Category: zerohedge

You have to laugh really… We presume the rally in Japanese stocks and weakness in the JPY reflects an assumption that this dismal miss for both imports and exports – leaving Japan’s adjusted trade deficit the worst in Bloomberg’s 20 year history – means moar Abenomics. Of course, the headlines will be all about Abe’s ‘any minute now’ comments or Kuroda’s ‘just one more quarter’ hope (as he speaks later today) but the reality is that things are not getting better in the radioactive nation as this marks the 30th consecutive trade deficit… but, like Venezuela, when has that even been reason not to buy stocks… S&P futures are up 2.5 points (below Friday’s highs still for now), gold has given back its earlier gains and is unchanged, and Treasury Futures are down a tick.

 

For the 30th consecutive month, Japan ran a trade deficit and this time it was the biggest ever as imports rose 16.5% YoY (missing the 19.9% YoY expectations by the most in 15 months) and exports rose 11.5% (missing the 15.6% YoY expectations by the most in 14 months)…

 

But of course, you buy stocks and sell the JPY on that shit-aweful news… (this is not catch up to US equities as it is an extension of the futures market’s gains from Friday…)

 

 

Charts: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/HsZvrGfjkvU/story01.htm Tyler Durden

With an increasing focus in America on the ever growing entitlement society, we thought it might be useful to get some context of how the welfare states stack up across Europe. As Britain prepares to "test" immigrants in an effort to stymie "benefit tourists", The Telegraph's Ed Malnick, details what health care and child, unemployment and housing benefit a 30-year-old single EU migrant with a child but no job can access in each member state.

 

Via The Telegraph,

AUSTRIA

Health care Available immediately, but only if you pay “social insurance”

Child benefit Immediate payment of £89 per month

Unemployment benefit Only available to people who have paid social insurance

Housing benefit No equivalent scheme

 

BELGIUM

Health care Available after a year

Child benefit £115 a month, available immediately

Unemployment benefit Have to have previously worked in Belgium

Housing benefit No national scheme; amounts vary regionally.

 

BULGARIA

Health care Free emergency care immediately; other treatments only available if you pay social insurance

Child benefit Targeted schemes restricted to Bulgarian citizens

Unemployment benefit Minimum of nine months of working in the country required to qualify

Housing benefit Immediate monthly allowance buzt only if you have a local authority home already

 

CYPRUS

Health care Free, available immediately

Child benefit Immediate yearly payment of £444

Unemployment benefit Six months of work in Cyprus required to qualify

Housing benefit Immediately available, limited to £506 a month

 

CZECH REPUBLIC

Health care Available immediately but cash charges apply

Child benefit £23 a month available immediately

Unemployment benefit 12-month minimum qualifying period

Housing benefit Available immediately

 

DENMARK

Health care Free, available immediately

Child benefit Up to £161 a month available after 12 months

Unemployment benefit Minimum of one year’s work required to qualify

Housing benefit No equivalent scheme

 

ESTONIA

Health care Available immediately but cash payments required for some treatments

Child benefit £16 per month available immediately

Unemployment benefit £12.50 per week available immediately

Housing benefit No equivalent scheme

 

FINLAND

Health care Public health service charging flat-rate fees. Available immediately

Child benefit £88 per month available immediately

Unemployment benefit Basic weekly unemployment allowance available after two months

Housing benefit Up to 80 per cent of housing costs available immediately but system varies regionally

 

FRANCE

Health care Only available with a card proving entitlement, issued to residents

Child benefit Immediate payment, but only for parents with more than one child

Unemployment benefit Four-month qualifying period

Housing benefit Immediate; scheme based on house size and local factors

 

GERMANY

Health care Only available with a health insurance card

Child benefit £155 per month available immediately

Unemployment benefit Immediate means-tested allowance for jobseekers who have made "intensive efforts" to find work

Housing benefit Full amount of housing costs available immediately

 

GREECE

Health care 100 days of work required to qualify

Child benefit No equivalent scheme

Unemployment benefit Minimum of six months of work required to qualify

Housing benefit No equivalent scheme

 

HUNGARY

Health care Not immediately available

Child benefit £40.60 per month available immediately

Unemployment benefit Minimum qualifying period of 360 days

Housing benefit No equivalent scheme

 

IRELAND

Health care Free after living in Ireland for three consecutive years, but free immediately to UK citizens

