King Report: Who Pays Taxes?



Last night Bill O’Reilly, in a segment about ‘connected firms’ profiting from cap & trade, stated
Goldman made $2B in 2008 but PAID NO FEDERAL INCOME TAXES!

Long-time readers know that we regularly inveigh against US policy that allows corporations to run two sets of books – one for investors and one for taxes. So when the usual suspects appear to whine that US corporations need tax relief, remember that many US corporations pay little or no income taxes while they report great earnings…How much federal income tax will Goldman pay this year? Where’s Congress?

A few weeks ago we warned that just like the previous two years, BLS seasonal adjustments prevented early spring commodity inflation (rallies) from appearing in PPI in CPI; but in June the seasonal adjustment process would inject the inflation that occurred early. This occurred yesterday with PPI.

Though PPI at 1.8% was double expectations, in reality inflation was not that strong in June. The BLS understated energy and food inflation in the spring and will overstate inflation in June & July.

Press releases noted that energy inflation (+6.6%, gasoline +18.5%) was the reason for the jump in PPI.

Once again we have better than expected retail sales (+0.65% m/m) due to inflation. ‘Core retail sales were 0.26%… Ex-food services, retail sales declined 10.3% y/y…Why won’t the government report ‘core retail sales’ (ex-food & energy) like it does for PPI and CPI?

BN: New York Commuter Traffic Falls ‘Significantly,’ Agency Says Commuter traffic on the Port
Authority of New York and New Jersey’s bridges, trains and tunnels dropped “significantly” in the first
half of 2009 as job losses mounted, the authority said today.

Volume on the authority’s six crossings between New York City and New Jersey fell 3.1 percent to 59.4 million vehicles from the same period a year ago, with Lincoln Tunnel traffic dropping 5 percent, the agency said in a statement. Ridership on the agency’s PATH trains declined 3.5 percent to 35.7 million… Truck traffic dropped 11.2 percent to 3.8 million in the first half, costing the authority $3.6 million in toll revenue…

Morton Zuckerman op-ed in WSJ: The Economy Is Even Worse Than You Think The average length
of unemployment is higher than it’s been since government began tracking the data in 1948.
Here are 10 reasons we are in even more trouble than the 9.5% unemployment rate indicates:

AP: Obama says unemployment will keep ticking up President Barack Obama conceded Tuesday that the unemployment rate will keep growing for “several months” as he prepared to head to battered Michigan to unveil a plan to help train people for the next generation of jobs.

Reuters: U.S. government officials are weighing a plan that would let borrowers who have fallen behind on their mortgage payments avoid eviction by renting their homes instead, sources familiar with the administration’s thinking said on Tuesday. [Do you still laugh when we invoke ‘Fall or Rome Stufff?]

The American Thinker: Will Dems allow Goldman to manipulate a cap-and-trade market?
Goldman Sachs, the Wall Street leviathan that is heavily invested in the cap-and-trade carbon market scam, has admitted it has developed and used software that can manipulate such financial markets…
From the mortgage bubble, Goldman learned an important — and very valuable — lesson: Government policies, especially if shaped by a network of former Goldman officials, could be used to create vast profits, indeed whole markets…

Having survived, thanks to the million-dollar bailout from Obama and the Joyce Foundation, the
Chicago Climate Exchange went on to merge with Climate Exchange Ltd in 2006. Goldman Sachs took a 10% stake in the firm at the time and later increased its holdings to at least 19%. CCX is also 10% owned by Generation Investment Management, a firm founded and chaired by Al Gore and co-founded by the above-mentioned former Goldman CEO, Hank Paulson.

BN: The U.S. Justice Department is investigating the market for credit-default swaps, according to
Markit Group Ltd., the data provider majority-owned by Wall Street’s largest banks…
The antitrust division sent civil investigative notices this month to banks that own London-based
Markit to determine if they have unfair access to price information, according to three people familiar
with the matter.

Today will start higher on Intel’s better than hoped results. However, Intel has ratcheted down earnings expectations and then beat them for the past few years…How long will it investors to realize the Intel’s earning boost came from China’s huge stimulus package? Reuters: [Intel] Executives warned that the corporate market remained weak, and Intel does not expect much change in the second half.

CPI will impact trading if it is as dramatically at odds with expectations as was PPI…Look for a short-
term stock top this afternoon or tomorrow morning.

The herd mentality of the financial media is on display because a few weeks ago some pundit uttered ‘jobless recovery’. So, virtually every day some scribe pens a story about a ‘jobless recovery’.

The latest episode has Bernanke hypothecating about a jobless recovery. Most people realize that US policy makers are trying to recreate the environment that occurred from 2003 to 2006, when solons tried to paper over rapidly declining US living standards while wealth and jobs were exported.

Besides record Fed promiscuity and the most wanton fiscal policy since at least WWII, jobs, income and GDP in the ‘recovery’ were the worse since The Great Depression – at this occurred with bogus US government economic statistics that grossly understated inflation while overstating GDP and jobs.

Two key components of the recent jobless recovery are unlikely to occur for at least a decade – the
encouragement of consumers to borrow recklessly and to use their homes as ATMs.

The consumer is busted and easy credit as well as the home ATM is a vestige of the wanton age. So, only Fed promiscuity and ‘bust the US’ fiscal policy remain as facilities for a jobless recovery.

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