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Rachel Maddows over-hyped, incompetent, and totally incoherent reporting of Donald Trumps 2005 federal tax return shows yet again how easily tax matters can be readily distorted for political gain, especially by the left.
This time, however, the gambit blew up in her face. Maddow is taking a lot of heat for her disastrous (for her and her agenda) and very public disclosure that Donald Trump indeed paid tens of millions of dollars in federal taxes in 2005 (and at a far higher rate than anyone on the left expected). However, in reality Trumps federal tax situation is even more…

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Economics and finance are like going to the dog races, my friend Desmond Lachman of the American Enterprise Institute is fond of saying. Stand in the same place and the dogs will come around again. So they will.
U.S. financial markets produced sequential bubbles first in tech stocks in the 1990s, and then in houses in the 2000s.
What is the collateral for a home mortgage loan? I like to ask audiences of mortgage lenders. Of course, they say, the house, so I am pleased to tell them that is the wrong answer. The correct answer is the price of the house. My next…

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The good should never be the evil of the perfect. The Paul Ryan health-care bill is a very good first step. Massive repeal of Obamacare tax hikes will be great for the economy. Getting rid of the Affordable Care Act mandates will be great for health care. Private-sector competition and choice are always better than government-run anything. The GOP has to practice bipartisanship within itself.
All this health-care reform stuff makes my head spin. And thats why Im putting all my conclusions at thetop of this piece.
I think the House and Senate GOP can make the Ryan blueprint even better….

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The great Canadian economist Reuven Brenner once referred to macroeconomics as a tautology and a myth, a dangerous one at that, sustaining the illusion that prosperity is necessarily linked with territory, national units, and government spending in general. Phil Knight, the wildly talented, courageous, and visionary founder of Nike would likely share Brenners contempt for the macro side of economics. Hes lived Brenners quote, and much more.
In Knights case, Nike, one of the most important and successful brands in the world, is a creation of Knights genius. At the…

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Toward the end of 1942, Winston Churchill, in announcing a rare victory over the German army, uttered one of his more memorable phrases: “This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” The same might be said today of the American economic recovery. Progress, though real, is incomplete.
Nine years after Bear Stearns’ collapse the first sign that the economy was in serious trouble the recovery seems to have healed the Great Recession’s worst wounds. Job creation has been steady. Payroll jobs total 145.8 million, up about 16.1…

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The case of Murray versus Middlebury has generated plenty of interest, and for good reason. For those who missed it, Charles Murray, a distinguished if often controversial social scientist, was prevented from speaking at Middlebury College by repeated noisy disruptions to both a public and hastily-arranged private webcast. Things turned nasty when Murray went to leave and an angry mob confronted him. Murray was pushed and shoved. His interlocutor, liberal political science professor Allison Stanger, was grabbed by the hair, and later had to be put in a neck brace in the hospital. Once she…

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Are late-day ETF buy/rebalancing programs and the proliferation of price momentum (quant) strategies the 2017 equivalent of 1987’s portfolio insurance?
And does it end badly?
Yes, it probably does!
“I have learned through four decades of experience that once most market participants are conditioned to one way of action, the other way quickly may surprise them as rising markets brings rising expectations, and vice versa.
Those expectations can be argued to be at their highest level at any time in this bull market that started in the first week of March 2009.
Optimism in and of itself is not…

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The US jobs report was largely in line with expectations. February was the second consecutive month that the US economy created more than 200k jobs. It is the first time since last June and July. The 235k is just below the revised January 238k gain (initially 227k).
The unemployment rate ticked down to 4.7% from 4.8%, which is notable as the participation rate increased to 63.0% from 62.9%. The underemployment rate slipped to 9.2% from 9.4% and matched the cyclical low recorded at the end of last year.
A shadow of disappointment comes from average hourly earnings. They rose 0.2% compared with…

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Do these things sound patentable? A noninvasive method to check a fetus for genetic defects? A new MRI machine? A new oil rig? A forehead scanning thermometer? A fighter pilot helmet? More importantly, is it just to reward their inventors? And by insisting on justice, might we do well by doing good, and inspire a cornucopia of new, life-enhancing ideas? The bad news is that the Supreme Court disagrees with you; the good news is that the Intellectual Property Owners Association (IPO) has proposed a legislative fix to this serious and growing problem.
Following several recent Supreme…

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On August 21, 2001, the IMF announced that it was likely to augment its stand-by credit facility to Argentina. At that time it was figured the South American country needed an billion boost, but only weeks later the credit facility was expanded instead by .6 billion. By December 1, amidst grave political turmoil and social unrest, a bank run had begun forcing the Argentine central bank to impose a 98% reserve requirement for any additional deposits cleared after that date. It would only get worse, as the government saw three different Presidents in the space of two weeks, and a…

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You knew it all along: Economists can’t forecast the economy worth a hoot. And now we have a scholarly study that confirms it. Better yet, the corroboration comes from an impeccable source: the Federal Reserve.
The study compared predictions of important economic indicators unemployment, inflation, interest rates, gross domestic product with the actual outcomes. There were widespread errors. The study concluded that “considerable uncertainty surrounds all macroeconomic projections.”
Just how large were the mistakes? The report, though written mostly in technical jargon, gives a…

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The border-adjustment tax that has been proposed by Speaker of the House Paul Ryan should be dead on arrival if it is put forward by the Trump Administration. It is bad trade policy, and would totally undermine the fine fabric of international trade law.
Part of the problem with the proposed border adjustment tax (BAT) is that different versions have been proposed. In its simplest version revenues from exports would be excluded when determining profits for tax purposes, and imports would not be deductible as a business expense. The proposed BAT is designed to raise revenues by…

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“Other than money, our most valuable assets are patience and vigilance.”
–Unknown Source
In the main, it remains my strong view that financial asset prices have decoupled from fundamentals in 2017.
First-quarter GDP estimates predictably have moved lower relative to previous consensus forecasts.
Meanwhile, despite obvious legislative, executive branch organizational and other headwinds, second-half consensus profit and economic forecasts remain unrealistic. (The same may apply to 2018).
Three Peaks: In Housing, Autos and Retail
“About one-third of malls in the U.S. will shut their doors in…

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A welcomed theme in the recent election cycle was promise of a thoroughgoing review of unneeded regulations. Regulations that never were subjected to consumer cost-benefit analysis, or that pick winners and losers, or that are in a constant state of flux are prime candidates for repeal. Within the financial community many regulations have arrived as tentacles of Dodd Frank, but there already were many that needed to be aggressively pruned.
Under Dodd-Franks bumper crop of new regulations, Wall Street banks feel the shackles of the Volker rule, a requirement to tie up capital in…

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In a paperless and cloudy world, are investors and citizens as safe as the markets assume we are?In a flat, networked and interconnected world, is it even possible for America to be an “oasis of prosperity” and a driver or engine of global economic growth?
With the G-8’s geopolitical coordination at an all-time low, how slow and inept will the reaction be if the wheels do come off?
– Doug’s Daily Diary, I’m Bearish in Word and Deed
Those three heady questions (above) continue to haunt me — more often these days than even in the past.
And so does the observation that I…

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