IGNORE THE POLLS!
Go VOTE!
Posted on 10/24/2008 9:58:19 AM PDT by bimboeruption
Barack Obama has remained cool and confident amid the financial melt down, even as John McCain at times has been embarrassing, lurching from one proposal to the next. But while the polls are reflecting Obama's steady hand, the markets haven't. In fact, they're getting worse by the day as Obama's lead widens.
Most investors know the devil is in the details - and the details of Obama's economic plans are anything but reassuring.
Of course, the market turmoil is first a reflection of grim reality - the bursting of the housing bubble and the billions upon billions in writedowns and losses that have forced upon the hugely leveraged financial firms companies that had cranked big profits during the bubble years.
The resulting credit crunch is hitting Main Street harder than ever before. The country is headed for recession; the only question is: Just how low can the markets and economy go?
It could be a lot lower - it all depends on the policies of the next president.
And, as it looks increasingly likely that Obama will be that man, the markets are casting a vote of "no confidence."
(Excerpt) Read more at nypost.com ...
House Democrats Contemplate Abolishing 401(k) Tax Breaks
Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
October 16, 2008
House Democrats Contemplate Abolishing 401(k) Tax Breaks
Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.
House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.
A plan by Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York, contains elements that are being considered. She testified last week before Miller’s Education and Labor Committee on her proposal.
At that hearing, the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months.
Under Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.
The current system of providing tax breaks on 401(k) contributions and earnings would be eliminated.
“I want to stop the federal subsidy of 401(k)s,” Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.”
Under the current 401(k) system, investors are charged relatively high retail fees, Ghilarducci said.
“I want to spend our nation’s dollar for retirement security better. Everybody would now be covered” if the plan were adopted, Ghilarducci said.
She has been in contact with Miller and McDermott about her plan, and they are interested in pursuing it, she said.
“This [plan] certainly is intriguing,” said Mike DeCesare, press secretary for McDermott.
“That is part of the discussion,” he said.
While Miller stopped short of calling for Ghilarducci’s plan at the hearing last week, he was clearly against continuing tax breaks as they currently exist.
Savings rate
“The savings rate isn’t going up for the investment of $80 billion,” he said. “We have to start to think about ... whether or not we want to continue to invest that $80 billion for a policy that’s not generating what we now say it should.”
“From where I sit that’s just crazy,” said John Belluardo, president of Stewardship Financial Services Inc. in Tarrytown, New York. “A lot of people contribute to their 401(k)s because of the match of the employer,” he said. Belluardo’s firm does not manage assets directly.
Higher-income employers provide matching funds to employee plans so that they can qualify for tax benefits for their own defined-contribution plans, he said.
“If the tax deferral goes away, the employers have no reason to do the matches, which primarily help people in the lower income brackets,” Belluardo said.
“This is a battle between liberalism and conservatism,” said Christopher Van Slyke, a partner in the La Jolla, California, advisory firm Trovena, which manages $400 million. “People are afraid because their accounts are seeing some volatility, so Democrats will seize on the opportunity to attack a program where investors control their own destiny,” he said.
The Profit Sharing/401(k) Council of America in Chicago, which represents employers that sponsor defined-contribution plans, is “staunchly committed to keeping the employee benefit system in America voluntary,” said Ed Ferrigno, vice president in the Washington office.
“Some of the tenor [of the hearing last week] that the entire system should be based on the activities of the markets in the last 90 days is not the way to judge the system,” he said.
No legislative proposals have been introduced and Congress is out of session until next year.
However, most political observers believe that Democrats are poised to gain seats in both the House and the Senate, so comments made by the mostly Democratic members who attended the hearing could be a harbinger of things to come.
Advice at issue
In addition to tax breaks for 401(k)s, the issue of allowing investment advisors to provide advice for 401(k) plans was also addressed at the hearing. Rep. Robert Andrews, D-New Jersey, was critical of Department of Labor proposals made in August that would allow advisors to give individual advice if the advice was generated using a computer model.
Andrews characterized the proposals as “loopholes” and said that investment advice should not be given by advisors who have a direct interest in the sale of financial products.
The Pension Protection Act of 2006 contains provisions making it easier for investment advisors to give individualized counseling to 401(k) holders.
“In retrospect that doesn’t seem like such a good idea to me,” Andrews said. “This is an issue I think we have to revisit. I frankly think that the compromise we struck in 2006 is not terribly workable or wise,” he said.
On Thursday, October 9, the Department of Labor hastily scheduled a public hearing on the issue in Washington for Tuesday, October 21.
The agency does not frequently hold public hearings on its proposals.
http://www.workforce.com/section/00/article/25/83/58.php
YES!!!!
Yes, Hussein, Obama scares the crap out of them.
Businesses don't do well in Argentina and that's the kind of plan the Obomination has in mind.
It’s scary.
I’m listening to Rush right now .... . SCARY stuff.
Obamanoia strikes deep
Into your heart it will creep
Stop hey whats that sound
Arrghh! THE GIANT SUCKING SOUND!!!
Everybody look whats going down
Arrgghh!! The stock market .....
He is not rising in the polls and those that shill for him are publicly worried that they have destroyed their businesses supporting his communist candidacy.
LLS
Obama’s calls to increase capital gains taxes, as well as his communistic sounding plans to take Exxons profits (which posts a profit margin around 7%, not bad, but far below many other public companies) and give his favored demographic group a $1000 energy tax refund can’t be helping equities, but that does not explain the international sell off. Its the toxic assets and derivatives, like CDS, IMO, which is a primary culprit.
BTW, IMO the author of this article is a major league blowhard who waves his arms around and screams hyperbole, and there is some in this article. For example, he says, “It (the market) could be a lot lower — it all depends on the policies of the next president.” Au contraire, Mr. Gasparino, it does NOT all depend on the president’s policies, though they can certainly influence markets.
Check out Charlie Gasparino’s style here (click on audio link):
http://dealbreaker.com/2008/09/charlie-gasparino-leaves-the-g.php
“When you can remain calm and serene when all around you panic it may just mean that you’re a moron...”
Great!
I can’t wait to see it.
The agency does not frequently hold public hearings on its proposals.<<
I wonder why?
Also read Rush Limbaugh's take on this.
Disturbing indeed.
As if markets across the world care about who becomes the next U.S. president. Man this Obama-caused-this-crisis gets so tiresome.
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