Child benefit £110 per month available immediately

Unemployment benefit £160 per week available immediately

Housing benefit Immediate rent supplement providing short-term support

 

ITALY

Health care Free, available immediately

Child benefit No equivalent scheme

Unemployment benefit Qualifying period of three months

Housing benefit No national scheme; varies according to region

 

LATVIA

Health care Public health service with fees for GP and hospital visits, available immediately

Child benefit Immediate monthly payment of £9.30

Unemployment benefit One-year qualifying period

Housing benefit Varies locally

 

LITHUANIA

Health care Three months qualifying period but “urgent care” free immediately

Child benefit Immediate monthly payment of £24

Unemployment benefit 18-month qualifying period

Housing benefit No equivalent scheme

 

LUXEMBOURG

Health care Not available immediately, as insurance-based

Child benefit £157.10 per month available immediately

Unemployment benefit Minimum of six months of work required to qualify

Housing benefit Immediate rent allowance of up to £104.90

 

MALTA

Health care Free, available immediately

Child benefit Immediate payment; up to £81.55 a month

Unemployment benefit Immediate means-tested benefit of up to £16 per day

Housing benefit No equivalent scheme

 

POLAND

Health care Free, available immediately

Child benefit Immediate payment of up to £54 per month

Unemployment benefit Qualifying period of one year

Housing benefit No equivalent scheme

 

PORTUGAL

Health care Free, available immediately

Child benefit Monthly payment of up to £40

Unemployment benefit Qualifying period of 180 days

Housing benefit No equivalent scheme

 

ROMANIA

Health care six-month q
ualifying period, except for emergencies

Child benefit monthly payment of up to £20

Unemployment benefit minimum qualifying period of 12 months

Housing benefit no equivalent scheme

 

SLOVAKIA

Health care immediately available; nominal cash payment for treatments

Child benefit immediate monthly payment of £19

Unemployment benefit minimum two-year qualifying period

Housing benefit No equivalent scheme

 

SLOVENIA

Health care Available immediately but required to pay minimum of 10 per cent of some treatment costs

Child benefit Immediate payment of up to £97 per month

Unemployment benefit Minimum contribution of nine months

Housing benefit Only available if you already have social housing

 

SPAIN

Health care Only available with a card proving entitlement

Child benefit Immediate payment of up to £20 per month

Unemployment benefit Immediate payment available based on a variable proportion of average wages

Housing benefit No equivalent scheme

 

SWEDEN

Health care Available immediately; basic fees for care

Child benefit Immediate monthly payment of £101

Unemployment benefit Six-month qualifying period

Housing benefit Immediate monthly allowance of up to £125

 

HOLLAND

Health care only available with a certificate proving entitlement

Child benefit Immediate payment of £943 per year

Unemployment benefit Six-month qualifying period

Housing benefit Means tested, available immediately

 

UNITED KINGDOM

Health care Available immediately and free of charge under the National Health Service

Child benefit Paid immediately if the child is under 16, or 16 to 19 and in education or training, and the claimant has an individual income of less than £50,000. Amount is £20.30 a week for the eldest or only child, £13.40 per additional child

Unemployment benefit Immediate payment of £71.70 a week in Jobseeker’s Allowance (JSA) after proving you are actively seeking work. EU migrants have to pass the “right-to-reside” test to show they are “economically active”. The European Commission wants to abolish this test. There is also contribution-based additional JSA which is only available after working for at least two years.

Housing benefit Available immediately if you are on a low income, whether you are working or unemployed.

How much depends on individual circumstances, but amount cannot normally exceed £250 per week for a one-bedroom property, or up to £400 a week for four bedrooms or more

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/3KVwcs9oiKA/story01.htm Tyler Durden

With an increasing focus in America on the ever growing entitlement society, we thought it might be useful to get some context of how the welfare states stack up across Europe. As Britain prepares to "test" immigrants in an effort to stymie "benefit tourists", The Telegraph's Ed Malnick, details what health care and child, unemployment and housing benefit a 30-year-old single EU migrant with a child but no job can access in each member state.

 

Via The Telegraph,

AUSTRIA

Health care Available immediately, but only if you pay “social insurance”

Child benefit Immediate payment of £89 per month

Unemployment benefit Only available to people who have paid social insurance

Housing benefit No equivalent scheme

 

BELGIUM

Health care Available after a year

Child benefit £115 a month, available immediately

Unemployment benefit Have to have previously worked in Belgium

Housing benefit No national scheme; amounts vary regionally.

