I've been reading about the so-called "Washington Hit List" in which the new administration is trying to discredit anyone criticizing Predisent Obama's policies. Okay while I understand the petty barbs between Democrats and Republicans, I was shocked to see Jim Cramer's name. First of all I have to admit I am a closet Cramer fan. I owe a couple of his books and at one point actually watched his show "Mad Money" (I still am amazed at Jim's knowledge of so many stocks and industries). It has changed in the past few years and the new style is not for my liking.
That being said Mr. Cramer has made some good points in his criticism of the administration. In Mr. Cramer's rebuttal to the "Hit List" he states:
Look at the incredible decline in the stock market, in all indices, since the inauguration of the president, with the drop accelerating when the budget plan came to light because of the massive fear and indecision the document sowed: Raising taxes on the eve of what could be a second Great Depression, destroying the profits in healthcare companies (one of the few areas still robust in the economy), tinkering with the mortgage deduction at a time when U.S. house price depreciation is behind much of the world's morass and certainly the devastation affecting our banks, and pushing an aggressive cap and trade program that could raise the price of energy for millions of people.
All this seems pretty reasonable to me. He is pretty much summing up aht every other economist / strategist not employed by the White House is saying. There is nothing out of the ordinary here. Where Mr. Cramer differs is that he talks passionately in what I call "market speak". He goes on, in "market speak" to state:
But Obama has undeniably made things worse by creating an atmosphere of fear and panic rather than an atmosphere of calm and hope. He's done it by pushing a huge amount of change at a very perilous moment, by seeking to demonize the entire banking system and by raising taxes for those making more than $250,000 at the exact time when we need them to spend and build new businesses, and by revoking deductions for funds to charity that help eliminate the excess supply of homes.
We had a banking crisis coming into this regime, but now every area is in crisis. Each day is worse than the previous one for this miserable economy and while Obama's champions cite the stimulus plan, it's really just a hodgepodge of old Democratic pork and will not create nearly as many manufacturing or service jobs as we hoped. China's stimulus plan is the model; ours is the parody.
So while his peers speak in terms of "slower growth" or "continued risk to the economy" Mr. Cramer personalizes his attack. While I have no issue with this approach it appears the White House does. Press Secretary Robert Gibbs took issue with Cramer on the Today Show and other venues last week. I simply ask to what end?
The reality is that some of the mistakes being made by this administration are the same ones we can trace back throughout history to Japan or the Great Depression. If we don't change our path I am worried that history is about to repeat itself. The warm fuzzy feeling I once had has now turned into one of uncertainty and nervousness about the direction we are going. Apparently I am not alone. The S&P just hit 680 - down 25% year to date.
Thursday, March 5, 2009
Tuesday, March 3, 2009
The Market Is Catching Up To Expectations
Well this is sort of an unpleasant update as the S&P now has a "6" handle in front of it. It would appear that the market is quickly (actually at lightening speed would be more accurate) moving to reflect the current conditions in the world. I had talked about this in my first post. The "Obama-mania" was still holding strong and eurphoria about the latter half of 2009 was the consensus. Oh have times changed in the first couple of months of this year. The S&P is now down 23% year to date.
What has changed?
1) Chinese GDP numbers are coming down below the 8% target, albeit slowly.
2) The global banking system is still in disarray. I would suggest Geithner is clearly part of the problem and not capable of being part of the solution.
3) Equity markets do not like uncertainty and this is what we have. The line of "we don't want to nationalize" is getting old. The Government is embarking on a form of creeping nationalization. Whether is be Citi, B of A or any of the weaker regionals. All I know is that the government's stake continues to rise while the equity price continues to fall.
4) The market is beginning to realize that the concept of funding insolvent institutions with taxpayer money is NOT A GOOD IDEA. My guess is we will see a few major bankruptcies in 2009. These institutions will have received TARP (or TRAP) money and it will be lost. This could have been used to help banks that were solvent maintain strong balance sheets. Zombie banks are here to stay.
5) European banks are worse. Watch for more commentary on loans to Eastern Europe. This will not end well as leverage here was higher than in the US. This is a systemic risk. The belief that the German's will save everyone is a little far fetched. The problem is just too large.
6) The US Fiscal Stimulus is the first step toward socialism. We heard lots of talk about infrastructure rebuilding etc. Where was it in the final bill? Ok there is about $100 billion to infrastructure but this bill is to be spent over 11 year and will not contribute meaningfully to the economy when it is needed most.
