Couple of friends have told me that I’m way too pessimistic thinking that the Dow will go to about 8,000 since Obama got re-elected.
Maybe so, but how about an S&P 500 down to 800?
Glance at the below short-run and longer-run charts.
What do you think?
Just a friendly reminder that the tax man cometh the when the ball drops on Times Square.
There are 2 big ones: elimination of the 2% payroll tax “holiday” … and the ObamaCare tax on “unearned income”
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Payroll Tax
For the past 2 years, payroll taxes – you know, the automatic deductions for Social Security and Medicare – were reduced by 2% to stimulate the economy.
The so-called “2% tax holiday” ends on December 31 and there are no apparent moves to renew it.
According to USA Today:
A temporary reduction in Social Security payroll taxes expires at the end of the year and hardly anyone in Washington is pushing to extend it. Obama hasn’t proposed an extension, and it probably wouldn’t get through Congress anyway, with lawmakers in both parties down on the idea.
Even Republicans who have sworn off tax increases have little appetite to prevent this one .
Bottom line: The expiration will cost a typical worker about $1,000 a year, and two-earner family with six-figure incomes as much as $4,500.
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ObamaCare Tax
We written about this one before … see The 3.8% solution … here comes the tax pile-on for details.
In essence, one of the tax increases funding ObamaCare is a 3.8% tax on investment income … essentially slapping payroll taxes on so-called “unearned income”.
The “unearned income” tax applies to:
Of course, the tax doesn’t apply if you don’t have any of the above income sources.
But, if you do have investment income, the tax applied whether you’re a millionaire or billionaire or not.
My official forecast was wrong, but I did post what was, perhaps, the key decoding ring for the election.
Here’s what I said on November 3 in my post The election’s “Rosetta Stone” … really!
The polls have been bouncing all over the place, and pundits are broadly whining that the reason is difference in “turnout models”.
That is, how many more (or less) Democrats will show up to vote for Obama.
To understand the issue, I framed a related – but inverted — analysis by asking the question: by how much does Dem turnout (in swing states particularly) have to exceed GOP turnout for Obama to win?
The answer: Dem turnout has to be more than about 4 percentage points higher than GOP turnout for Obama to win.
Here’s my summary chart … below it are the assumptions and analytical logic.
From the chart: if Dem turnout is about 8 percentage points more than GOP turnout (as it was in 2008), Obama wins by about 4%; if Dem turnout is less than 4 percentage points greater than the GOP’s, Obama loses.
It’s as simple as that …
But, like many others,I thought that GOP enthusiasm would drive turnout and keep the spread to less than 4%.
Exit polls put the differential at about 6%.
Looking back, the enthusiasm was either overstated, or enthusiasm doesn’t necessarily drive turnout.
Right analysis; wrong core assumption.
The red line is what happened …
Punch line: Macy’s is launching 13 new brands and expanding 10 other existing labels that it believes will resonate with shoppers in the 13-to-30 age group.
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Excerpted from The Washington Post’s, “Macy’s launches new brand strategy to cater to millennials, the 13-to-30 age group”
Macy’s new fashion offerings, which are being rolled out this fall and next spring, represent the first phase of the retailer’s intensive campaign to attract the highly sought-after … but challenging bunch. The tech-savvy group likes to spend and it likes brands, but shops differently.
In March, Macy’s restructured its merchandise team to focus on those shoppers and plans to make other major changes in the next three years to further rope them in. Those range from infusing tablets and other technology into the shopping experience to changing displays more frequently.
Boston Consulting Group released a study earlier this year based on a survey of about 4,000 millennials.
The research showed millennials trust their Facebook friends more than corporate ads or experts, and tend to favor spending at specialty stores, discount stores, online or outlet stores.
And they put a premium on speed and convenience.
Christine Barton, a partner at the Boston Consulting Group, says the department stores have a big opportunity to grab this customer, but they need to “refreshen their franchise.”
Edit by JDC
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