 

BULGARIA

Health care Free emergency care immediately; other treatments only available if you pay social insurance

Child benefit Targeted schemes restricted to Bulgarian citizens

Unemployment benefit Minimum of nine months of working in the country required to qualify

Housing benefit Immediate monthly allowance buzt only if you have a local authority home already

 

CYPRUS

Health care Free, available immediately

Child benefit Immediate yearly payment of £444

Unemployment benefit Six months of work in Cyprus required to qualify

Housing benefit Immediately available, limited to £506 a month

 

CZECH REPUBLIC

Health care Available immediately but cash charges apply

Child benefit £23 a month available immediately

Unemployment benefit 12-month minimum qualifying period

Housing benefit Available immediately

 

DENMARK

Health care Free, available immediately

Child benefit Up to £161 a month available after 12 months

Unemployment benefit Minimum of one year’s work required to qualify

Housing benefit No equivalent scheme

 

ESTONIA

Health care Available immediately but cash payments required for some treatments

Child benefit £16 per month available immediately

Unemployment benefit £12.50 per week available immediately

Housing benefit No equivalent scheme

 

FINLAND

Health care Public health service charging flat-rate fees. Available immediately

Child benefit £88 per month available immediately

Unemployment benefit Basic weekly unemployment allowance available after two months

Housing benefit Up to 80 per cent of housing costs available immediately but system varies regionally

 

FRANCE

Health care Only available with a card proving entitlement, issued to residents

Child benefit Immediate payment, but only for parents with more than one child

Unemployment benefit Four-month qualifying period

Housing benefit Immediate; scheme based on house size and local factors

 

GERMANY

Health care Only available with a health insurance card

Child benefit £155 per month available immediately

Unemployment benefit Immediate means-tested allowance for jobseekers who have made "intensive efforts" to find work

Housing benefit Full amount of housing costs available immediately

 

GREECE

Health care 100 days of work required to qualify

Child benefit No equivalent scheme

Unemployment benefit Minimum of six months of work required to qualify

Housing benefit No equivalent scheme

 

HUNGARY

Health care Not immediately available

Child benefit £40.60 per month available immediately

Unemployment benefit Minimum qualifying period of 360 days

Housing benefit No equivalent scheme

 

IRELAND

Health care Free after living in Ireland for three consecutive years, but free immediately to UK citizens

Child benefit £110 per month available immediately

Unemployment benefit £160 per week available immediately

Housing benefit Immediate rent supplement providing short-term support

 

ITALY

Health care Free, available immediately

Child benefit No equivalent scheme

Unemployment benefit Qualifying period of three months

Housing benefit No national scheme; varies according to region

 

LATVIA

Health care Public health service with fees for GP and hospital visits, available immediately

Child benefit Immediate monthly payment of £9.30

Unemployment benefit One-year qualifying period

Housing benefit Varies locally

 

LITHUANIA

Health care Three months qualifying period but “urgent care” free immediately

Child benefit Immediate monthly payment of £24

Unemployment benefit 18-month qualifying period

Housing benefit No equivalent scheme

 

LUXEMBOURG

Health care Not available immediately, as insurance-based

Child benefit £157.10 per month available immediately

Unemployment benefit Minimum of six months of work required to qualify

Housing benefit Immediate rent allowance of up to £104.90

 

MALTA

Health care Free, available immediately

Child benefit Immediate payment; up to £81.55 a month

Unemployment benefit Immediate means-tested benefit of up to £16 per day

Housing benefit No equivalent scheme

 

POLAND

Health care Free, available immediately

Child benefit Immediate payment of up to £54 per month

Unemployment benefit Qualifying period of one year

Housing benefit No equivalent scheme

 

PORTUGAL

Health care Free, available immediately

Child benefit Monthly payment of up to £40

Unemployment benefit Qualifying period of 180 days

Housing benefit No equivalent scheme

 

ROMANIA

Health care six-month qualifying period, except for emergencies

Child benefit monthly payment of up to £20

Unemployment benefit minimum qualifying period of 12 months

Housing benefit no equivalent scheme

 

SLOVAKIA

Health care immediately available; nominal cash payment for treatments

Child benefit immediate monthly payment of £19

Unemployment benefit minimum two-year qualifying period

Housing benefit No equivalent scheme

 

