Paper Chase: Give and Take

The market has been on a roller coaster ride over the past couple of weeks with momentum stocks and earnings driving volatility. Retail sales rose by 1.13%, the biggest increase since September 2012 and was ahead of analysts’ expectations. This is important because consumers are 2/3 of the American economy. Single family home sales have also increased due to improved weather. These numbers are the best of year but still weaker than analyst’s expectations.


The Dow has seen swings of hundreds of points, and the NASDAQ has seen swings of multiple percentage points. We are at an inflection point for monetary policy meaning market participants think that policy will change. They bring the market forward in time and expect it to be sharper than is consistent with sustaining economic expansion. We should get used to this volatility.

Yellen’s Message

Interest rates will stay low for a long time. Her remarks seemed to be more reassurance aimed at the American people more than investment community. Yellen is very concerned about unemployment, and indicated there would be no imminent further tightening of monetary policy. The fed will carry on with taper, but Yellen is not as concerned with inflation as much as she is with general support to the economy.
Give and Take
She also believes that the fall in unemployment will not put upward pressure on prices anytime soon.
Give and Take
Yellen’s remarks were painfully evenhanded. The overall message was that rates would be lower for longer. in spite of perceived turmoil, Yellen has had an easy entry into the Fed chair job. Payroll data hasn’t been strong enough where the fed is behind the curve nor has it been weak enough to instill a feeling the economy is stalling out. Yellen has been essentially untested. Last quarter, the economy tracked at a 1 percent annual rate. The 2nd quarter looks as if growth is at 3.5%. When monthly numbers are consistent with 3.5% expansion in the economy and non-farm payrolls start with 2 or 3, Yellen will be tested.
Give and Take


With 17% of companies reporting, 63% came in above their estimates, 14% met estimates and 26% are below estimates. The question of how much can be blamed on the weather has been covered on the Paper Chase extensively. There were many cautious forecasts anticipated declines in earnings. Stocks trading at record highs was thought to be out of sync with what was likely to happen inside the companies. There have been some earnings disappointments, particularly Google, which underlies some of the risk that stalks the tech sector where investors have gotten ahead of themselves. Still, earnings have not been as bad as people have feared.
Google Earnings
**information unavailable at this time
The S&P 500 is not just the domestic economy but the world at large. the numbers we are seeing are consistent with tepid, cyclical expansion in the U.S. economy while world hangs on.

10 year note

The 10 year note has remained at or below 2.65 for some time now. This is purely a case of being the Best house on a bad block. The U.S. treasury is a safe haven asset and the world is a risky place.


We have previously reported on the Ukraine. This is now spilling into the market. Over the previous years, emerging markets were where growth and opportunity existed. This has changed dramatically over the past year for the fed is tightening policy and there has been a pull back. Ukraine reminds everyone there is political risk in emerging markets, which is why people are going to the safe haven that are U.S. treasuries.

Bull or Bear?

Earnings are solid, growth is coming back and the fed will be accommodating in the near future. All of these indicate the continuation of this bull market. I suggest putting your money back into equities.

Corporate Taxes

S&P 100 companies pay roughly 30% lower rates on international taxes than U.S. taxes. Tech companies – including Apple, eBay and Google – seem to specialize in paying up to 80% lower rates abroad. Six S&P 100 companies are actually paying a negative overall tax rate and are therefore due a tax refund: Abbott Laboratories, Morgan Stanley, Bank of America, AIG, Bristol-Myers and Verizon. Among the remaining companies that owe taxes, Citi, VISA, AbbVie, and MetLife pay the lowest rates. The average S&P 100 company pays a 14% higher tax rate than the top 3% of consumers.
Give and take

Tax Reform

give and take
While job creation has not been great, we have seen soaring corporate profitability driven by multinationals. Production is incentivized overseas at the competitive disadvantage of domestic firms here. One suggestion is to end the deferral of foreign based earnings, as earnings should not be kept out side of the U.S. tax base essentially forever, and put them on an equal footing with companies here. Lowering the rate and broadening the base is also good, but ending the ability of multinationals to get tax breaks that don’t benefit domestic firms particularly deferral has gained some traction.
give and take
On the other hand, the U.S. only taxes overseas earnings of U.S. chartered companies. Beefing up taxation on U.S. chartered companies on foreign earnings in hope they invest here instead of abroad is a start, but many companies investment through foreign chartered companies which remain tax-free.
corporate tax rates

Ending Loopholes

Another suggestion is a minimum tax on foreign earnings of U.S. companies in addition to closing loopholes. Another more radical idea is to stop collecting this tax at the corporate level and do it at the shareholder level. In other words, tax American shareholders of publicly traded companies on dividends and capital gains at ordinary income rates. Capital gains would be taxed as they accrue which is controversial as you would be taxing unrealized gains though they are real parts of your wealth. If the stock market drops, you claim a loss but you would need to have enough income to deduct that loss. While I believe this is out of the realm of possibility, it is not enough to tinker with a system that is fundamentally flawed and will never really be able to make work effectively.

