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Friday, March 05, 2010

 

Health reform nose counting

Well,this Monday's resignation of his seat by Rep Massa (D-NY) will reduce Pelosi's count by one vote for the Health bill at a time when she is having some difficulty drumming up 216 votes. So now people are starting to understand that we may never even get to reconciliation (50 plus the Veep) in the Senate. What people haven't spent any time on is the difficulty Reid would have if it did get that far. I don't think 50 Senate votes are at all secure, so the Health Reform bill, though off life support, is still on the very critical list.

After all Senator Byrd is very ill on and off and his vote can't really be counted on. I think Lieberman will be back in play, and so will Sen Lincoln of Arkansas. That would take Dems down to 56, and my guess is that there are easily six or more blue dogs who would abandon ship at the slightest provocation.

So, sooner or later, the Administration is going to have to face facts. They may not be able to get a bill done, and there will be no point in taking a vote that amounts to political suicide for half their party. And still, the stage will be set for a major thrashing in 2010 that I now believe will be bigger than the 1994 rout.

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One thing you haven't read much about here is the Winter Olympics, for the simple reason that I watched very little of it. I did see Neil Young perform at the closing ceremony, which was enjoyable (I can only imagine the young athletes wondering who that old relic is) and I thought the men's gold medal game was outstanding, the best hockey game I've seen in years. The flow of the game is so much better with limited or no commercials, the way it used to be when NHL games took only two hours. Both teams played great and it was somehow fitting that Sid the Kid got the gamer. I didn't see the women's final, but reportedly that was a good game as well.

Otherwise, I thought NBC managed to put more schmaltz and human interest than anything else in its broadcast. Of course they had fertile ground, with the Georgian slider dying in practice, the Canadian figure skater losing her mother and everything. But it did get tiresome for me and I hardly watched. It must have been murder for true Olympics fans over 17 days. Frankly, I got more wound up watching Jim and Pam have a baby on The Office the other night.

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Tonight we're going to Westbury to see the 70's Soul Jam, and I have to admit I'm a little excited. I've seen the Stylistics and the Chi-Lites on TV a few times, particularly on those TJ produced PBS shows, but never in person. Sadly, some of the original personnel has gone on to the eternal bandstand, but it's great that these acts continue to keep their songs and arrangements alive, just like the Big Bands from the Swing Era. Also on the bill, The Dramatics and Carl Carlton.
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Tax time is coming, our next to last under the Bush tax rates and all upper income tax payors should be well into planning for 2011. Unlike the tax strategies we have been used to, the idea now is to accelerate income and capital gains and defer deductions and losses to when they will be more useful. It's a good time to transfer qualified money to non-qualified accounts or do a Roth conversion. Of course, individual considerations may override the general strategy. In particular, individuals, even in middle income brackets, need to consider their vulnerability to the dreaded alternative minimum tax.

So much of the political folderol concerning tax rates, deductions, capital gains and losses etc. ignores the impact of the AMT and therefore mischaracterizes the real world impacts. For many upper income payors, the lower Bush rates have been mostly offset by the AMT, and the expiration of those rates will also have less impact than people think. However, from the standpoint of macroeconomics, the increase in capital gains rates is likely to have a very deleterious effect on the economy.
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On March 1, we bought 500 shares of Great Lakes Dredging (GLDD) for the IRA at 4.52. On Wednesday we sold 400 shares of Newpark Resources (NR) from the IRA at 5.42. 300 were purchased at 7.40 on 3/13/06 and 100 at 5.81 on 7/28/06. On Friday, we sold 100 shares of Standex (SXI) at 25.73, purchased on 7/12/04 at 25.80. These all represent small losses due to first in, first out treatment when, in fact, we sold both above our average cost per share, since later purchases were at lower prices. Time for our periodic disclaimer: neither redwavemusings nor its author are investment advisors. The transactions reported here are for that purpose only and do not imply that the securities mentioned are suitable for other investors, or for anyone (even me).

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