1. Energy and Basic Materials
"Commodity stocks should be the first ones to rally," says Bruce Bittles, chief investment strategist at R.W. Baird. A reviving economy needs more raw materials and energy.
Some of these stocks already have rallied. The Standard & Poor's energy sector as a whole is down 7% in 2009, but a recent rally has put the oil and gas drilling industry up 19% for the year. Materials stocks are up 16.5% in the past week.
But commodities markets are not infallible. Oil prices hit a record peak last year just a few months before the world economy slipped into recession. Gary Wolfer, chief economist at Univest Wealth Management (UVSP), calls the commodities and energy rebound a "false start." In areas like natural gas, for example, Wolfer attributes the bounce-back not to the economic recovery but to "production finally being brought in line with demand."
...
"OK, George. By now you know I often have a different take on things than your average "Joe", or "Economist", or "Wall Street Type" so with this you can also add to that list that I have a different take on Social Security than your average "Government Statistician" or "Elected Official".
The entire thingamajig about Social Security and Medicare running out of money is such and such a year is just a CHARADE!!
The way Social Security and Medicare work is that they "tax" at a rate that is HIGHER than their current payouts. And where do they put that "extra" tax that they collect? Well they "BUY" US Treasury Bonds.
Is there really a "Savings" that is occurring when those "excess" funds are used to buy the bonds? HECK NO!!
What in reality is happening is that the excess Social Security and Medicare tax collections that are not being spent immediately on those programs are being sent over to the general budget to be SPENT IMMEDIATELY on general government programs !!
The ONLY "theoretical" way that the US Government could ever pay back those "paper savings" for future Social Security or Medicare payments is by RAISING THE GENERAL TAX RATE at sometime in the future!!
If you ever happen to take a look at the numbers as to how much they will have to raise the tax rates to "repay" those bonds they are STUPENDOUS!! I forget the actual amount at the moment, but it would require something like an overall INCOME tax hike of 30% or more as I recall. Is that going to EVER happen? HECK NO!!
What these programs really are is a PAY AS YOU GO system ... with a neat little SCAM built in. OVERTAX the lower earning workers so that their overall EFFECTIVE tax rate is higher, often MUCH higher, than those who make a lot more money.
With Social Security and Medicare THERE IS NO SAVINGS FUND!! All there is to back up the Bonds is an "ASSUMPTION" that the US Government is going to raise the Income Tax Rates quite dramatically in the future when it comes time to pay off those bonds (which is never going to happen).
ANY increase in the Social Security or Medicare taxes so as to "Save the system" is really no such thing, it is just a Back Door Income Tax Increase on the lower income WORKERS in the country (remember these taxes do NOT apply to non-workers income, ie: interest, dividends, capital gains etc.) since the money being collected is being immediately spent for general government expenses.
Shoot maybe I can start my own private Social Security System. I can issue you bonds forever, well at least as long as I live. You just keep sending me money every month. I promise you I will pay you back with interest in 60 years!!! (long after I am dead!! and can no longer work) . I promise. I promise. I promise. "
...
Selling California
Psst! Wanna buy a prison? How about San Quentin? This is just one of the real estate pieces being considered for sale as California tries to make budget ends meet. Even the old Cow Palace in Daly City (if you know the way to San Jose from SF) may go. Damn. 'Course it's not bad until the governor's mansion is sold off and Arnold starts operating out of Motel Six...but the problems aren't going away quickly, so stick around a year or two.
No comments:
Post a Comment