7) The Great Depression and the Japanese lost decade both had ill timed tax inceases which further supressed consumer spending. The US is heading in this direction right now. Take a look at how the carbon cap and trade system will work. Investors know that in 2011 there will be a large tax increase for everyone. Markets don't like tax increases.
Really there has been no "good" news in the past month or so and in fact the rate of decline has accelerated. We need to watch how governments around the world move to solidify the financial system. This will go a long way in to determining if we make the same mistakes that the Japanese did. History has a way of repeating itself ... don't forget the "Lost Decade".
What has changed?
1) Chinese GDP numbers are coming down below the 8% target, albeit slowly.
2) The global banking system is still in disarray. I would suggest Geithner is clearly part of the problem and not capable of being part of the solution.
3) Equity markets do not like uncertainty and this is what we have. The line of "we don't want to nationalize" is getting old. The Government is embarking on a form of creeping nationalization. Whether is be Citi, B of A or any of the weaker regionals. All I know is that the government's stake continues to rise while the equity price continues to fall.
4) The market is beginning to realize that the concept of funding insolvent institutions with taxpayer money is NOT A GOOD IDEA. My guess is we will see a few major bankruptcies in 2009. These institutions will have received TARP (or TRAP) money and it will be lost. This could have been used to help banks that were solvent maintain strong balance sheets. Zombie banks are here to stay.
5) European banks are worse. Watch for more commentary on loans to Eastern Europe. This will not end well as leverage here was higher than in the US. This is a systemic risk. The belief that the German's will save everyone is a little far fetched. The problem is just too large.
6) The US Fiscal Stimulus is the first step toward socialism. We heard lots of talk about infrastructure rebuilding etc. Where was it in the final bill? Ok there is about $100 billion to infrastructure but this bill is to be spent over 11 year and will not contribute meaningfully to the economy when it is needed most.
7) The Great Depression and the Japanese lost decade both had ill timed tax inceases which further supressed consumer spending. The US is heading in this direction right now. Take a look at how the carbon cap and trade system will work. Investors know that in 2011 there will be a large tax increase for everyone. Markets don't like tax increases.
Really there has been no "good" news in the past month or so and in fact the rate of decline has accelerated. We need to watch how governments around the world move to solidify the financial system. This will go a long way in to determining if we make the same mistakes that the Japanese did. History has a way of repeating itself ... don't forget the "Lost Decade".
Saturday, February 28, 2009
Spring Training - My Ray Of Hope
Well sitting up doing some research tonight. I think I have officially exceeded my self-imposed 7 cups of coffee daily limit. There has been some great research on coffee released in the past couple of months including one study claiming that you were 30% more likely to hallucinate if you exceeded 7 cups of java per day. Hence my 7 cup limit. I would encourage readers to hop over to http://www.7cupsofcoffee.blogspot.com/ to get more insight not only on coffee, random facts but also the economy and specifically technology.
After all the market crap we are dealing with I am glad to have spring training started. I have to give Apple and MLB.com credit. They have a great app for the iPhone where I can watch clips of every game (almost in real time). This year they have added the feature to be able to listen to any MLB game from the voice of either the home or away announcer. This will certainly make it easier to keep up with the Red Sox.
Speaking of the Sox there have been a few good things going on this week. First of all Jon Lester appears to be continuing his development. He is working on a straight change or circle change. If he is able to master this by the 2nd half of the year he will almost be unhittable. This would take him to 4 pitches – fastball, cutter, curve and change. More importantly it would really be a great complement to his cutter against right handed hitters. The importance of power pitching cannot be underestimated. I am looking forward to hearing how John Smoltz is fitting in. Hopefully Lester, Matsuzaka, Buchholz and Beckett will all benefit from being around this consummate professional.
The real surprise so far clearly has to be Takashi Saito. The 39 year old has come in and appears healthy. The Boston staff has tried to slow him down to make sure he is healthy for the season but Saito looks ready to claim a roster spot. He hit 93 on the gun the other day and displayed a couple of speeds on his curve ball. This will be a welcome addition to the pen. No offense to Mike Timlin but he was just a body last year and not an effective pitcher. The pen looks solid for 2009 with Papelbon, Okajima, Delcarman, Saito and Ramirez. Not entirely sure who will round out the staff but Javier Lopez will probably be there to see spot duty and situational roles against lefties before the 8th inning.
