If there are no changes to current law, 2013 promises to bring a big wave of fiscal tightening.
This is due to the fact that spending cuts are kicking in at the same time that the Bush tax cuts are due to expire.
According to a chart from Nomura, it's theoretically possible that fiscal contraction could knock 5% off of GDP.
But at least then we'll be cutting the debt, right?
Not so!
A chart in Richard Koo's latest monster presentation shows what happened in Japan when they tried fiscal consolidation during their long balance sheet recession.
Both times the economy got dramatically worse, and the deficit EXPANDED. Not only did things get bad, but the theoretical benefit didn't happen either.
Figuring out a way to defuse the 2013 fiscal bomb is critical.
******************************************************************************
This is an addition to the previous chart, showing the tax rate increases.
This chart from Strategas Research, posted by Jim Pethokoukis, puts the hikes into some very helpful context.
The potential fiscal drag is 3.5% of GDP, vastly more than any other previous tax hike, and bigger than the last 6 combined.
*******************************************************************************
And now it's time for a laugh...
We always hear 'the rules'
From the female side
Now here are the rules from the male side.
These are our rules!
Please note.. these are all numbered '1 '
ON PURPOSE!
1. Men are NOT mind readers.
1. Learn to work the toilet seat.
You're a big girl. If it's up, put it down.
We need it up, you need it down.
You don't hear us complaining about you leaving it down.
1. Sunday sports It's like the full moon
or the changing of the tides.
Let it be.
1. Crying is blackmail.
1. Ask for what you want.
Let us be clear on this one:
Subtle hints do not work!
Strong hints do not work!
Obvious hints do not work!
Just say it!
1. Yes and No are perfectly acceptable answers to almost every question.
1 Come to us with a problem only if you want help solving it. That's what we do.
Sympathy is what your girlfriends are for.
1. Anything we said 6 months ago is inadmissible in an argument.
In fact, all comments become null and void after 7 Days.
1. If you think you're fat, you probably are.
Don't ask us.
1. If something we said can be interpreted two ways and one of the ways makes you sad or angry, we meant the other one
1. You can either ask us to do something
or tell us how you want it done.
Not both.
If you already know best how to do it, just do it yourself.
1. Whenever possible, Please say whatever you have to say during commercials.
1. Christopher Columbus did NOT need directions and neither do we.
1. ALL men see in only 16 colors, like Windows default settings.
Peach, for example, is a fruit, not A color. Pumpkin is also a fruit. We have no idea what mauve is.
1. If it itches, it will be scratched..
We do that.
1. If we ask what is wrong and you say 'nothing,' We will act like nothing's wrong.
We know you are lying, but it is just not worth the hassle.
1. If you ask a question you don't want an answer to, Expect an answer you don't want to hear.
1. When we have to go somewhere, absolutely anything you wear is fine... Really.
1. Don't ask us what we're thinking about unless you are prepared to discuss such topics as baseball or motor sports.
1. You have enough clothes.
1. You have too many shoes.
1. I am in shape. Round IS a shape!
1. Thank you for reading this.
Yes, I know, I have to sleep on the couch tonight.
But did you know men really don't mind that? It's like camping.
********************************************************************************
This is a few days old but I'm glad my tax dollars are paying for these jokers.
Jeffrey Neely, one of the embattled General Services Administration executives at the center of the agency's wasteful spending scandal, refused to testify in Congress today about a $822,751 Las Vegas training conference that he helped plan.
Invoking his 5th Amendment right against self-incrimination, Neely declined to comment on the lavish conference, which featured a mind-reader, a clown, commemorative coin giveaways, and a strange award ceremony in which he mocked President Barack Obama. Neely was placed on administrative leave this month after a scathing report from the GSA's inspector general revealed the excesses at the conference, and is now facing a possible criminal investigation into his activities at the GSA, according to the Washington Post.
ABC's Jake Tapper may have stumbled upon the reason behind Neely's silence. Earlier this afternoon, Tapper reported on a trove of photos from two of six pre-conference "planning trips" to Las Vegas on Neely's wife Deborah's Google Plus page. show the GSA executive living it up in a fancy suite at Las Vegas' M Resort Spa & Casino.
********************************************************************************
Santiago Capital has put together a concise and highly informative 10 minutes video, which explains in the amount of time that a traditional economics professor takes to prepare their coffee, virtually everything that is at risk, and fundamentally flawed, with the current monetary system. While this presentation will not be news to regular readers, we suggest it is watched with recent revelations elsewhere (certainly not here: this has been the default assumption here since day one), that it is flow, not stock that matters to price formation. Which means the exponential curve discussed below will only get ever steeper to asymptote, if the true purpose of the Fed is simply to ramp stocks come hell or high water, in its artificial pursuit of "price stability."
View Video
********************************************************************************
While it is not unusual for everyone's favorite truth-seeker in Chicago to cut to the chase and simplify the over-complex world of data and nuance that is thrust upon us day after day, CNBC's Rick Santelli outdoes himself today. Initially addressing the retail sales and housing data dichotomy, Rick jumps above the noise of day-to-day data and focuses on what is critical - in his view - the weather and the debt. If only he had used the term "It's the debt stupid" as it would have made for better headlines but the clip below should help anyone and everyone decide on whether this dip is for buying or fading/waiting. In the end, Santelli notes, "It is simple. There are questions about weather and questions about debt. First one we'll know more about in the next two or three months. [For the] latter, we'll have to look toward our neighbors in Europe to see how it ultimately turns out and see if our political class is going to do a better job than the European bureaucracies."
********************************************************************************
No comments:
Post a Comment