Today's action in the financial sector of the market pretty much leaves me speechless. I'll mainly link then:
Nationalization fears slam banks - Understand the cause - there's a cause, and then there's an effect.
Some banks may have to be nationalized, Sen. Dodd says
Wells Fargo & Co. dived $2.88, or 24%, to $9.13. The BKX index of 24 major bank stocks was down 9%, bringing its year-to-date loss to 55%...
Year to date loss of 55%!? It's only mid Feb!!! Sen. Dodd who received a sweet heart deal from (now defunct) countrywide - he's participating in the vocal nationalization choir.
Also: Obama has lost 30% of the value of Banks in the US in 2 weeks!
It's not Bush's fault, it's not deregulation, it's not the capitalist system - the Blame falls directly at the hands of the sitting president. There's another way to "spread the wealth", to destroy all wealth - it's called Bolshevism!
But hey, NYT has other news to share with you:
Obama Bans Gimmicks, and Deficit Will Rise
For his first annual budget next week, President Obama has banned four accounting gimmicks that President George W. Bush used to make deficit projections look smaller. The price of more honest bookkeeping: A budget that is $2.7 trillion deeper in the red over the next decade than it would otherwise appear, according to administration officials.
The new accounting involves spending on the wars in Iraq and Afghanistan, Medicare reimbursements to physicians and the cost of disaster responses.
But the biggest adjustment will deal with revenues from the alternative minimum tax, a parallel tax system enacted in 1969 to prevent the wealthy from using tax shelters to avoid paying any income tax.
Even with bigger deficit projections, the Obama administration will put the country on “a sustainable fiscal course” by the end of Mr. Obama’s term, Peter R. Orszag, the director of the Office of Management and Budget, said Thursday in an interview. Mr. Orszag did not provide details of how the administration would reduce a deficit expected to reach at least $1.5 trillion this year.
Mr. Obama’s banishment of the gimmicks, which have been widely criticized, is in keeping with his promise to run a more transparent government.
Fiscal sleight of hand has long been a staple of federal budgets, giving rise to phrases like “rosy scenario” and “magic asterisks.”
The $2.7 trillion in additional deficit spending, Mr. Orszag said, is “a huge amount of money that would just be kind of a magic asterisk in previous budgets.”
“The president prefers to tell the truth,” he said, “rather than make the numbers look better by pretending.”
Recent presidents and Congresses were complicit in the ploy involving the alternative minimum tax. While that tax was intended to hit the wealthiest taxpayers, it was not indexed for inflation. That fact and the tax breaks of the Bush years have meant that it could affect millions of middle-class taxpayers.
If they paid it, the government would get billions of dollars more in tax revenues, which is what past budgets have projected. But it would also probably mean a taxpayer revolt. So each year the White House and Congress agree to “patch” the alternative tax for inflation, and the extra revenues never materialize.
Nearly $70 billion of the just-enacted $787 billion economic recovery plan reflected the bookkeeping cost of adjusting the alternative tax for a year.
The White House budget office calculates that over the next decade, the tax would add $1.2 trillion in revenues. But Mr. Obama is not counting those revenues, and he is adding $218 billion to the 10-year deficit projections to reflect the added interest the government would pay for its extra debt.
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It's all about priorities now get the fork and chase those mysterious rich people not paying enough Alternative Minimum Tax!
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