I like what the Red Sox did in the offseason. Look reality is that the world has changed in the past 9 months (well at least to anyone except the Steinbrenners). Taking a chance on Smoltz, Baldelli and Saito seem reasonable from a risk / reward perspective. There isn't alot of money tied up. This is a win-win situation. Certainly looking forward to the season.
On a side note I officially picked up a ball last Wednesday to prepare for my season. This being season 2 since coming out of 'retirement' (I laugh because since no one knew I was gone it is hard to call it retirement). The shoulder felt the best it has in 12 years. I think my velocity will be better this year (hard to be worse than last year) and hopefully my command follows. Each at bat feels more relaxed. All in all not a bad first outing.
After all the market crap we are dealing with I am glad to have spring training started. I have to give Apple and MLB.com credit. They have a great app for the iPhone where I can watch clips of every game (almost in real time). This year they have added the feature to be able to listen to any MLB game from the voice of either the home or away announcer. This will certainly make it easier to keep up with the Red Sox.
Speaking of the Sox there have been a few good things going on this week. First of all Jon Lester appears to be continuing his development. He is working on a straight change or circle change. If he is able to master this by the 2nd half of the year he will almost be unhittable. This would take him to 4 pitches – fastball, cutter, curve and change. More importantly it would really be a great complement to his cutter against right handed hitters. The importance of power pitching cannot be underestimated. I am looking forward to hearing how John Smoltz is fitting in. Hopefully Lester, Matsuzaka, Buchholz and Beckett will all benefit from being around this consummate professional.
The real surprise so far clearly has to be Takashi Saito. The 39 year old has come in and appears healthy. The Boston staff has tried to slow him down to make sure he is healthy for the season but Saito looks ready to claim a roster spot. He hit 93 on the gun the other day and displayed a couple of speeds on his curve ball. This will be a welcome addition to the pen. No offense to Mike Timlin but he was just a body last year and not an effective pitcher. The pen looks solid for 2009 with Papelbon, Okajima, Delcarman, Saito and Ramirez. Not entirely sure who will round out the staff but Javier Lopez will probably be there to see spot duty and situational roles against lefties before the 8th inning.
I like what the Red Sox did in the offseason. Look reality is that the world has changed in the past 9 months (well at least to anyone except the Steinbrenners). Taking a chance on Smoltz, Baldelli and Saito seem reasonable from a risk / reward perspective. There isn't alot of money tied up. This is a win-win situation. Certainly looking forward to the season.
On a side note I officially picked up a ball last Wednesday to prepare for my season. This being season 2 since coming out of 'retirement' (I laugh because since no one knew I was gone it is hard to call it retirement). The shoulder felt the best it has in 12 years. I think my velocity will be better this year (hard to be worse than last year) and hopefully my command follows. Each at bat feels more relaxed. All in all not a bad first outing.
Friday, February 27, 2009
Tax The Rich What New York Can Learn From California
Did anyone catch New York mayor Michael Bloomberg this week as he blasted proposed tax increases to the top 1% of his states earners?
“One percent of the households that file in this city pay something like 50 percent of the taxes. In the city, that’s something like 40,000 people. If a handful left, any raise would make it revenue neutral,” the billionaire mayor said on his weekly radio show.
So it does raise the question will people leave? Here are a couple of articles supporting Bloomberg's assertion:
“California’s Gold Rush Has Been Reversed: Entrepreneurs are fleeing heavy taxes in the state.”
Wall Street Journal
“Exodus From California.”
National Review Online
For years we have kept hearing from the "sell side" and "buy side" alike how California continued to have positive demographics which supported home building and housing valuations. Needless to say "things were not different this time". From bank failures to foreclosures to ghost towns - California continues to crumble. The state has a $42 billion deficit (this estimate has grown from the mid teens estimate a few months ago), sports the 4th highest unemployment rate in the union and illigal immigrants are leaving in record numbers. Does anyone think this will lead to a strong housing market or banking system? Where are all those "great franchises". It would seem to me that the sheer number of banks within California has to be reduced. As with the overcapacity in housing we also have an overcapacity in banks. Either we will have too many banks fighting for too few loans and earnings will be dismal for years to come or we purge the system and get it healthy again.
Here are a few salient points on the demise of California. The bullet points presented are from a California Business Roundtable.
