Randoms: A 50% Tax For Wall Street Bonuses?
I return from the Thomson Reuters Mother Ship where I participated with a roundtable of reporters...and me. I'll tell ya, if I'm ever called to testify in Congress, I would imagine it would feel a bit like that...with one primary difference; we were all on the same team, searching for truth and exploring solutions.
Some random observations as I strap back into my chair
- Remember when Britain set precedent in September 2008 when they banned short-selling on financial stocks? I sure as shvitz do; that led to Martial Law for the Markets and a seismic shift in free-market capitalism.
- Why do I bring that up? They're at it again, this time imposing a one-time 50% tax on banker bonuses for anyone making over $40,700. Would Washington dare and could that happen to Wall Street? What would the ripples in that pond be?
- Or, are there now two ponds?
- For many, this morning’s article was really “out there” but please understand a few things. First, I'm always early and second, not always right (who is?). The tricky tri-fecta we spoke of isn't in anyone's best interest and there will be two-sided opportunities as we pave the path to our ultimate destination, wherever that might be.
- Granny Goldman (GS) stands out as a green seed in an otherwise pink pack of financials. We spied this dry eye on yesterday's Buzz and we can indeed learn a lot just by watching. A few quick technical takes, in no particular order:
- There's dandruff forming
- The downtrend remains in place.
- $157ish is initial support and the 200-day is nestled below in and around $150.
- The stochastics are 'twisty" oversold (but we should remember they remained twisty overbought for the better part of the last six months).
- NYSE internals aren't working nine to five; what a way to make a living!
- Speaking of which, whatever happened to Dabney Coleman?
- Minyan Mason Slaine -- the same fella who presciently predicted DJIA 10K on July 8th when we were trading at DJIA 8100 -- explains why he loves AOL to fitty and beyond.
- Timmy G wants to extend the $700 billion TARP until next October despite Bank of America (BAC) and others paying the government back? That's the "what," Minyans know by now to explore the "why?"
- We've been talking about the technical construct for some time and it very much remains in play. Here it is; the white line is the downtrend from 2007 and a 50% retracement of the entire decline (bearish). The red line is the uptrend from the lows that rocked steady since March. Those two parallel lines (far right) are the trend channel between S&P 1083 and S&P 1120, where we've been hanging since early November.
- Minyan Peter's observations regarding "1's and 9's" are silly, you say? Yesterday's close for the S&P was 1091.94. I don't claim to understand it but it sure is fascinating.
- You know The Power of the Invisible Sun book that Bobby Sager and I discussed in our recent Minyanville interview? I've got a copy signed by Sting and Bobby that somehow slipped through the Festivus cracks. If you're interested in snagging this prized pup—one of fifty in existence and with 100% of the cost supporting his cause—ping me directly. The high bid on Friday's closing bell will have it in time for the holidays and Minyan Hank is sitting atop the leader board with a $500 bid.
- Speaking of good peeps doing the right thing, snaps to Minyan Dough Boy for stepping up in a big way for Ruby and the Kids.
- Have you read James Grant's Requiem for the Dollar?
- Is there anything wrong with some vintage Bobby?
- According to the CMA Sovereign Risk Monitor, the highest default probabilities, in order, are: Venezuela, Ukraine, Argentina, Pakistan, Dubai, Latvia, Iceland, Lithuania, California and Greece.
- California?
- China's banking regulator plans to slow new lending; this could be an important nugget of news so we wanted to make sure you saw it.
- Another stocking stuffer thought? Frost yourself with some Hoofy & Boo Bobbleheads on the heels of last night's DPAC (Digital Publishing & Advertising Awards) top prize for best branded video. Congrats boys; that will look mighty fine next to your Emmy Award!
- If thinking positive doesn't work, we can always meditate with the critters?
R.P.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
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I suspect this is lame-duck political theater; I'd guess the new Tory government, expected soon, will reverse it (unless it has already been collected by that time; expect legal delaying tactics.)
Goldman will pay out billions in bonus money this year upwards of 750.000 on average per employee and had that money been applied to dividends it would equal 32 dollars per share. (Not the measly 1.7% they are getting currently)
Perhaps rather then tax them 50% they should force them to give depositors back the money they have been stealing by way of the Government sanctioned reduce interest rates. The spread between the .025% depositor's interest rate and the 750.000 bonus is a royal fricken that's uncalled for and is unfair.
A huge section of our economy has been drained by reducing interest rates to nothing. As I make nothing on my money I spend nothing.
Johnny Lunch Box
JPM
With billions being spent of finding a cure perhaps more attention should be spent on finding the cause.
We have known the effects of lead for hundreds of years yet we put it in our paints, gas, our water fountains and toys.
We have known the effects of Asbestos and still we use it.
Where is the oversight that we spend billions on. EPA, FDA, ECT. Lets stop the cause. That would be a lot more effective then trying to find a cure.
Johnny Luch Box
JPM
