Democrats in Congress are writing up some of the biggest tax increases in history, but not before making sure they protect their friends with loopholes and carve-outs. If they really want to soak the rich, why isn’t taxing municipal bonds, which are the exclusive province of the wealthy, on the table? The tax rate on muni bond interest is 0%. The existing tax rate on capital gains for high-income investors is 23.4%. The Wall Street Journal examines Democrats' actions, writing: The House Ways and Means Committee section of the $3.5 trillion tax and spending bill includes myriad tax carve-outs … [Read more...]
About Jeremy Jones, CFA
PRECIOUS: Automakers to Treat Microchips like Platinum
In response to chip shortages that have plagued the auto industry, automakers will be creating new supply lines that treat chips more like platinum or palladium than just another part. Stephen Wilmot reports in The Wall Street Journal: The once-obscure world of automotive microchips will never be the same again. It has been a difficult month for the car industry. Manufacturers such as Toyota and General Motors have announced sweeping reductions to their fall production schedules for want of parts, particularly semiconductors. Consulting firm AlixPartners said Thursday that the chip … [Read more...]
Facebook Complains Your Privacy Hurts Its Profits
Facebook Vice President Graham Mudd has complained in a blog post that new privacy enhancements on Apple products have impeded its advertising tools. Bowdeya Tweh reports for The Wall Street Journal: Facebook Inc. FB +1.03% said that Apple Inc.’s recent changes to enhance privacy for users of its mobile operating system are impeding tools that the social-media giant uses to help advertisers measure the effectiveness of their campaigns. In a blog post Wednesday, Graham Mudd, Facebook’s vice president of product marketing, said the company has heard from many advertisers that privacy changes … [Read more...]
An Inflation Warning
In the Financial Times, Robert Armstrong interviews Larry Summers and Nouriel Roubini about inflation. He writes: Summers does not buy the notion that current inflation is the result of temporary bottlenecks. Whenever demand exceeds supply, the inflation that results is made up of a series of bottlenecks, each apparently temporary: “If you thought demand was running hot relative to supply, you would expect there would be bottlenecks. You’d expect inflation to feed through selectively. And there is every reason to think we are going to see new bottlenecks. I read a story today that there is a … [Read more...]
Corporate Landlords Get a Boost from Rent Inflation and Return to Cities
Big corporate landlords are reaping the benefits of soaring rental price inflation and a migration back to cities by young workers. Will Parker explains in The Wall Street Journal: Despite a yearlong national eviction ban and continuing pandemic, it has rarely been a better time to be a big apartment-building landlord. National asking rents rose 10.3% in August, measured on an annual basis, according to Real Page, a rental-management software company, which analyzed more than 13 million professionally managed apartments. That marked the first double-digit increase in the more than 20 years … [Read more...]
These are the Seeds of Hyperinflation
Jerome Powell’s term as Federal Reserve Chair ends in January and President Biden must decide if he will reappoint Powell or pick somebody else. Populists on the left want Powell replaced. In the eyes of many liberal economists, Powell has done well. He has printed trillions, crossed a red-line the Fed in its over 100 years history never crossed by purchasing high-yield and corporate bonds, ignored rising inflation, and nodded to disparities in racial unemployment and climate change. What more could a Keynesian ask for? Apparently, Powell’s approach isn’t interventionist enough. The Fed … [Read more...]
WHAT IS CHINA HIDING? Blogger Crackdown Obscures Market Picture
The Chinese Communist government has begun a crackdown, arresting market influencers and scrubbing the internet of negative news about the country's markets. The Financial Times reports: China has launched a crackdown on financial blogs and social media, a move that risks exacerbating the difficulty of obtaining reliable data about the world’s second-biggest economy. The restrictions were implemented as fissures widened in the top echelons of Wall Street over whether investing in China was a smart bet. A snowballing policy overhaul has caught seasoned China investors off guard, spooked … [Read more...]
Despite the Spin, Slower Inflation Is Still Inflation
Despite what the administration wants you to hear, the August inflation report was still pretty bad for American consumers. Prices went up, and not by a small number. Just because inflation was slower than July or June doesn't change that it hurts American families. The Wall Street Journal's editorial board discusses the report, writing: We’re old enough to remember a time—earlier this year—when 5.3% consumer-price inflation was considered high. No longer. Nowadays when price rises hit that pace, as they did in August, everyone’s supposed to relax because that means inflation is … [Read more...]
LEAK: Insider Study Finds Instagram Feeds Toxic Girl Culture
A study performed by Instagram has been leaked, and its findings are frightening. The evidence shows that Instagram insiders know that the platform feeds a toxic environment for teenaged girls, who obsess over the content they find there. The Wall Street Journal reports: About a year ago, teenager Anastasia Vlasova started seeing a therapist. She had developed an eating disorder, and had a clear idea of what led to it: her time on Instagram. She joined the platform at 13, and eventually was spending three hours a day entranced by the seemingly perfect lives and bodies of the fitness … [Read more...]
Chinese to End Ant Group’s Data Powered ‘Monopoly’
The Chinese Communist government is stripping Alipay, owned by Jack Ma's Ant Group, of its lending platforms Huabei and Jiebei. The government will also force the company to turn over user data. Sun Yu and Ryan McMorrow report in the Financial Times: Beijing wants to break up Alipay, the superapp owned by Jack Ma’s Ant Group that has more than 1bn users, and create a separate app for the company’s highly profitable loans business, in the most visible restructuring yet of the fintech giant. Chinese regulators have already ordered Ant to separate from its main business the company’s two … [Read more...]
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