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For a longer more interesting story of how
macro economics affects micro economic decisions, read Ayn
Rand’s “Atlas Shrugged”.
One of the greatest books ever written.
Howard
<span
>-----Original Message-----
From: mr.ira
[mailto:mr.ira@xxxxxxxxxxxxx]
Sent: Saturday, March 06, 2004
11:17 AM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] sp500/nasdaq top
<span
>
<span
>Speaking of low taxes, I don't
believe that the author noted at the bottom wrote this, but it is an
interesting analogy.
<span
>
<span
>Sometimes Politicians can exclaim;
"It's just a tax cut for the rich!", and it is just accepted to be
fact. But what does that really mean? Just
in case you are not completely clear on this issue, we hope the following will
help.
Tax Cuts - A Simple Lesson In Economics
This is how the cookie crumbles. Please read it carefully.
Let's put tax cuts in terms everyone can understand. Suppose that every day,
ten men go out for dinner.
The bill for all ten comes to $100. If they paid their bill the way we pay our
taxes, it would go something like this:
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh $7.
The eighth $12.
The ninth $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men ate dinner in the restaurant every day and seemed quite happy with
the arrangement, until one day, the owner threw them a curve.
"Since you are all such good customers," he said, "I'm going to
reduce the cost of your daily meal by $20."
So, now dinner for the ten only cost $80. The group still wanted to pay their
bill the way we pay our taxes.
So, the first four men were unaffected.
They would still eat for free. But what about the other six, the paying
customers?
How could they divvy up the $20 windfall so that everyone would get his 'fair
share'?
The six men realized that $20 divided by six is $3.33.
But if they subtracted that from everybody's share, then the fifth man and the
sixth man would each end up being 'PAID' to eat their meal.
So, the restaurant owner suggested that it would be fair to reduce each man's
bill by roughly the same amount, and he proceeded to work out the amounts each
should pay.
And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33% savings).
The seventh now paid $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to eat
for free.
But once outside the restaurant, the men began to compare their savings.
"I only got a dollar out of the $20," declared the sixth man.
He pointed to the tenth man "but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a
dollar, too.
It's unfair that he got ten times more than me!"
"That's true!!" shouted the seventh man.
"Why should he get $10 back when I got only $2? The wealthy get all the
breaks!"
"Wait a minute," yelled the first four men in unison.
"We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for dinner, so the nine sat down
and ate without him.
But when it came time to pay the bill, they discovered something important.
They didn't have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and college professors, is how our tax
system works.
The people who pay the highest taxes get the most benefit from a tax reduction.
Tax them too much, attack them for being wealthy, and they just may not show up
at the table anymore.
There are lots of good restaurants in Europe and the Caribbean.
David R. Kamerschen, Ph.D.
Distinguished Professor of Economics
536 Brooks Hall
University of Georgia
<span
>----- Original Message -----
<font size=2
face=Arial>From:<font
size=2 face=Arial> <a
href="" title="delta88343@xxxxxxx">delta88343@xxxxxxx
<span
>To:<font
size=2 face=Arial> <a
href="" title="realtraders@xxxxxxxxxxxxxxx">realtraders@xxxxxxxxxxxxxxx
<span
>Sent:<font
size=2 face=Arial> Saturday,
March 06, 2004 5:36 AM
<span
>Subject:<font
size=2 face=Arial> Re: [RT]
sp500/nasdaq top
<span
>
<span
>In a message dated 3/5/04 12:08:51
PM Eastern Standard Time, mr.ira@xxxxxxxxxxxxx
writes:
<span
>The government still claims that
there is no inflation. Gas prices are $2.50 per Gal. here. Almost
everything that is purchased is transported by truck. That cost will also
be on the rise.
<span
>
<span
>Housing costs continue to rise. Just
down the road in Palo Alto the average home cost is $985,000. Health care
costs and other insurance costs are skyrocketing as is the commodity
index. How much longer can the government ignore what is happening?
<span
>
<span
>Low interest rates have not created
new jobs here, but India and other foreign countries are having a
boon. We are shipping our jobs overseas where the service and
manufacturing costs are far less. I have to admit, so is the quality
of service provided by the overseas support.
<span
>
<span
>Just some thoughts. Ira.\
<span
>
<span
>This will continue to happen because
it has little effect on the "Haves." Their petrol bill going from $50
a tank to $70 a tank on their SUV is barely worth discussing re: the
household finances. They work for companies that pay their health insurance, or
at least the bulk of it, and the large house they own has doubled in value
the past 5 years. Life is good!
<span
>
<span
>However, for the poor "have
nots", they will continue to suffer regarding the above. Their meager
earnings continue to get eaten away by the massive inflationary spiral going
on. There is no one truly representing them in the media because they are
mostly affiliated with one party. If rolls were reversed, and a democratic
president was in office with the same things going on, you know darn well
the Republicans would be holding congressional hearings, having investigations
left and right regarding everything that is going on in the energy
markets, Bush and Cheney's connections to Haliburton and the massive
energy manipulation play that is going on etc.
<span
>
<span
>I'm not trying to be political here,
but thats the reality. There is absolutely no direction, no vision, no
goal, no leadership within the democratic party. No one is raising any stink
about what is going on, you hear nothing about it in the media and it literally
borders on the criminal.
