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Treasury Secretary and little $40K tax mistakes

Instapundit provided a link to TaxProf:

http://taxprof.typepad.com/taxprof_blog/2009/01/geithner-blames-.html

That covers our future Treasury Secretary - kindof.

Basically, the IMF gave him a wierd W2 - not a 1099. It had NONE or blanks in all the boxes except wages ( http://volokh.com/archives/archive_2009_01_18-2009_01_24.shtml#1232612258 )

However, our Futures Hero at Treasury was audited for two years of this mistake (which only occured in the 2004 and 2005 editions of TuboTax) and he 'accidentally' made the same error on other filings. Two problems, you ain't using TurboTax 2005 in 2006. And, when the IRS audits you and has a finding for 2005 you should amend your 2003 filing - just to be a good guy and a patriot:laugh:
 
Well, the PPT did their best to prevent a crash. I guess you can call it a success. Perhaps this was due to insider information on potential good bailout/stimulus news this weekend.

On the SPX daily chart, it doesn't look bullish at all. Looks like a bear flag in the making. But the currency markets are certainly looking bullish. A break of 800 means we'll see 740.

I'm sure glad to be in G. If you're still in stocks, good luck Monday. If you're in the F fund, you're dead-man walking.:D

View attachment 5510

Transports didn't get the memo this afternoon's rally.

View attachment 5511
 
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This is essentially what I've been saying for the last 3-4 days. Not good for the F fund. But for the short term, since the F fund has been down 7 days in a row, it will surely bounce soon. Just don't fall in love with it.

Treasuries bond "bubble" slowly bursting
Fri Jan 23, 2009 9:47pm EST

By Jennifer Ablan - Analysis

NEW YORK (Reuters) - The Treasury bond "bubble" looks like it's leaking air.
Over the last three weeks, investors have been selling U.S. Treasury bonds heavily, giving the 30-year Treasury bond's yield this week its biggest weekly jump since 2001, shortly after the September 11 attacks on the United States.

The sudden rise in lending rates complicates the U.S. push to lower mortgage rates and other consumer borrowing costs and kick-start the fragile American economy.

"Treasury bonds have sold off as markets have started to digest the rapidly growing volume of future government issuance," said Mohamed El-Erian, chief executive of bond giant Pacific Investment Management Co, or Pimco.

Treasuries performed spectacularly in 2008, returning more than 25 percent in long-maturing bonds, as investors piled into the securities when it became obvious the economy was heading off a cliff.

In fact, yields on long-maturing bonds were trading below 3 percent and only 1-2 basis points on three-month T-bills, the lowest in decades, in December.

The proximate cause for the selling in Treasuries stems from expectations that the government will need to borrow about $2 trillion of debt this year to finance its rescue packages for the battered banking sector. Already, outstanding Treasury debt stood at $5.5 trillion at the end of September.

With this in mind, investors are fleeing Treasuries. In fact, while the Dow Jones industrial average .DJI is down 7.5 percent so far this year, the 30-year Treasury bond is down even more at 10 percent. This is contrary to the usual dynamic, where Treasuries move in the opposite direction of stocks.

There are numerous roadblocks to lower yields ahead.
Timothy Geithner, who is expected to be confirmed soon as U.S. Treasury secretary, said on Thursday that President Barack Obama believed that
China was "manipulating" its currency.

Following that statement, prices of Treasuries fell, reflecting worry among investors that China -- the largest foreign holder of Treasuries -- might be less willing to buy them if the new administration pushed the Chinese to further revalue their currency.

Furthermore, investors are also finding that there is more value to be had elsewhere, including high-quality corporate bonds.

"Treasuries are in their own unique dream world, trading at 2.60 percent for a 10-year Treasury note -- and that is supposed to be a good investment, assuming zero inflation over that time?" said Jack Ablin, chief investment officer of Harris Private Bank in Chicago.

"I would rather own high-quality corporate bonds because they are money good. You will pick up double or triple the rate of a Treasury."

WINDFALL IN BET AGAINST BONDS

Pimco's El-Erian said it matters a great deal for weakened consumers and homeowners how the overall level of borrowing costs evolve against the backdrop of rising Treasury yields.

