          MRK     NYSE       38.00       -12.0       0.39 
Caterpillar                    CAT     NYSE      114.75       -11.1       0.65 
Gannett                        GCI     NYSE       14.99       -10.8       0.08 
US Steel                       X       NYSE       27.86       -10.6       0.44 
SPDR Gold Tr                   GLD     ARCA      166.03        -9.8       0.91 
Freeport McMoran               FCX     NYSE       42.99        -9.8       0.64 
McDonald's                     MCD     NYSE       99.35        -9.8       0.43 
JPMorgan Chase                 JPM     NYSE       39.82        -9.7       0.75 
Kraft Foods                    KFT     NYSE       38.08        -8.5       0.26 
Wal-Mart Stores                WMT     NYSE       59.26        -7.7       0.65 
Philip Morris Intl             PM      NYSE       83.23        -7.6       0.44 
Hewlett-Packard                HPQ     NYSE       25.46        -7.5       0.55

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52 Week Highs and Lows

NYSE

New Highs 70 

COMPANY                       SYMBOL      HIGH                VOLUME 
-------                       ------      ----                ------ 
Anheuser Busch                BUD         68.22              156,042 
Ares Cap Corp. 7% Nts         ARN         25.45                9,290 
Ares Cap Sr. Nts 2040         ARY         26.23                  300 
Assrd Grty Mun Hldg 5.6%      AGOpF       23.02                  640 
Atlas Energy                  ATLS        28.09               38,211 
Bank of America Dep pfd L     BMLpL       21.03                6,709 
Bank of America Dep pfd G     BMLpG       19.15                6,900 
BlackRock CA Municipal Tr     BFZ         15.90               19,560 
Blackrock Core Bond Tr        BHK         14.25               14,474 
BlkRk Cp High Yld Fd III      CYE         7.80                17,243 
BlackRockStrategicBond        BHD         13.89                6,335 
Bt Group                      BT          34.79               31,534 
Buckle Inc                    BKE         48.42              532,376 
CBS Corp B                    CBS         30.40              896,331 
CBS Corp A                    CBS/A       31.11                2,200 
CVS Caremark                  CVS         45.39              842,239 
Chipotle Mexican Grill        CMG         392.58              28,961 
Church & Dwight               CHD         48.20              193,710 
Cytec Indus                   CYT         61.79              189,946 
DWS Hi Incm Opps Fd           DHG         16.02               15,830 
Diageo PLC                    DEO         96.55               62,236 
Ecopetrol                     EC          59.01              135,396 
Edison Intl                   EIX         44.50              930,154 
Express                       EXPR        24.37               68,751 
Foot Locker                   FL          29.50              309,790 
Gap Inc                       GPS         26.00            7,882,631 
Gruma ADS                     GMK         9.84                14,991 
HSBC USA $2.8575 pfd.         HBApZ       48.95                  425 
John Hancock Pfd Inc III      HPS         18.99               26,189 
IHS Inc                       IHS         94.90               30,904 
ITT Corp.                     ITT         25.59              806,320 
InterCont Hotels Grp          IHG         23.16               26,199 
InterXion Holding             INXN        17.16               33,735 
Invesco Qlty Mun Inco         IQI         14.20               10,811 
Invesco VK PAValMun           VPV         14.89               15,511 
Just Energy Group             JE          13.00                7,159 
Kayne Andrsn Midstr Engy      KMF         27.03               19,644 
Kennametal                    KMT         47.22              152,317 
Kenneth Cole                  KCP         16.19              211,037 
Kilroy Realty                 KRC         44.37              123,889 
Las Vegas Sands               LVS         56.44            1,460,944 
Lowe's Cos                    LOW         28.59            1,712,192 
MFS Invest Grade Muni         CXH         10.83                3,913 
Mindray Med Intl ADS          MR          31.46              147,314 
Nike Inc                      NKE         108.89             175,595 
Nuveen CA Div Fnd             NAC         15.28               18,619 
Nuveen CA Muni Mkt            NCO         15.95                7,127 
Nuveen California Select      NVC         16.47               14,682 
Nuveen Ins CA                 NXC         14.91                1,706 
Nuveen Mich Premium Inc       NMP         15.00                6,623 
Nuveen NY Muni Value Fund     NNY         10.24                4,227 
PVH Corp.                     PVH         86.33               68,102 
Plains All Amer Pipeline      PAA         83.11               23,256 
PPLUS 7.75% TRUCss QWS-1      PKH         25.80                  400 
Pretium Resources             PVG         18.30               20,882 
Public Storage Pfd Q          PSApQ       29.06                4,164 
QR Energy                     QRE         23.33               23,459 
Sally Beauty Hldgs            SBH         23.95               58,697 
Targa Resources Partners      NGLS        42.77               14,341 
Telus Corp                    TU          57.96               33,300 
Tempur-Pedic                  TPX         79.88              150,167 
Thai Fund Inc                 TTF         15.05                8,100 
Toro Co                       TTC         68.62               38,676 
Ultrapar Participaco          UGP         22.91              162,554 
Under Armour A                UA          90.00              106,161 
Wstrn Asset Gl Def Opp Fd     GDO         19.31                5,030 
Western Asset Income Fd       PAI         14.95               10,225 
Williams Cos                  WMB         30.55            1,152,505 
Wyndham Worldwide             WYN         44.80              178,279 
YUM! Brands                   YUM         66.65              222,073 

