Tsunami's Account Talk

[Birchtree]

If no one else gets a job the Bush tax cuts will be extended for all - November will set the policy going forward.

 

[Silverbird]

How are we going to pay for it? It was never accounted for in any plans. Some of it is silly (going from estate taxes on $1 billion to no estate taxes for instance, $1 billion is too low but $3 billion, which was the threshold before it jumped to no estate tax looks reasonable - there's a big difference from even $3 billion to no ceiling!).

 

[crws]

How are we going to pay for it? It was never accounted for in any plans.

Was that the plan? For it to have to be included going forward? :suspicious:

 

[Silverbird]

The tax cuts are scheduled to end in 2011. All current deficit calculations assume (you know what 3 words you get from assume) this will happen. The plan was NOT to plan.

The estate tax is an easy one to illustrate:


Before Tax cut:

• Taxes on value of estate above $1 billion (which made little sense if you lived in a place where the average house was overvalued at $750 million - like my parent's house in Silicon Valley, over 50 years old.)

After Tax cut,

• year 1: Taxes on value of estate above $2 billion
• year 2: Taxes on value of estate above $3 billion
• Year 3 (right now): No estate taxes
• 2011: Back to to the future: Tax cut no longer applies. If nothing is done - taxes on value of estate above $1 billion (well at least house values have gone down)

 

[Birchtree]

I hope you don't mind if I covet your #79 tracker position over the next week. You are frozen in time and ripe for pickin.

 

[Tsunami]

I've been away for a few days...

The McClellen volume oscillator closed at +123784 today. http://www.mcoscillator.com/market_breadth_data/ It's only closed that high twice in the last year.

8/5/09 - the oscillator peaked that day at +123000. That was followed by a 6-day, 3.9% pullback

6/15/10 - the oscillator peaked that day at +134300. The market rallied a bit more for a few days then fell 10.6% to the 1010 low on 6/30.

Just throwing out a bone of hope for those hoping for a pullback to get in. It should be near. There's also Arch Crawford's prediction that the world should implode starting today:

http://www.marketwatch.com/story/crawford-says-apocalypse-begins-monday-2010-07-26

In my opinion "the" top of this rally is coming in August as has been predicted for over a year now by Laundry's T-theory. I'm hearing nothing but bullish talk all of a sudden, which is exactly what wave 2's are supposed to do to lure everyone in. It hasn't quite reached an extreme yet though, so 1139 or higher still looks likely within a week or two.

When the dollar bottoms, stocks should top, and it's getting close...
http://4.bp.blogspot.com/_TwUS3GyHKsQ/TE4iRHDznkI/AAAAAAAAGmg/X668QXGIRtQ/s1600/dollar.png

A visual look at the NYSE McClellen Oscillator showing how tight the rubber band is getting stretched:
http://1.bp.blogspot.com/_TwUS3GyHKsQ/TE4i2CUYq3I/AAAAAAAAGnA/XzKHm3dsVXE/s1600/nymo.png

A double top at about 1131 in the next few days would look very similar to this 1929-30 chart:
http://1.bp.blogspot.com/_TwUS3GyHK...AGnw/kTmrnTxm2So/s1600/2010-07-26-PROPHET.png

Above charts are by Daneric:
http://danericselliottwaves.blogspot.com/

 

[Warrenlm]

I don't know whether to weep about the devaluation of the dollar while I slept or ask where this locale is that billions are the measurement vice the old millions I remembered. Did this all change when the Fed went to Trillions? Is that when Silicon Valley homes went to $750 million?

The tax cuts are scheduled to end in 2011. All current deficit calculations assume (you know what 3 words you get from assume) this will happen. The plan was NOT to plan.

The estate tax is an easy one to illustrate:



Before Tax cut:

• Taxes on value of estate above $1 billion (which made little sense if you lived in a place where the average house was overvalued at $750 million - like my parent's house in Silicon Valley, over 50 years old.)