SLOVENIA

Health care Available immediately but required to pay minimum of 10 per cent of some treatment costs

Child benefit Immediate payment of up to £97 per month

Unemployment benefit Minimum contribution of nine months

Housing benefit Only available if you already have social housing

 

SPAIN

Health care Only available with a card proving entitlement

Child benefit Immediate payment of up to £20 per month

Unemployment benefit Immediate payment available based on a variable proportion of average wages

Housing benefit No equivalent scheme

 

SWEDEN

Health care Available immediately; basic fees for care

Child benefit Immediate monthly payment of £101

Unemployment benefit Six-month qualifying period

Housing benefit Immediate monthly allowance of up to £125

 

HOLLAND

Health care only available with a certificate proving entitlement

Child benefit Immediate payment of £943 per year

Unemployment benefit Six-month qualifying period

Housing benefit Means tested, available immediately

 

UNITED KINGDOM

Health care Available immediately and free of charge under the National Health Service

Child benefit Paid immediately if the child is under 16, or 16 to 19 and in education or training, and the claimant has an individual income of less than £50,000. Amount is £20.30 a week for the eldest or only child, £13.40 per additional child

Unemployment benefit Immediate payment of £71.70 a week in Jobseeker’s Allowance (JSA) after proving you are actively seeking work. EU migrants have to pass the “right-to-reside” test to show they are “economically active”. The European Commission wants to abolish this test. There is also contribution-based additional JSA which is only available after working for at least two years.

Housing benefit Available immediately if you are on a low income, whether you are working or unemployed.

How much depends on individual circumstances, but amount cannot normally exceed £250 per week for a one-bedroom property, or up to £400 a week for four bedrooms or more

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/3KVwcs9oiKA/story01.htm Tyler Durden

 

The US can now collectively breathe a sigh of relief that we’ve averted the “debt ceiling debacle.”

The only problem is that this entire “crisis” was a lie. The US actually hit its debt ceiling back in May 2013, a full five months ago.

At that time neither the Treasury Department, nor the White House, nor Congress talked about this.

So for five months, the US debt level was frozen. The reason was because the Treasury was resorting to “extraordinary measures” to keep us below the debt ceiling. It’s interesting that no one in the media talked about this, nor that anyone seemed to care at all.

Then, suddenly we had yet another “crisis” in which the world would literally end if the political class didn’t get their way. The US would default if we don’t spend more money now!

Our President and other political “leaders” fussed about this for two weeks and basically wasted all of our time. The whole exercise was totally pointless outside of setting up an “issue” on which to campaign for the 2014 Congressional elections.

How do I know it was pointless?

Because the deal they made doesn’t raise the debt ceiling. All it did was make the debt ceiling unenforced for a few months… until February 17 2014 specifically.

So we hit the debt ceiling in May… manufactured a crisis in October… just to ignore the issue another three months…

THIS is the state of Government in the US today. The fact the media in this country goes along with this as “news” tells you everything you need to know about the “objectivity” of the fifth estate.

If you want to talk about a real debt crisis, let’s talk about the US Federal Reserve.

The Fed’s current balance sheet is $3.86 trillion. It will be over $4 trillion before the end of 2013 and over $5 trillion before the end of 2014.

THE FED is the debt problem. It is allowing the deficit and the debt to swell like this for the sake of benefiting a handful of banks and screwing the economy. QE doesn’t create jobs. It never has.

 

For a FREE Special Report outlining how to protect your portfolio from the Fed’s policies, swing by: http://phoenixcapitalmarketing.com/special-reports.html

 

Best Regards

Phoenix Capital Research  

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/jo-9gtg_ubo/story01.htm Phoenix Capital Research

One of the great ironies of the Obama presidency is that it has been a disaster for the young people who form the core of his political coalition. High unemployment is paired with exploding debt that they will have to finance whenever they eventually find jobs, and as Stan Druckenmiller explains in his WSJ interview, the “rat through the python theory,” (that fiscal disaster will only be temporary while the baby-boom generation moves through the benefit pipeline and then entitlement costs will become bearable) is simply wrong; since, by then Druck exclaims, “you have so much debt on the books that it’s too late.” Unfortunately for taxpayers, “the debt accumulates while the rat’s going through the python.” The hedge fund billionaire adds that he “did not think it would be nutty to tie entitlements to the debt ceiling because there’s a massive long-term problem. And this president, despite what he says, has shown time and time again that he needs a gun at his head to negotiate in good faith.” The interview goes much, much further…

On The Thieving Generation…

While many seniors believe they are simply drawing out the “savings” they were forced to deposit into Social Security and Medicare, they are actually drawing out much more, especially relative to later generations. That’s because politicians have voted to award the seniors ever more generous benefits. As a result, while today’s 65-year-olds will receive on average net lifetime benefits of $327,400, children born now will suffer net lifetime losses of $420,600 as they struggle to pay the bills of aging Americans.