1. The cost of doing business in California is 30 percent higher than the western-state average.
2. Almost 40 percent of the California decision-makers participating in the Roundtable survey plan to “outsource” jobs from California to other western states, preferably Texas.
3. Half of the companies have “explicit policies to halt employment growth in California while less than five percent of companies have retention policies in place to keep jobs in California.”
4.California’s “regulatory environment is the most costly, complex and uncertain in the nation.” Regulatory costs are 105 percent higher in California than in other western states.
It appears the slippery slope to social unrest has begun. Both at the Federal and State level governments are looking to increase revenue any way possible. It is hard to see how this situation ends well. As the economy continues to unwind this year (both equity and house prices moving lower) look for business and taxpayers alike to do whatever possible to preserve their balance sheets.
Be careful New York.
“One percent of the households that file in this city pay something like 50 percent of the taxes. In the city, that’s something like 40,000 people. If a handful left, any raise would make it revenue neutral,” the billionaire mayor said on his weekly radio show.
So it does raise the question will people leave? Here are a couple of articles supporting Bloomberg's assertion:
“California’s Gold Rush Has Been Reversed: Entrepreneurs are fleeing heavy taxes in the state.”
Wall Street Journal
“Exodus From California.”
National Review Online
For years we have kept hearing from the "sell side" and "buy side" alike how California continued to have positive demographics which supported home building and housing valuations. Needless to say "things were not different this time". From bank failures to foreclosures to ghost towns - California continues to crumble. The state has a $42 billion deficit (this estimate has grown from the mid teens estimate a few months ago), sports the 4th highest unemployment rate in the union and illigal immigrants are leaving in record numbers. Does anyone think this will lead to a strong housing market or banking system? Where are all those "great franchises". It would seem to me that the sheer number of banks within California has to be reduced. As with the overcapacity in housing we also have an overcapacity in banks. Either we will have too many banks fighting for too few loans and earnings will be dismal for years to come or we purge the system and get it healthy again.
Here are a few salient points on the demise of California. The bullet points presented are from a California Business Roundtable.
1. The cost of doing business in California is 30 percent higher than the western-state average.
2. Almost 40 percent of the California decision-makers participating in the Roundtable survey plan to “outsource” jobs from California to other western states, preferably Texas.
3. Half of the companies have “explicit policies to halt employment growth in California while less than five percent of companies have retention policies in place to keep jobs in California.”
4.California’s “regulatory environment is the most costly, complex and uncertain in the nation.” Regulatory costs are 105 percent higher in California than in other western states.
It appears the slippery slope to social unrest has begun. Both at the Federal and State level governments are looking to increase revenue any way possible. It is hard to see how this situation ends well. As the economy continues to unwind this year (both equity and house prices moving lower) look for business and taxpayers alike to do whatever possible to preserve their balance sheets.
Be careful New York.
Recent Economic Data ... UGLY
It's been about a week since a real post. Far too long for my millions and millions of my readers. Sometimes it is good to poke fun at oneself as it pulls you away from the desperate times we are all facing.
Homes Sales
US data for January certainly dashed all hopes that housing activity had found a bottom. I spoke to a couple of people (unnamed for their own good) who were challenging my collegue JJ's questioning the bottom that they were touting. From my recallection these are the same people that use 9 recessions (all post WWII) to establish trends such as duration and magnitude of this recession. Anyway existing home sales fell, the application for purchase index fell, new home sale fell and as such month of inventory rose. All this means prices have much further to drop. This will not be good for growth as it will continue to drive savings rates back to trend levels to compensate for the drop in net worth. I expect we will see US savings rates above 10% before we are done this deleveraging process.
Mortgage Rates
The 30 year mortgage has moved back to around 5% (4.99% last week). Even though mortgage applications have been volatile it appears that approximately 70% of new apps are to refinance at lower rates or lock in a variable rate product at an attractive rate. The remaining 30% are primarily bargain hunters looking for distressed / foreclosed situations. It would appear that prices have to fall to a point where the buyer can purchase a property, rent it and make a profit. In asset bubbles the "make a profit" point is lost as the mania has investors believing that "it is different this time" and that prices will rise for ever. We forget Finance 101 which taught us Cash is King.
This buy or rent scenario leads me to an interesting point. In overbuilt areas with foreclosures rising there would appear to be a flood of rental properties hitting the market. Wouldn't this push down rental prices (simple supply and demand) and therefore lowering what an investor would be willing to pay? Therefore the bottom in housing prices in these areas may be lower than we think. Be wary of the stress tests!!!!!