After Tax cut,

• year 1: Taxes on value of estate above $2 billion
• year 2: Taxes on value of estate above $3 billion
• Year 3 (right now): No estate taxes
• 2011: Back to to the future: Tax cut no longer applies. If nothing is done - taxes on value of estate above $1 billion (well at least house values have gone down)

 

[Warrenlm]

The tax tsunami is less than six months away, and pretty soon the nearsighted media will see it...

http://www.investors.com/NewsAndAna...007211841/The-Tax-Tsunami-On-The-Horizon.aspx

It seems to me that the hoopla and stridency that this issue is treated with exemplifies how bad both the media and politicians have become. It is a given that the Congress and the President want to extend the marginal rates for most brackets. The Republicans would stand in the way of that at their peril. And they are going to risk being seen as again looking out for the rich. Despite Sean being upset I can't get excited about the top rate going up from 35 to 39.

 

[Silverbird]

I don't know whether to weep about the devaluation of the dollar while I slept or ask where this locale is that billions are the measurement vice the old millions I remembered. Did this all change when the Fed went to Trillions? Is that when Silicon Valley homes went to $750 million?

Oops, I like zeros, losts of zeros. That's $750 thousand. Still too much for an over 50 year old, one story 3 bedroom with a small yard.

 

[Tsunami]

Straight from the CBO, we're staring right at a "sudden fiscal crisis". They offer three ways out, none of them pleasant. This is no longer something that "could happen", "maybe", it's coming and is just a matter of when.

http://cboblog.cbo.gov/?p=1249

Per the wave counters the next nosedive could be just a few days away http://2.bp.blogspot.com/_TwUS3GyHKsQ/TE9EK92p5xI/AAAAAAAAGpA/REE4TwICCxU/s1600/djia.png , or more optimistically from Terry Laundry it could be up to a month away. Or if your a CNBC guest it will never happen and the skies are bluer than ever.

I look forward to the day when I can be even more bullish than Birchtree, but for now, well, tick, tick, tick....

 

[Tsunami]

The latest from Martin Armstrong: http://www.martinarmstrong.org/files/The-New-Securities-Reality-7202010.pdf ...the Securities Act has "set the stage for the next total meltdown". Note that his market predictions are not yet updated from 6/9/10 when he called for the first week in August being a pivotal point for a likely turn down into October/November.

So somehow his own business cycles (http://www.nowandfutures.com/buscycle.htm) are lining up well with T-theory, Elliott waves, other cycles gurus, Arch Crawford, etc....just found another one, the latest Daniel Code chart predicts a peak about 8/4/10: http://www.thedanielcode.com/display.php?nav=archives

When all the gurus are aligned like this, it makes me wonder if it will instead take off the other way when the world doesn't end this weekend....

 

[crws]

The latest from Martin Armstrong: http://www.martinarmstrong.org/files/The-New-Securities-Reality-7202010.pdf ...the Securities Act has "set the stage for the next total meltdown". Note that his market predictions are not yet updated from 6/9/10 when he called for the first week in August being a pivotal point for a likely turn down into October/November.

So somehow his own business cycles (http://www.nowandfutures.com/buscycle.htm) are lining up well with T-theory, Elliott waves, other cycles gurus, Arch Crawford, etc....just found another one, the latest Daniel Code chart predicts a peak about 8/4/10: http://www.thedanielcode.com/display.php?nav=archives

When all the gurus are aligned like this, it makes me wonder if it will instead take off the other way when the world doesn't end this weekend....

Sheesh, I better pack up and run for the hills.
Maybe we can just get this over with and then they'll shut up for awhile.
Who's more right?
Market gurus or the slew of corporations raising outlook for q3? :suspicious:

 

[Tsunami]

The financial crisis in Oregon pretty mirrors most other states: (CRWS, do you live on the no income tax WA side, or the no sales tax OR side of the river?, I'm considering retiring in that area if I don't go with my first choice of the Puget Sound area somewhere)
http://www.oregonlive.com/politics/index.ssf/2010/07/oregon_budget_stands_at_precarious.html


One more leg up?
http://4.bp.blogspot.com/_TwUS3GyHKsQ/TFCQXgLjp3I/AAAAAAAAGrI/8jy2KXIyeag/s1600/spx.png

That seems to be the unanimous wave count tonight, so if it does go up tomorrow, and perhaps puts the finishing touches on with a gap up Friday on the GDP report, as Daneric put it, a lot of people will be shorting the cr*p out the market Friday hoping for that elusive wave 3 down.

