- WHAT IF? AFTER THE SEQUESTER KICKS IN THERE ISN'T ANY REAL PAIN RATHER 'SPIN PAIN' FROM THE MAIN STREAM MEDIA. PERHAPS WE COULD CALL THAT 'PHANTOM PAIN'. A PAIN THAT EXISTS ONLY IN YOUR MEMORY.
"just make sure to sell ahead of everyone else", just like everyone sold ahead of everyone else on October 11th 2007, the last time stocks were here …
- Dow Jones Industrial Average: Then 14164.5; Now 14164.5
- Regular Gas Price: Then $2.75; Now $3.73
- GDP Growth: Then +2.5%; Now +1.6%
- Americans Unemployed (in Labor Force):Then 6.7 million; Now 13.2 million
- Americans On Food Stamps: Then 26.9 million; Now 47.69 million
- Size of Fed's Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
- US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
- US Deficit (LTM): Then $97 billion; Now $975.6 billion
- Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion
- US Household Debt: Then $13.5 trillion; Now 12.87 trillion
- Labor Force Particpation Rate: Then 65.8%; Now 63.6%
- Consumer Confidence: Then 99.5; Now 69.6
- S&P Rating of the US: Then AAA; Now AA+
- VIX: Then 17.5%; Now 14%
- 10 Year Treasury Yield: Then 4.64%; Now 1.89%
- USDJPY: Then 117; Now 93
- EURUSD: Then 1.4145; Now 1.3050
- Gold: Then $748; Now $1583
- NYSE Average LTM Volume (per day):Then 1.3 billion shares; Now 545 million shares
Consumer Spending up
Consumer spending in the U.S. rose in January even as incomes dropped by the most in 20 years, showing households were weathering the payroll-tax increase by socking away less money in the bank.
Household purchases, which account for about 70 percent of the economy, climbed 0.2 percent after a 0.1 percent gain the prior month, a Commerce Department report showed today in Washington. The median estimate in a Bloomberg survey of 76 economists called for a 0.2 percent advance. Incomes slumped 3.6 percent, sending the saving rate down to the lowest level since November 2007.
Government Revenue at all time high
As President Obama launches into the next phase of budget negotiations with Congress, recent estimates may lend credence to Republican claims that the federal coffers are well fed on taxes.The Congressional Budget Office estimates the federal government is on pace to bring in a record $2.7 trillion in tax receipts this fiscal year.
The increase reflects a steady post-recession rise in revenues. They ticked up 6 percent in 2012, but according to the CBO could jump 11 percent in 2013.
The expected tax boost comes after Congress and the White House struck an eleventh-hour deal at the start of the year that allowed for an increase in tax rates for top earners, and for the expiration of a 2-point payroll tax cut. The agreement will play a big role in boosting revenues this year -- and is also the No. 1 reason cited by Republicans for not wanting to agree to more tax increases as part of a new budget deal.
"The president got $650 billion of higher taxes on the American people on January the 1st," House Speaker John Boehner told NBC's "Meet the Press" over the weekend. "How much more does he want?"
Obama, though, said at the start of the first Cabinet meeting of his second term Monday that he wants to continue to push for "the kind of balanced approach of spending cuts, revenues, entitlement reform that everybody knows is the right way to do things."
According to historical figures from the White House, the last tax revenue record was set in 2007, when the government raked in nearly $2.6 trillion. By 2009, tax revenue took a dive, before gradually building back up.
The CBO shows that, as a percentage of GDP, revenue is still below the 40-year average of 18 percent. The 2013 figure would represent 16.9 percent of GDP -- a full point higher than it was the year before.
The IRS has benefited from a bounty of sources, from increases in corporate income taxes to increases in estate and excise taxes.
Meanwhile, spending is on pace to hit $3.55 trillion in 2013, roughly what it was in 2012. According to the CBO, that represents 22.2 percent of GDP -- "a share that is still larger than in any year between 1986 and 2008."
While Republicans say spending is the problem, both sides agree that cutting discretionary spending alone -- or the annual spending that doesn't go to programs like Medicare, Medicaid and Social Security -- will not solve America's debt and deficit crisis.
With the enactment of the sequester, Congress will cut deeper and deeper into discretionary spending. But costly entitlements will continue to grow, driving up the U.S. debt and also the annual interest taxpayers pay on that debt.