 

“Oh, so you’ve paid 18.5% for your 40 years and now you want the next generation of workers to pay 30% to finance your largess?” He added that if 18.5% was “so immoral, why don’t you give back some of your ill-gotten gains of the last 40 years?“

But the “kids” still don’t get it…

One of the great ironies of the Obama presidency is that it has been a disaster for the young people who form the core of his political coalition. High unemployment is paired with exploding debt that they will have to finance whenever they eventually find jobs.

 

Are the kids finally figuring out that the Obama economy is a lousy deal for them? “No, I don’t sense that,”

On Entitlements…

…for those on the left who say entitlements can be fixed with an eventual increase in payroll taxes. “Oh, I see,” he says. “So I get to pay a 12% payroll tax now until I’m 65 and then I don’t pay. But the next generation—instead of me paying 15% or having my benefits slightly reduced—they’re going to pay 17% in 2033. That’s why we’re waiting—so we can shift even more to the future than to now?”

 

and it’s not going to get any better… despite the left’s claims…

He also rejects the “rat through the python theory,” which holds that the fiscal disaster will only be temporary while the baby-boom generation moves through the benefit pipeline and then entitlement costs will become bearable. By then, he says, “you have so much debt on the books that it’s too late.”

 

Unfortunately for taxpayers, “the debt accumulates while the rat’s going through the python,” so by the 2040s the debt itself and its gargantuan interest payments become bigger problems than entitlements.

On a disingenuous President Obama…

“I did not think it would be nutty to tie entitlements to the debt ceiling because there’s a massive long-term problem. And this president, despite what he says, has shown time and time again that he needs a gun at his head to negotiate in good faith. All this talk about, ‘I won’t negotiate with a gun at my head.’ OK, you’ve been president for five years.”

 

His voice rising now, Mr. Druckenmiller pounds his fist on the conference table. “Show me, President Obama, when the period was when you initiated budget discussions without a gun at your head.”

On changing the tax code…

Druckenmiller wants to raise taxes now on capital gains and dividends, bringing both up to ordinary income rates. He says the current tax code represents “another intergenerational transfer, because 60-year-olds are worth five times what 30-year-olds are.”

 

And 65-year-olds are “much wealthier than the working-age population. So the guy who’s out there working—the plumber, the stockbroker, whatever he is—he’s paying the 40% rate and the coupon clippers who are not working anymore are paying a 20% rate.”

 

Ah, but what about the destructive double taxation on corporate income? The Druckenmiller plan is to raise tax rates on investors while at the same time cutting the corporate tax rate to zero.

 

“Who owns corporations? Shareholders. But who makes the decisions at corporations? The guys running the companies. So if you tax the shareholder at ordinary income [rates] but you tax the economic actors at zero,” he explains, “you get the actual economic actors incented to hire people, to do capital spending. It’s not the coupon clippers that are making those decisions. It’s the people at the operating level.”

 

As an added bonus, wiping out the corporate tax eliminates myriad opportunities for crony capitalism and corporate welfare. “How do the lobbying groups and the special interests work in Washington? Through the tax code. There’s no more building plants in Puerto Rico or Ireland and double-leasebacks and all this stuff. If you take corporate tax rates to zero, that’s gone. But in terms of the fairness argument, you are taxing the shareholder. So you eliminate double taxation. To me it could be very, very good for growth, which is a huge part of the solution to the debt problem long-term. You can’t do it without growth.”

What the Republicans should do…

Republicans should demand entitlement reform in exchange for the next debt-limit vote this winter or spring. “Maybe they need a break,” he says. “I think a much more effective strategy would be for them to publicly shine a light on something so obvious as means-testing and take their case to the American people rather than go through the actual debt limit.”