 

[crws]

I'm partial to WA, since I've lived this area most of my life.
When Seattle was the site of the World's Fair, I remember being completely awestruck at the Space Needle.
In 6th grade we did a 3 day school exchange trip, staying with families over on the coast (we lived in Wenatchee) and toured the underground in Old Seattle near Pioneer Place. I believe there are still glass blocks in the sidewalks so that there is daylight below.
I love the Emerald City.
Being at the SW border does have it's unique advantages, however.
So far Oregon has no sales tax, so as you may imagine, it is a retail destination for Vancouver dwellers. The Costco, Home Depot(s) and other retail outlets just beyond the WA border do a brisk business.
I need to re-examine the tax code to be sure, but generally speaking, if you live in WA and more than 50%(?) of your earnings are in OR, you must pay OR non-resident income tax.
There is an earnings threshold that delineates whether you fall into that classification, so if you are a split-state earner with most of your income from the WA side, you save 10% by no OR tax.
The WA Gov maintained the sales tax credits, so you are able to deduct big ticket items, car tabs, and the like, or a general sales tax exemption from your IRS fed tax.
If you're a border dweller, you get the OR tax as a credit or the base WA sales tax exemption, but not both.
I lived in PDX for 20+ years and Multnomah County was on a tax rampage for the last 8 years or so.
Just over the border, WA schools were far superior, living expenses are, in some cases, dramatically lower, it is more Public Utility District friendly, and much more livable IMO.
I commute across the river 50 miles RT a day, sometimes putting in 2 hours behind a windshield, but when I think about moving closer to work, I cringe at the thought of Re-Oregonizing.....

There is this bright spot, however....(pun intended :cheesy
http://governor.oregon.gov/Gov/P2010/press_072110.shtml

Press Release
July 21, 2010
Governor announces Oregon's first Thin Film Solar Plant will locate in Gresham

New solar manufacturing company will invest $200 million in Oregon, creating hundreds of jobs

(Salem) – Governor Ted Kulongoski today announced that Solexant will locate the largest solar nanotechnology manufacturing facility in the world in Gresham. Solexant’s initial $200 million investment will create approximately 100 jobs in the first phase of establishing the 100MW facility. The company’s plans call for future expansions, which could create hundreds of more jobs for Oregonians over the long-term.

“We are pleased to welcome Solexant to Oregon, North America’s leading solar manufacturing center,” said Governor Kulongoski. “This investment will mean jobs immediately for Oregonians with the promise of more in the future. In addition, this company brings a new technological facet to Oregon’s already booming solar manufacturing base and will help us continue to be a global leader in solar manufacturing.”

Company officials said Solexant’s Gresham plant will be the largest solar nanotechnology manufacturing facility in the world. The plant also will be Oregon's first thin film solar manufacturing plant. Solexant, based in San Jose, California, uses a technology originally developed at the Lawrence Berkeley National Laboratory in California in which solar receptors are printed on rolls of backing material. The approach is an alternative to the conventional technique of growing crystalline silicon ingots and slicing them into wafers.

The addition of Solexant’s estimated $200 million investment into Oregon’s existing lineup of solar manufacturing facilities brings the total estimated capital investments of solar manufacturers in the state to more than $1.5 billion over the last four years with more 2,000 new family-wage jobs created at final build-out for Oregonians.

“Solexant greatly appreciates its partnerships with the State of Oregon, the Oregon Department of Energy and the City of Gresham to facilitate the construction of the world’s largest nanotechnology manufacturing facility in this beautiful state,” said Damoder Reddy, CEO of Solexant. “As Oregon’s first thin film solar manufacturing plant, the Gresham facility will prove the commercial application of our nanocrystal ultrathin-film solar cell technology in a very capital-efficient way and solidify Solexant’s place as a leader in the solar industry.”