Bond Holders
Is anyone else entirely tired of Bill Gross at Pimco crying about his financial holdings? Why shouldn't the bond holder take a haircut just like the equity holder? The assertion that this can't happen is ridiculous. Of the "bondies" that I know I would argue they are more technical than the majority of my equity friends. They know exactly what they were doing here. About half of the liabilities of of Citi, B of A and JPM are funded out of the bond market. Why should the US taxpayer subsidize $1.5 trillion of debt if the deposits at these institutions are to be protected? The burden on the US citizen clearly continues to escalate.
The problem for governments across the world isn't necessarily Mr. Gross's voice but it is the voice of all the pension funds, insurers and money market funds heavily invested in financial service bonds. To wipe out equity holders is one thing but to wipe out pensions via bond default is another. It equates to systemic risk to the system. I guess we should not lose sight of the Great September Debaucle that was Lehman Brother and that the US relies on foreign institutions both public and private as a source of funding. Who says this isn't political???
As far a pension funds go, I look forward to how actuarial assumptions are about to change in our low interest rate environment. Won't pensions have to take more risk in order to meet future obligations? I read this as equity investments. Yikes. Have fun at those investment committee meetings.
Durable Goods
Just plain aweful. The main point to take out of the data is the weakness in both imports and exports. Global it is. Here is a look across the world:
Imports Exports
Germany -3.6% -7.3%
U.K. -5.9% -5.5%
Japan -31.7% -45.7%
Taiwan -56.5% -44.1%
I could go on but you get the point. This leads me to GDP revisions as I cannot see this trend ending any time soon.
GDP Revision
I'll say sorry in advance for the rant you are about to witness. Government statisitical data is a complete joke. If you, the investor, do not take the time to look into what inputs they have used and how they are calculated it is your own fault for not understanding the magnitude and seriousness of the mess we are in. While GDP has its problems my prime target is the Birth/Death Ratio in the employment numbers. One just has to look up what this plug figure is to "get" while at economic turns (either positive to negative or vice versa) or when the rate of change or slope gets steeper it either understates (going from negative to positive) or in our case has overstated (both steep slope and positive to negative change) the strength of US employment.
Back to the GDP revision. As seen above the global consumer is retrenching. It should be no surprise that the consumer spending component of GDP was revised lower and inventories were revised higher. This should lead to lower prices going forward as inventory levels are too high and need to be reduced. The price reductions we have seen should get more aggressive. It will be interesting to see at what price the consumer steps in?
Unemployment
Weekly claims continue to trend higher. News of layoffs continue - read any paper around the world to get a flavor. Not a good trend. This should push the official unemployment number. Lets not forget how interconnected this number is. Higher inventory levels will lead to more layoffs. Psychologically if a consumer is concerned of losing a job they will be less inclined to purchase anything (house, car, clothes etc) and dramatically increase their savings rate and pay down debt. The trend is not our friend.
To quote Dave Rosenberg from Merrill "...any rally is to be rented and not bought".
Homes Sales
US data for January certainly dashed all hopes that housing activity had found a bottom. I spoke to a couple of people (unnamed for their own good) who were challenging my collegue JJ's questioning the bottom that they were touting. From my recallection these are the same people that use 9 recessions (all post WWII) to establish trends such as duration and magnitude of this recession. Anyway existing home sales fell, the application for purchase index fell, new home sale fell and as such month of inventory rose. All this means prices have much further to drop. This will not be good for growth as it will continue to drive savings rates back to trend levels to compensate for the drop in net worth. I expect we will see US savings rates above 10% before we are done this deleveraging process.
Mortgage Rates
The 30 year mortgage has moved back to around 5% (4.99% last week). Even though mortgage applications have been volatile it appears that approximately 70% of new apps are to refinance at lower rates or lock in a variable rate product at an attractive rate. The remaining 30% are primarily bargain hunters looking for distressed / foreclosed situations. It would appear that prices have to fall to a point where the buyer can purchase a property, rent it and make a profit. In asset bubbles the "make a profit" point is lost as the mania has investors believing that "it is different this time" and that prices will rise for ever. We forget Finance 101 which taught us Cash is King.
This buy or rent scenario leads me to an interesting point. In overbuilt areas with foreclosures rising there would appear to be a flood of rental properties hitting the market. Wouldn't this push down rental prices (simple supply and demand) and therefore lowering what an investor would be willing to pay? Therefore the bottom in housing prices in these areas may be lower than we think. Be wary of the stress tests!!!!!