 

If Mr. Obama rejects the idea, “then we will really know where he is on entitlement reform.” For this reason, Mr. Druckenmiller views means-testing as “really the perfect start—and it should only be a start—to find out who’s telling the truth here and who’s not.”

Read mor
e at WSJ…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/BdmVMQujivo/story01.htm Tyler Durden

One of the great ironies of the Obama presidency is that it has been a disaster for the young people who form the core of his political coalition. High unemployment is paired with exploding debt that they will have to finance whenever they eventually find jobs, and as Stan Druckenmiller explains in his WSJ interview, the “rat through the python theory,” (that fiscal disaster will only be temporary while the baby-boom generation moves through the benefit pipeline and then entitlement costs will become bearable) is simply wrong; since, by then Druck exclaims, “you have so much debt on the books that it’s too late.” Unfortunately for taxpayers, “the debt accumulates while the rat’s going through the python.” The hedge fund billionaire adds that he “did not think it would be nutty to tie entitlements to the debt ceiling because there’s a massive long-term problem. And this president, despite what he says, has shown time and time again that he needs a gun at his head to negotiate in good faith.” The interview goes much, much further…

On The Thieving Generation…

While many seniors believe they are simply drawing out the “savings” they were forced to deposit into Social Security and Medicare, they are actually drawing out much more, especially relative to later generations. That’s because politicians have voted to award the seniors ever more generous benefits. As a result, while today’s 65-year-olds will receive on average net lifetime benefits of $327,400, children born now will suffer net lifetime losses of $420,600 as they struggle to pay the bills of aging Americans.

 

“Oh, so you’ve paid 18.5% for your 40 years and now you want the next generation of workers to pay 30% to finance your largess?” He added that if 18.5% was “so immoral, why don’t you give back some of your ill-gotten gains of the last 40 years?“

But the “kids” still don’t get it…

One of the great ironies of the Obama presidency is that it has been a disaster for the young people who form the core of his political coalition. High unemployment is paired with exploding debt that they will have to finance whenever they eventually find jobs.

 

Are the kids finally figuring out that the Obama economy is a lousy deal for them? “No, I don’t sense that,”

On Entitlements…

…for those on the left who say entitlements can be fixed with an eventual increase in payroll taxes. “Oh, I see,” he says. “So I get to pay a 12% payroll tax now until I’m 65 and then I don’t pay. But the next generation—instead of me paying 15% or having my benefits slightly reduced—they’re going to pay 17% in 2033. That’s why we’re waiting—so we can shift even more to the future than to now?”

 

and it’s not going to get any better… despite the left’s claims…

He also rejects the “rat through the python theory,” which holds that the fiscal disaster will only be temporary while the baby-boom generation moves through the benefit pipeline and then entitlement costs will become bearable. By then, he says, “you have so much debt on the books that it’s too late.”

 

Unfortunately for taxpayers, “the debt accumulates while the rat’s going through the python,” so by the 2040s the debt itself and its gargantuan interest payments become bigger problems than entitlements.

On a disingenuous President Obama…

“I did not think it would be nutty to tie entitlements to the debt ceiling because there’s a massive long-term problem. And this president, despite what he says, has shown time and time again that he needs a gun at his head to negotiate in good faith. All this talk about, ‘I won’t negotiate with a gun at my head.’ OK, you’ve been president for five years.”

 

His voice rising now, Mr. Druckenmiller pounds his fist on the conference table. “Show me, President Obama, when the period was when you initiated budget discussions without a gun at your head.”

On changing the tax code…

Druckenmiller wants to raise taxes now on capital gains and dividends, bringing both up to ordinary income rates. He says the current tax code represents “another intergenerational transfer, because 60-year-olds are worth five times what 30-year-olds are.”

 

And 65-year-olds are “much wealthier than the working-age population. So the guy who’s out there working—the plumber, the stockbroker, whatever he is—he’s paying the 40% rate and the coupon clippers who are not working anymore are paying a 20% rate.”

 

Ah, but what about the destructive double taxation on corporate income? The Druckenmiller plan is to raise tax rates on investors while at the same time cutting the corporate tax rate to zero.

 

“Who owns corporations? Shareholders. But who makes the decisions at corporations? The guys running the companies. So if you tax the shareholder at ordinary income [rates] but you tax the economic actors at zero,” he explains, “you get the actual economic actors incented to hire people, to do capital spending. It’s not the coupon clippers that are making those decisions. It’s the people at the operating level.”