New Lows 4 

COMPANY                       SYMBOL      LOW                 VOLUME 
-------                       ------      ----                ------ 
DigitalGlobe                  DGI         13.49              401,642 
Dynegy                        DYN         1.27               147,497 
Oxford Resource Ptrs          OXF         8.60               150,882 
STR Holdings Inc.             STRI        7.06                43,239

NASDAQ

New Highs 28 

COMPANY                       SYMBOL      HIGH                VOLUME 
-------                       ------      ----                ------ 
Anika Therapeutics            ANIK        12.41               49,406 
Apple                         AAPL        548.21           5,850,980 
Arctic Cat                    ACAT        37.50               25,055 
Boston Priv Fincl Hldgs       BPFH        9.65                33,633 
Boston Private Fnl Hld Wt     BPFHW       4.13                   100 
Chefs' Warehouse              CHEF        21.48               18,524 
ClickSoftware                 CKSW        11.10               26,663 
Fastenal Co                   FAST        53.01              179,294 
Furiex Pharmaceuticals        FURX        19.68               34,347 
Jive Software                 JIVE        22.50              166,973 
Landstar System               LSTR        54.76               91,385 
Liberty Global  Cl A          LBTYA       50.95              123,537 
Liberty Global  Cl C          LBTYK       48.70               27,769 
lululemon athletica           LULU        68.40              420,773 
Mattel Inc                    MAT         32.89              310,623 
McGrath RentCorp              MGRC        33.35               59,514 
Mid-Con Engy Ptrs L.P. Un     MCEP        24.34               13,550 
NASDAQ Prem Inc & Growth      QQQX        15.44               15,962 
Performance Techs             PTIX        2.43                19,227 
Perrigo Co                    PRGO        105.42             301,834 
Provident Fincl Hldgs         PROV        10.86                4,800 
Ross Stores                   ROST        54.27              340,970 
SLM CPI-Lnkd Md Trm Nts A     OSM         23.50                2,050 
Steven Madden                 SHOO        44.36              123,285 
Texas Capital Bancshares      TCBI        34.56               27,981 
US Home Systems               USHS        14.52               99,533 
ViewPoint Fincl Group         VPFG        15.27               12,019 
Zumiez                        ZUMZ        33.84              215,936 

New Lows 12 

COMPANY                       SYMBOL      LOW                 VOLUME 
-------                       ------      ----                ------ 
Amyris                        AMRS        5.25                82,929 
Capital City Bank Group       CCBG        7.84                 9,796 
Digital Generation            DGIT        9.95                62,599 
Electronic Arts               EA          16.18            1,700,015 
Energy Recovery               ERII        2.02                95,709 
EnerNOC                       ENOC        7.59               107,905 
iSh Barclays GNMA Bd Fd       GNMA        49.93                  450 
Marshall Edwards              MSHL        0.85                 5,200 
OPNET Techs                   OPNT        28.39               15,726 
Spherix                       SPEX        0.78                 7,514 
TeleNav                       TNAV        6.56                23,736 
Trius Therapeutics            TSRX        4.98                40,919

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Keystone XL Pipeline Likely to Raise Gasoline Prices

Source

The proposed 1,700-mile Keystone XL pipeline will not make the US more energy independent nor will it lower gasoline prices. If anything, the pipeline from western Canada’s oil sands to the US Gulf Coast will raise gasoline prices for many US drivers. A consultant for TransCanada Corp. (NYSE: TRP) estimates that the pipeline will raise the price of gasoline by $0.04/gallon on average in the US.