He said that if Treasury rates continue to rise, this would push up the cost of borrowing because mortgage and other rates are tied to Treasury yields.
"If that happens, markets will again ask whether the Fed is likely to expand its purchasing program to include Treasury bonds," thus limiting the rise of rates, El-Erian said.

However, some investors have wasted no time betting on rising government yields.

Doug Kass, president of Seabreeze Partners Management, has been shorting the government bond market, betting on a fall in prices and thus a rise in yields, since December.

Kass has been shorting the iShares Lehman 20+Year Treasury Index and it is paying off.

The exchange-traded fund is having its worst week ever on a percentage basis -- down 5.8 percent. "There is huge price exposure in Treasuries and the longer you go out into the Treasury curve, the riskier you are getting," Kass told Reuters in December. He is still short the TLT fund.

What's more, shares of the ProShares UltraShort 20+ Year Treasury TBT.P, an exchange-traded fund that gains when long-term Treasury bonds fall, is having its best week ever too, up 11.6 percent this week.

The ETF offers leverage, which magnifies returns when long-term bonds drop as they have.

On Friday, benchmark 10-year note yields, which move inversely to prices, closed at 2.61 percent. It was only one week ago that these yields were trading at 2.32 percent.

For its part, the 30-year Treasury bond closed Friday at 3.31 percent, up more than 40 basis points on the week.

"You can see that it hasn't been a good trade to stay in Treasuries," Sowanick said.

(Reporting by Jennifer Ablan; Editing by Jonathan Oatis)
http://www.reuters.com/article/ousiv/idUSTRE50N0GF20090124?sp=true
Click to expand...
 
350zCommTech said:
What the heck just happened?
Click to expand...

Six companies announce massive job cuts in a scary start to the week.



http://money.cnn.com/2009/01/26/news/economy/job_cuts/index.htm

My guess is this is largely behind what's going on.

Reports this morning indicate at least 39% of Companies are to make huge reductions over the next 6 months.

So - maybe - this is finally the panic sell off starting to take place; or the beggining of the first...as I'm expecting a stairway decline
 
Steadygain said:
Six companies announce massive job cuts in a scary start to the week.



http://money.cnn.com/2009/01/26/news/economy/job_cuts/index.htm

My guess is this is largely behind what's going on.

Reports this morning indicate at least 39% of Companies are to make huge reductions over the next 6 months.

So - maybe - this is finally the panic sell off starting to take place; or the beggining of the first...as I'm expecting a stairway decline
Click to expand...

That can't be good. CAT cutting 20K. Ouch.

Non-farm payroll next Friday.
 
Minnow said:
The FED must've leaked that they're gonna lower their target rate again :laugh:
Click to expand...

Yeah, they'll cut .1%.:D


Bond yields are up again for the sixth straight day. F funders can't get a break. Like I said on Friday, F funders are dead-man walking. Another thing, the decline in the stock market in the last hour, had no impact on bond yields. That's scary.

View attachment 5534
 
Bond yields have finally turned down. The 50dma is acting as resitance. Perhaps we are about to see a short term bounce in the F fund. With the FOMC, GDP, and jobs numbers coming out, the F fund might be a good place to be for the next two weeks.

Ofcourse, this would also mean that this rally in stocks might be coming to an end.

Since I'm out of IFT's. I can't do jack.
 
350zCommTech said:
Bond yields have finally turned down. The 50dma is acting as resitance. Perhaps we are about to see a short term bounce in the F fund. With the FOMC, GDP, and jobs numbers coming out, the F fund might be a good place to be for the next two weeks.

Ofcourse, this would also mean that this rally in stocks might be coming to an end.

Since I'm out of IFT's. I can't do jack.
Click to expand...

Here is the chart to go along with my theory.

View attachment 5535
 
350Z, Not sure I would call the last 2 days a true rally, but positive none the less. So far today we have passed the noon (or lunch time) sell off. Now we have to get past 2pm without a panic sell and we may have a good day.:D
 
Bond yields not confirming this rally. If the stimulus and the bad bank plan are so good for the market, why would they buy bonds today? And why did they buy so much yesterday?

My SRS order(50) almost got filled this morning. It got to about 51 I think.

And why didn't Japan have a good night?
 
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