Tax Software Exposes Users to Phishing

 When you get email that requests you use a link, you need to ignore it, check the sender source embedded in the mail, and if you think you should take action you do so my going (by entering in your browser) to the known real website and accessing your account.  There are all kinds of tax season and IRS phishing scams.  Be suspicious.  Know the IRS never contacts you be email or phone; they use US mail only.  Most recently users of popular tax software programs have been subject to phishing attacks.


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Emerging Market ETFs and Global Risk

 A recent paper studied investor flow into and out of emerging market ETFs and found they amplified global risks and ignored local conditions unlike market indexes and and mutual funds which did not.

I recommend reading the paper, because it suggests to me that investors ignore what is going on with the actual holdings of the ETF within a more comprehensive macroeconomic assessment.  This exposes those local markets to an exaggerated global financial risk and increases market volatility.

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Exchange Traded Funds 101

I have written some short articles on ETFs trying to discuss potential liquidity problems, some inappropriate structures, and trading costs (as opposed to buying and holding) and I have some more articles planned as I have time to write.

The newest edition of the Journal of Economic Perspectives has an interesting article, which is linked in my Daily Research Links available to subscribers, entitled "Exchange-Traded Funds 101 for Economists".  While the article addresses structure and types of funds, liquidity, trading implications,

Estimating Potential GDP and Output Gap

 I have been very interested  in output gap estimating and researching the issue, because there are economic theory conflicts which muddy what governmental fiscal policy should be.  While I have not had the time to pull my research together in an article, I continue to follow the subject and add to my research.

The CBPP has a new paper out entitled "Real-Time Estimates of Potential GDP: Should the Fed

2018 Employer Withhholding May Turn and Bite You

The New IRS withholding calculator will not be available until February, the old W4's will continue to be used despite no longer reflecting the new tax law and 2018 employer withholding may result in under withholding  resulting in higher taxes owed at year end and possible tax penalties, particularly if there is more than one income in the family, you work at more than one job during the year, and/or you have multiple jobs at the same time.

You will need to proactively monitor and review your withholding, including using the new

2018 Tax Facts and Dates

 Morningstar has published a very succinct listing of 2018 tax facts, as a result of the new tax law, and important tax dates in the link above. The Pursuit of Financial Happiness(TM) has always been about information.  Some people, when reading our articles, do not read or dismiss the embedded links which provide not only pro but

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

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. 

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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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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