Drivers won’t be the only ones affected. Canadian producers like Exxon Mobil Corp. (NYSE: XOM), Suncor Energy Inc. (NYSE: SU), Cenovus Energy Inc. (NYSE: CVE), and others will gain a substantial price hike on Canadian crude. We noted this when TransCanada announced a couple of days ago that it would go ahead with a plan to build a 423-mile section of the pipeline from Cushing, Oklahoma, to Port Arthur, Texas.

Refiners like Marathon Petroleum Corp. (NYSE: MPC) and HollyFrontier Corp. (NYSE: HFC), which currently benefit from their ability to get the cheaper oil from Canada, will take a substantial hit on prices. We wrote about this yesterday.

The reason for the higher prices is pretty basic: the Canadian oil is curretnly essentially stranded and was priced at an average discount to Brent crude of about $23.50/barrel in 2011. Moving Canadian oil to the Gulf Coast where prices are higher will not lower the price of Brent crude unless the new oil more than replaces the existing supply. The Gulf Coast imports around 5 million barrels/day and the Keystone XL pipeline and a couple of other pipelines proposed to move oil south from Cushing to the coast will transport less than 1.5 million barrels/day if and when all the current plans are realized.

The effect will be to raise the price of Canadian crude everywhere, including the Midwest and the Rocky Mountain regions, where Marathon and HollyFrontier do their refining. Their feedstock costs will rise and the price for their refined products will also rise.

Energy industry consultant Philip Verleger told Bloomberg News:

The Canadian plan [for the Keystone XL pipeline] was to use their market power to raise prices in the United States and get more money from consumers.

Verleger estimates that gasoline prices will rise $0.10-$0.20 a gallon in the Midwest and Rocky Mountain regions.

The Keystone XL pipeline is far from a free lunch. It will not make the US any more energy independent and it certainly will not lower gasoline prices. If US drivers continue to drive less, then Canadian oil will reduce the amount of oil imported to the US and help with the US trade balance. That’s a good thing, but is it enough?

Paul Ausick

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Wal-Mart Hikes Their Dividend Again

“Wal-Mart Stores, Inc. (NYSE: WMT) is a member of our own 2012 Model Dividend Portfolio and now we are again seeing why that is.  The stock chart has been in trouble since its last earnings warning, but Wal-Mart is trying to compensate with yet another raised dividend rate.

The new annualized dividend will be $1.59 per share, which represents a 9% hike to the payout from the previous rate of $1.46 per share on an annualized basis.  The new rate will be paid to shareholders in four quarterly payments of $0.3975 per share…”

Full article

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THE TREASURY YIELDS/CREDIT SPREADS DIVERGENCE IS NOT SUSTAINABLE

Source

By Walter Kurtz, Sober Look

There is a great deal of discussion in the market about the dislocation between US equities and treasuries. It is somewhat surprising that people are only now starting to focus on the issue – the divergence has been visible for quite some time andwas discussed here.

But another divergence which is quite striking exists now between corporate bond spreads and treasury yields. The chart below compares the investment grade CDX (index CDS) with the 10-year treasury yields.

 

The treasury market continues to trade with a built in “Europe risk premium“. Some managers hold treasuries as a hedge against European surprises – a strategy that has worked quite well recently (as opposed to equity index puts). But this divergence is not sustainable in the long term and treasury yields should startrising later this year.

For related content see here:

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SHOCK: Andrew Breitbart Has Passed Away

They are saying he died from “natural causes” at the age of 43. WTF is that supposed to mean? How does one die from “natural causes” at 43?

He was just tweeting 6 hours ago. They said he died shortly after midnight; but these tweets happened after 3am?!

UPDATE: Nevermind, he lived in California. Therefore, he must have died right after that tweet below.

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Put Some Junk in Your Trunk: Morningstar: How to Invest Safely in Junk Bonds

“Individual investors have become enamored with high-yield (junk) bonds lately, seeking to better the puny yields offered by Treasury and investment-grade corporate bonds.

Indeed, junk bond mutual funds have seen a net inflow of $6.1 billion in January and almost $17 billion over the past year, Morningstar reports.

With the economy rebounding, investors are growing more confident that junk bond issuers won’t default. Junk bond funds have offered a return of 5.2 percent so far this year.

“High-yield bond funds do offer the potential for higher returns than high quality bonds and may be used to complement core bond funds with lower risk profiles,” Morningstar editor Adam Zoll writes.

But he warns that junk bonds can plunge, just like they did during the financial crisis, dropping 26 percent in 2008.

Morningstar recommends three funds for their high returns and low risk: Vanguard High-Yield Corporate (ticker: VWEHX), Janus High-Yield (JNHYX), and Metropolitan West High Yield Bond (MWHYX)….”

Read more: 

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