Give and Take

What works for teaching good values? How do you raise a moral child? It is not enough to praise good behavior. Parents must praise the overall personality that encompasses that good behavior. When bad behavior occurs, criticism should focus on the action and not the person. Children who develop strong values helping others attain the most extreme career outcomes meaning they either become the worst performers or the best performers. People who help others end up sacrificing themselves to help all the people, all of the time with all of their requests which can be a recipe for disaster.
People are either givers, takers or matchers. Takers get as much as possible from others. They never give anything back, and hog interesting work for which they get all of the credit at the end of the day. Givers enjoy helping others with no strings attached. Most people are matchers. I’ll do it for you if you do it for me. Matching has become a risk averse mentality and creates a transactional impression of not caring about people as opposed to what they can do for you.
Data suggests the most productive engineers, best medical students, and highest performing sales people are those who give freely without strings attached, but are able to match when they encounter a taker. An example of this is the President of Cinnabon, Kat Cole, a former Hooters waitress who had to drop out of college to help her family. Givers learn more and have more expertise and knowledge thank takers for they often assume other people’s tasks and learn more.


Detroit will auction off 16,000 abandoned houses the city has acquired. The opening bids start at $1000, but this is not speculative. Owners are expected to rehab the houses, and live on site within 6 months of closing. The deal is available to Michigan residents only.
Disclaimer: Killing The Breeze is not a registered investment advisor or advisory service. It does not tell or suggest which securities or currencies should be bought or sold. The employees or affiliates of Killing The Breeze may hold positions in the stocks, currencies or industries discussed here. There is a very high degree of risk involved in the market. Killing The Breeze assumes no responsibility or liability for any trading or investment results. All content posted is for educational purposes only and independent advice should be sought from a professional to confirm validity and accuracy of any claim made.
The information should only be a starting point for doing additional independent research in order to allow you to form your own opinion regarding trading decisions. You should ask the firm with which you deal about the terms and conditions of the specific securities which you are trading and associated obligations. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.



Kwaisi France

An 80’s baby forged in the 90’s and unleashed upon the world in the 21st century, Kwaisi France is a Baltimore raised Brooklyn resident.

You may also like...

21 Responses

  1. December 8, 2017


    […]below you will find the link to some web sites that we assume you must visit[…]

  2. December 9, 2017

    bulk email service

    […]one of our guests lately suggested the following website[…]

  3. December 9, 2017

    wanachi waterproof massager

    […]that would be the finish of this article. Right here you will come across some web-sites that we consider you will enjoy, just click the links over[…]

  4. December 9, 2017


    […]Every once inside a although we decide on blogs that we read. Listed below would be the most up-to-date internet sites that we decide on […]

  5. December 9, 2017

    save a marriage

    […]we came across a cool web page which you may well love. Take a look for those who want[…]

  6. December 9, 2017

    realistic suction cup dildo

    […]check beneath, are some entirely unrelated websites to ours, having said that, they are most trustworthy sources that we use[…]

  7. December 10, 2017

    […]Wonderful story, reckoned we could combine a couple of unrelated data, nevertheless really worth taking a search, whoa did a single understand about Mid East has got a lot more problerms too […]

  8. December 10, 2017

    […]the time to study or check out the material or internet sites we’ve linked to below the[…]

  9. December 10, 2017

    amazon web service

    […]one of our guests just lately proposed the following website[…]

  10. December 10, 2017

    hitachi wand massager

    […]Here is a great Weblog You might Locate Exciting that we Encourage You[…]

  11. December 10, 2017

    ken calhoun

    […]Sites of interest we’ve a link to[…]

  12. December 11, 2017

    Bola Tangkas

    […]usually posts some really fascinating stuff like this. If you are new to this site[…]

  13. December 11, 2017

    ION Casino

    […]Here is a superb Blog You might Find Exciting that we Encourage You[…]

  14. December 11, 2017


    […]we prefer to honor lots of other internet web pages around the net, even if they aren?t linked to us, by linking to them. Under are some webpages worth checking out[…]

  15. December 12, 2017

    bank coaching centre in vellore

    […]please visit the web-sites we adhere to, which includes this one particular, because it represents our picks through the web[…]

  16. December 12, 2017

    viral video

    […]usually posts some pretty interesting stuff like this. If you are new to this site[…]

  17. December 12, 2017

    Sheepshead Bay Dryer repair service

    […]we came across a cool web page that you might appreciate. Take a look in case you want[…]

  18. December 12, 2017

    security camera companies near me

    […]here are some links to sites that we link to simply because we think they’re really worth visiting[…]

  19. December 13, 2017

    sexual health

    […]Every once in a whilst we choose blogs that we study. Listed beneath would be the most recent sites that we choose […]

  20. December 13, 2017

    computer virus removal near me

    […]usually posts some extremely interesting stuff like this. If you are new to this site[…]

  21. December 13, 2017

    computer virus removal service

    […]very handful of sites that come about to be comprehensive beneath, from our point of view are undoubtedly very well really worth checking out[…]

Leave a Reply