Saturday, December 30, 2017

Watch for Eonia Year End Spikes

In the last two days of November, the Eonia, which is the one day Euribor rate, spiked 6.1% and 6%, which is very unusual.  Bloomberg gave, as an explanation, that the National Bank of Greece had excess liquidity of 450 million euro which it loaned in the last two days of November to peers in its country, but would that cause two days of 6% spikes?  Was something else going on with eurozone bank liquidity?

The two regional Italian banks Carige and Creval have been struggling for additional funding, along with four other small Italian banks, to meet the ECB balance sheet liquidity rules and lower allowable NPLs (non-performing loans).  But any month end liquidity needs would have been relatively small.  However, new ECB bad loan rules will become effective January 1, 2018 despite significant opposition, particularly from Italy.  This will put additional pressure on Italian banks, because, while eurozone banks as a whole have 5% NPLs, Italian banks have 15% of that 5%.  The final compromise is to enforce the new NPL rules on a bank by bank basis, whatever that means.

Meanwhile, on 18 November Monte dei Praschi di Sienna, had to put $671 million (569.4 million euro) in reserve, before its new reorganization board meets for the first time in December, which

Friday, December 29, 2017

Job Losses Under New Tax Law Already Beginning

Under the new U. S.  tax law, corporate interest deductions are capped at 30 % of adjusted taxable income (ATI).  I have already seen a privately owned company (owned by a private equity firm) announcing major layoffs effective at year end and internally communicate the new tax law  will result in paying higher taxes. 

Saturday, December 16, 2017

Full Text of Final GOP Tax Bill

 It is the intent of the GOP Congressional leadership to vote on this bill as soon as possible to preempt any informed debate or public review or discussion.  The vote will purposefully be prior to any CBO fiscal analysis, despite an at least $1.4 trillion deficit impact, or any Joint Conference on Taxation analysis as normally required.  The Tax Bill is a huge economic blunder which will cut spending on infrastructure, education, make health insurance more expensive, do nothing to boost wages, and put a bullseye on Medicare and Social Security.

Here is a link to a post by a tax attorney/law professor providing a links to the full 1097 page bill and  a 570 page explanation.

The economic "benefits" are based on historically inaccurate assumptions of trickle down economics and false arguments to justify huge benefits to the very wealthy as opposed to little or no benefits (in some case even more taxes paid in future years)  for the the middle class or poor.  This bill will economically cripple the Affordable Care Act and increase American citizens without health care by 10-13 million.  It is direct attack on higher education and public education.

When the patently erroneously revenue assumptions prove systemically lacking, you may expect these GOP Congressional leaders to propose massive cuts in Social Security and Medicare to make up for their purposefully misrepresentation of the tax bill's revenue.

It pays to be a big money political donor.

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Wednesday, December 13, 2017

See How GOP Tax Plan Will Impact Your Taxes

Here is an interactive page where you can click on your state and then click your tax bracket and see if you benefit or actually pay more in future years.  You may be surprised what happens in 2019 and how different it will be by 2027.  People in lower tax brackets are going to see how they will pay for the benefits thrown at the the highest tax brackets.

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