<span
>
<span
>I am not politically affiliated one
way or the other and I love low taxes. The above is simply my
perceptions.
<span
>----- Original Message -----
<font size=2
face=Arial>From:<font
size=2 face=Arial> <a
href="" title="mailto:earl.a@xxxxxxxxxx";>EarlA
<span
>To:<font
size=2 face=Arial> <a
href=""
title="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
<span
>Sent:<font
size=2 face=Arial> Friday,
March 05, 2004 7:42 AM
<span
>Subject:<font
size=2 face=Arial> Re: [RT]
sp500/nasdaq top
<span
>
<span
>Fascinating market action ... SPX
has rallied to 1162.99 (within my target range) while the price of the June
1150 puts I hold (and had orders for more) has also rallied. This suggests
that the market is putting in a blow-off. Had to short emini since it looks
like they won't fill my put order.
<span
>
<span
>I assume that this rally is all
about the perceived notion that the Fed won't raise rates so the market can
party longer. Not a thought to the fact that continued employment problems
will lead to reduced consumption and other (economic and political) fall-out
from reduced consumer confidence. Foreign currencies are rallying hard which
means even higher energy prices are in the cards.
<span
>
<span
>Earl
<span
>
<span
>----- Original Message -----
<font size=2
face=Arial>From:<font
size=2 face=Arial> <a
href="" title="mailto:earl.a@xxxxxxxxxx";>EarlA
<span
>To:<font
size=2 face=Arial> <a
href=""
title="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
<span
>Sent:<font
size=2 face=Arial> Friday,
March 05, 2004 6:11 AM
<span
>Subject:<font
size=2 face=Arial> Re: [RT]
sp500/nasdaq top
<span
>
<span
>SPX is very close to long standing
target range of 1060-1073 which includes: 50% retracement to ATH, 200%
expansion of Oct02-Mar03 swing, and Dec01-Mar02 triple top.
<span
>
<span
>I closed out long emini position
just ahead of Thursday's close leaving in place a SPX put established on
Wednesday. I also have orders working to add to put position on any rally
from monthly Employment Lie. During the past couple of weeks I've closed out
all trading positions in stocks and now hold significant cash position. I still
like energy stocks and hold core positions to which I will add during any
correction in equities.
<span
>
<span
>There should be good support in the
1015+- area which includes the 38% retracement to the Mar03 low and the
Jun-Jul03 highs. If this area holds, then another run to higher highs (1250+-)
could be in the cards. On a fundamental basis, the market is richly priced and
risks are strongly to the downside should the public lose its taste for
speculation.
<span
>
<span
>Earl
<span
>----- Original Message -----
<font size=2
face=Arial>From:<font
size=2 face=Arial> <a
href="" title="mailto:profitok@xxxxxxxxxxxxx";>profitok
<span
>To:<font
size=2 face=Arial> <a
href="" title="mailto:astrofin@xxxxxxxxxxxxxxx";>astrofin@xxxxxxxxxxxxxxx
; <a href=""
title="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
<span
>Cc:<font
size=2 face=Arial> <a
href="" title="mailto:yacov@xxxxxxxxxxxx";>Yacov Twena
; vincent
; <a href=""
title="mailto:Stuart-Auslander@xxxx Net (E-mail)">U. Stuart-Auslander@xxxx Net
(E-mail) ; Slawek
(E-mail) ; Ronald
McEwan ; <a href=""
title="mailto:rginsat@xxxxxxxxxx";>Ron Miller (E-mail) ; <a
href="" title="mailto:panda2222@xxxxxxxxxxxxx";>panda2222@xxxxxxxxxxxxx
; <a href=""
title="mailto:ntt-list@xxxxxxxxxxxxxxx";>ntt-list@xxxxxxxxxxxxxxx ; <a
href="" title="mailto:cnedgo@xxxxxxxx";>Ned Markson
(E-mail) ; Mike
Burk ; <a href=""
title="mailto:ketayun@xxxxxxxxxxxxx";>Kate (E-mail) ; <a
href="" title="mailto:Jseaton357@xxxxxxx";>Jseaton357@xxxxxxx
; Gocycles@xxxxxxx
; <a href=""
title="mailto:urania@xxxxxxxxxxxxxxxx";>Elizabeth (E-mail) ; <a
href="" title="mailto:dcarter888@xxxxxxxxxxxxx";>doroty.h
; Dom
Perrino ; <a href=""
title="mailto:dan.danc@xxxxxxxxxxxxx";>Dan C (E-mail) ; <a
href="" title="mailto:cyclesman@xxxxxxxxxx";>Cyclesman
(E-mail)
<span
>Sent:<font
size=2 face=Arial> Thursday,
March 04, 2004 9:43 PM
<span
>Subject:<font
size=2 face=Arial> [RT]
sp500/nasdaq top
<span
>
<span
>Most likely 3/5/04
should be a top for a while
<span
>
<span
>get out of longs and if you
have long term gains consider writing calls
<span
>
<span
>most likely next is 1050 on sp
<span
>
<span
>if I am wrong, the max upside is
only 10-15 sp points
<span
>
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