The company has received a preliminary Business Energy Tax Credit certification from the Oregon Department of Energy for eligible project costs up to $37.5 million. The resulting tax credit is 50% of the total eligible costs (up to a $18.75 million tax credit). The tax credit is taken over a five-year period ($3.75 million tax credit per year) and the company has signed a performance agreement to create a minimum of 97 full-time equivalent jobs for this first phase.

In addition, the Oregon Department of Energy has also approved a State Energy Loan (SELP) for $25 million to the company. The Gresham City Council today will vote on a proposed loan guarantee for a portion of the ODOE loan to the company. In addition, the Solexant plant site is also within a state-designated Enterprise Zone.

 

[Tsunami]

Thanks CRWS. I have roots in both areas. My dad grew up in Washougal/Camas and I have many good memories of visits to that side of the family in that area. My mom's parents (pictured here http://content.lib.washington.edu/c...OOT=/imlseastside&CISOPTR=416&CISOBOX=1&REC=4 and going back a generation earlier my great-grandfather was an early settler of Bellevue with land on Meydenbauer Bay and where Bellevue Square Mall is now, boy what that land would be worth now! http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=313) had a gorgeous old family home on the Kirkland lakefront. I was only 2 during the World's Fair but remember seeing the Space Needle and the rest of the skyline from their picture window....their attic was full of mounted antlers and wax music cylinders and other ancient stuff...that home was sadly bulldozed in the 70's to make way for one of the high rise condo buildings now lining Lake Washington. As for me I grew up in the Tri-Cities and my family is still there. My parents still make the annual Fall pilgrimage down the Gorge to the Portland malls for Christmas shopping.

I attempted to do a detailed tax comparison between WA and OR a few years ago. OR came out slightly ahead since they don't tax CSRS pensions and I'm both CSRS and FERS (worst blunder of my life was when I returned to the government in 1991 and chose FERS over CSRS, I had to make the decision on my first day and it was irrevokable, the stock market was roaring at the time and with some too simple math I guessed that FERS would work out better, oops). But with other factors like utilities as you say that can tip the overall cost of liiving scale for a retiree to the Vancouver side. I like the scenery (e.g., Mt. Rainier is my favorite place on earth, I've been there at least 30 times) and variety of things to do around Puget Sound better, but the Portland area is a bit warmer, and housing is more reasonable. I have 6 years to decide and my wife and I plan to take more vacations to both areas until then to figure it out.

 

[Birchtree]

What is that small red dot on your rear side - oh, that's my heat seeker. I want your spot of #79 on the tracker - I'll just have to earn my way.

 

[crws]

I'll ask around and relay opinions re: the tax.
Let me know if you'll be in the area-

 

[Tsunami]

What is that small red dot on your rear side - oh, that's my heat seeker. I want your spot of #79 on the tracker - I'll just have to earn my way.

Good luck with that. Right now Robin Griffiths, who in this interview:
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/6/26_Robin_Griffiths.html
predicted one month in advance that July 26th would be the day to bail out, is looking like a friggin' genious since that day was the closing highs so far for this rally. Things could certainly turn around but it's too high risk for me now.

The Dow eeked out a new high today 6 points above Tuesday's high, creating a nice divergence for the potential wave 2 top here. That ticking time bomb may have just quietly gone off. If not, it will sometime it August.

 

[Tsunami]

Not a good start today. Blame it on the planets and that most powerful alignment in at least 10,000 years I guess. This is how they are aligned this weekend...

http://4.bp.blogspot.com/_TwUS3GyHKsQ/TE16m5sN9rI/AAAAAAAAGkM/SutAruS6GQo/s1600/orbits.jpg

I think the key will be to watch whether the index's can hold the lower boundary of their wedges. Just eyeballing the charts, those key levels look like about 1087 for the S&P, 10,290 for the Dow, and 45.25 for QQQQ. The futures are hovering just above those levels and holding for now.

 

[Tsunami]

That wedge held perfectly. In my opinion it's now up up and away to at least 1130, and likely higher to the August top.