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Mish's Global Economic Trend Analysis
Mish's Global Economic Trend Analysis |
- About that "Beat the Street" GDP Number
- Economic Recovery in Spain? Tax Collections, Retail Sales Prove Otherwise
- "Tax Nightmare" of Eminent Domain Mortgage Seizures
About that "Beat the Street" GDP Number Posted: 31 Jul 2013 11:10 AM PDT GDP beat second quarter estimates of 1 percent easily. However, the BEA revised first quarter growth down from 1.7% to 1.1%. Is this a good thing, a bad thing, or nonsense? The correct answer is "nonsense". One look at BEA GDP Release is all it takes to determine the answer. The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 0.3 percent in the second quarter, compared with an increase of 1.2 percent in the first. Excluding food and energy prices, the price index for gross domestic purchases increased 0.8 percent in the second quarter compared with 1.4 percent in the first.How Convenient My friend "BC" says How convenient, otherwise real GDP would have printed at 0.8%, prices constant. Yet, the yoy rate of real final sales per capita is below 1% for the second quarter in a row, whereas the second quarter annualized rate is near contracting. Had the deflator been reported at the rate in Q1, the yoy and 2-qtr. annualized real final sales per capita rates would have been reported as contracting. Doug Short at Advisor Perspectives came up with similar conclusions via email. Doug writes
Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
Economic Recovery in Spain? Tax Collections, Retail Sales Prove Otherwise Posted: 31 Jul 2013 10:36 AM PDT In an attempt to distract voters from all the political scandals in his administration, Prime Minister Mariano Rajoy is talking about the pending economic recovery in Spain. Don't believe it. Huky Guru at Guru's Blog in Spain takes a good look at numbers that prove Rajoy is disingenuous. Via Mish-modified Google translation, please consider Debt Remains Uncontrolled, €40 Billion Deficit in First Half First Half Deficit 3.81% of GDPSpain's Retail Sales Decline 36th Month Reuters reports Spain's retail sales slump stretches to three years, hampering recovery Spanish retail sales fell for the thirty-sixth month running in June, offering a snapshot of the shrinking consumer spending that is hampering a long-awaited economic recovery.Spain finally met its revised-four-times-lower deficit targets. Don't mistake that for an economic recovery. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
"Tax Nightmare" of Eminent Domain Mortgage Seizures Posted: 31 Jul 2013 12:27 AM PDT Gayle McLaughlin, mayor of Richmond, California is hell-bent on her plan to seize mortgages via eminent domain, then provide "mortgage forgiveness" for the homeowners. I smacked the idea from a legal standpoint in Illegal Public Seizure of Mortgages Via Eminent Domain in the Spotlight. Tax Nightmare Legalities aside, there are also huge tax consequences to consider. A local attorney and real estate broker posting under the name "davecherr" commented on the problem of debt forgiveness. There is a massive and thus-far unremarked upon problem with this ED scheme: it would result in a MASSIVE INCOME TAX BILL FOR THE HOMEOWNER. Under the tax code, discharge of indebtedness is counted as income. There is a safe harbor for people who lose their primary residence to foreclosure, but it would not apply to these Richmond residents, since they would keep their house with magically reduced debt.Mortgage Forgiveness Act of 2007 Expires Sure enough, "davecherr" is correct. Details can be found in the IRS publication Home Foreclosure and Debt Cancellation. Update Dec. 11, 2008 — The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.Conclusions It's safe to say this is not 2012. And even if the law was extended, there may still be huge tax consequences. There is no bankruptcy, proving insolvency can be problematic, these are not farm debts, and the paragraph on non-recourse loans does not apply because there is no default. The very purpose of the eminent domain seizure is to prevent default. Bankrate has more on the insolvency issue in What does it mean to claim insolvency? Q: Dear Tax Talk ...Can you explain what insolvency is? Is our 401(k) balance included in our assets? Thank you. -- BeverlyFor those who are not careful, this ill-conceived socialist wealth redistribution scheme of Mortgage Resolution Partners LLC will leave unsuspecting recipients with huge tax bills should it erroneously survive court challenges that are surely coming. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
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Damn Cool Pics
Damn Cool Pics |
- Floating Picnic Table
- The Danger of Scuba Diving
- Interesting Facts about Different Countries
- The History of Gun Laws [Infographic]
Posted: 31 Jul 2013 09:01 AM PDT |
Posted: 31 Jul 2013 08:47 AM PDT |
Interesting Facts about Different Countries Posted: 31 Jul 2013 08:42 AM PDT |
The History of Gun Laws [Infographic] Posted: 31 Jul 2013 07:57 AM PDT This shooting.org infographic shows that nearly all major gun control acts throughout history have been in response to violent historical events where Americans were harmed by others using firearms. The infographic was created "to raise awareness of an issue important to us and millions of other Americans."…to essentially, "help protect our rights." Click on Image to Enlarge. |
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