Bond Holders
Is anyone else entirely tired of Bill Gross at Pimco crying about his financial holdings? Why shouldn't the bond holder take a haircut just like the equity holder? The assertion that this can't happen is ridiculous. Of the "bondies" that I know I would argue they are more technical than the majority of my equity friends. They know exactly what they were doing here. About half of the liabilities of of Citi, B of A and JPM are funded out of the bond market. Why should the US taxpayer subsidize $1.5 trillion of debt if the deposits at these institutions are to be protected? The burden on the US citizen clearly continues to escalate.
The problem for governments across the world isn't necessarily Mr. Gross's voice but it is the voice of all the pension funds, insurers and money market funds heavily invested in financial service bonds. To wipe out equity holders is one thing but to wipe out pensions via bond default is another. It equates to systemic risk to the system. I guess we should not lose sight of the Great September Debaucle that was Lehman Brother and that the US relies on foreign institutions both public and private as a source of funding. Who says this isn't political???
As far a pension funds go, I look forward to how actuarial assumptions are about to change in our low interest rate environment. Won't pensions have to take more risk in order to meet future obligations? I read this as equity investments. Yikes. Have fun at those investment committee meetings.
Durable Goods
Just plain aweful. The main point to take out of the data is the weakness in both imports and exports. Global it is. Here is a look across the world:
Imports Exports
Germany -3.6% -7.3%
U.K. -5.9% -5.5%
Japan -31.7% -45.7%
Taiwan -56.5% -44.1%
I could go on but you get the point. This leads me to GDP revisions as I cannot see this trend ending any time soon.
GDP Revision
I'll say sorry in advance for the rant you are about to witness. Government statisitical data is a complete joke. If you, the investor, do not take the time to look into what inputs they have used and how they are calculated it is your own fault for not understanding the magnitude and seriousness of the mess we are in. While GDP has its problems my prime target is the Birth/Death Ratio in the employment numbers. One just has to look up what this plug figure is to "get" while at economic turns (either positive to negative or vice versa) or when the rate of change or slope gets steeper it either understates (going from negative to positive) or in our case has overstated (both steep slope and positive to negative change) the strength of US employment.
Back to the GDP revision. As seen above the global consumer is retrenching. It should be no surprise that the consumer spending component of GDP was revised lower and inventories were revised higher. This should lead to lower prices going forward as inventory levels are too high and need to be reduced. The price reductions we have seen should get more aggressive. It will be interesting to see at what price the consumer steps in?
Unemployment
Weekly claims continue to trend higher. News of layoffs continue - read any paper around the world to get a flavor. Not a good trend. This should push the official unemployment number. Lets not forget how interconnected this number is. Higher inventory levels will lead to more layoffs. Psychologically if a consumer is concerned of losing a job they will be less inclined to purchase anything (house, car, clothes etc) and dramatically increase their savings rate and pay down debt. The trend is not our friend.
To quote Dave Rosenberg from Merrill "...any rally is to be rented and not bought".
Quotes Of The Day
The ultimate result of shielding man from the effects of folly is to people with world with fools.
Herbert Spencer, 1891
... any propping up of shaky positions postpones liquidation and aggravates unsound conditions.
Murray Rothbard, 1975
Hey maybe someone should send these to governments around the world. We are walking very close to the edge of the cliff.
Herbert Spencer, 1891
... any propping up of shaky positions postpones liquidation and aggravates unsound conditions.
Murray Rothbard, 1975
Hey maybe someone should send these to governments around the world. We are walking very close to the edge of the cliff.
Wednesday, February 18, 2009
More On The Fiscal Stimulus Bill
I have read a great deal of analysis on the $787 billion package. However I continue getting stuck on one number. The tax cut contained within the package is for the middle class and amounts to $400 per individual or $800 per couple. This is per year! So really individuals are saving about $8 per week. Wow thanks for the help. Do you think this will help if your salary get cut or you are behind on some credit card debt say at 19%? Not sure how relavent it really is. I would have rather seen the money spent on increased "shovel ready" infrastructure projects and education. This would address both the short and long term needs for the U.S. economy. Building schools in Milwaukee ($87 million) when they already have 15 empty schools due to shrinking demographics is not my idea of spending on eduction.
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