 

As an added bonus, wiping out the corporate tax eliminates myriad opportunities for crony capitalism and corporate welfare. “How do the lobbying groups and the special interests work in Washington? Through the tax code. There’s no more building plants in Puerto Rico or Ireland and double-leasebacks and all this stuff. If you take corporate tax rates to zero, that’s gone. But in terms of the fairness argument, you are taxing the shareholder. So you eliminate double taxation. To me it could be very, very good for growth, which is a huge part of the solution to the debt problem long-term. You can’t do it without growth.”

What the Republicans should do…

Republicans should demand entitlement reform in exchange for the next debt-limit vote this winter or spring. “Maybe they need a break,” he says. “I think a much more effective strategy would be for them to publicly shine a light on something so obvious as means-testing and take their case to the American people rather than go through the actual debt limit.”

 

If Mr. Obama rejects the idea, “then we will really know where he is on entitlement reform.” For this reason, Mr. Druckenmiller views means-testing as “really the perfect start—and it should only be a start—to find out who’s telling the truth here and who’s not.”

Read more at WSJ…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/BdmVMQujivo/story01.htm Tyler Durden

Presented with no comment…

 

 

Source: Jim Quinn’s Burning Platform – Sunday Funnies

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/tUU6NePJMcw/story01.htm Tyler Durden

“It’s clear to us now that the US economy just isn’t going to reach escape velocity,” said Andrew Law, head of Caxton Associates (one of the hedge fund industry’s most successful money managers) in a wide-ranging and rare interview with the Financial Times. “Tapering is off the table for the foreseeable future.” As we have explained numerous times, Caxton notes the Fed has little option but to continue its policy of extraordinary monetary easing indefinitely, adding “what happened [last week] was just another can kicking exercise. The problem has not been solved and the hopes for a grand bargain are in tatters.” Simply put, he concludes rather dismally, “there are no incentives for the corporate world to go out and spend right now…“

Via The FT,

One of the hedge fund industry’s most successful money managers has warned that dysfunction in Washington has damaged the US economy, leaving the Federal Reserve with little option but to continue its policy of extraordinary monetary easing indefinitely.

 

“It’s clear to us now that the US economy just isn’t going to reach escape velocity,” said Andrew Law, head of Caxton Associates, in a wide-ranging and rare interview with the Financial Times. “Tapering is off the table for the foreseeable future.”

 

…

 

Mr Law’s stark outlook for the US contrasts with widely-held expectations that the US economy will bounce back quickly in the coming months. Most investors and Wall Street analysts expect the Fed to begin “tapering” its programme of quantitative easing in December.

 

…

 

The 47-year old Mr Law said the shutdown and debt-ceiling debate in Washington had “undoubtedly” caused damage to the country’s economy.

 

“What happened [last week] was just another can kicking exercise,” he said of the political deal reached between Democrats and Republicans in Washington to raise the cap on the government’s ability to borrow. “The problem has not been solved and the hopes for a grand bargain are in tatters . . . the lack of visibility is very damaging.”

 

…

 

“We just don’t see how the economy is going to accelerate in the foreseeable future,” he said.

 

“Sequester spending cuts, the debt ceiling and shutdown have all taken their toll . . .  there are no incentives for the corporate world to go out and spend right now . . . that, and the housing market are critical. You’ve already seen earnings release statements for companies mentioning shutdown as a reason for a drop-off in orders.”

 

The grim outlook, while contrarian, is shared by a number of hedge funds.

 

…

 

Caxton also believes the dollar will continue to weaken against the euro – potentially precipitating a currency fight with the eurozone.

 

“It will be fascinating to see how the ECB [European Central Bank] responds,” said Mr Law, adding that one likely option for Frankfurt would be for it to lower rates. “They are not going to be too pleased [with a weakening dollar],”

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/IMf2DI9PhjU/story01.htm Tyler Durden

A physically deflated Larry Summers spoke with Charlie Rose about the US economy (“all we need is a few tenths of a percentage more growth…“), the political process (“nobody should be proud of the governance process…”), and the state of American education (“reward merit, remove tenure…”). The following 86 seconds summarizes the twice-denied would-be-central banker’s thoughts…

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/NoasbwWPXCs/story01.htm Tyler Durden

Submitted by James H. Kunstler via Peak Prosperity blog,

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/SvF5OdcTBU8/story01.htm Tyler Durden