Random Thoughts II
1. The fact that Donald Trump is tied for first in the early Republican polls does not bode well for 2012. It simply highlights the fact that they don't have any legit candidates with enough name recognition to get off the ground.
2. The theme of earnings season will be to beat expectations on the bottom line and manage to disappoint on either outlook or revenues.
3. The last recession was pretty US-centric. There were a lot of strange mortgage-related assets that collapsed like a bad souffle and caused a financial crisis and recession. I don't think the next recession will be nearly so US-centric. Europe has issues. Asia has issues. The US has issues. Next time around it is going to be much more global.
4. The market responded positively today to the idea of cutting the deficit. The upcoming debt ceiling vote should be a good thing based on that - because we'll end up getting some cuts. It's the Tea Party vs Obama in a game of chicken. Obama has to back out of that one. The Tea Party has that look of someone who's perfectly willing to die vs back down. There's no way around it - Obama has to bail out of it and give up some spending cuts. He can't risk an all out head-on.
5. There are quite a few US Companies that marched right on through the last recession making profits and doing just fine. They aren't getting all that much attention these days. Sooner or later there will be another recession and they'll get some attention. I'd guess sooner rather than later.
6. You don't hear it discussed much on either side, but a big reason for Social Security and Medicare's shortages is that the jobs got shipped out of the country. There are no Social Security taxes paid on wages of Chinese workers. There aren't any Social Security taxes paid on the profits the fatcat got for firing the $20/hr American and hiring the $2/hr Chinese replacement.
7. As a matter of fact shipping the jobs out of the country is the reason for the deficit to a large extent. The $20/hr American worker paid ordinary income taxes on the $20. The fatcat pays capital gains/dividends taxes on the $18/hr savings (if he pays anything). That's a significant loss of revenue.
8. Gold should be taxed. I don't mean when you sell it. I mean just for holding it. My house is taxed. My car is taxed. There is no reason gold shouldn't be taxed too.
9. Political instability seems to be increasing around the world right now. It seems to be increasing in the US as well.