December Day

Fri, 2017/12/01 - 5:12pm | Your editor
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The US stock market is quivering on the start of the final month of the year, because of worries about the administration's tax plan now derailed again in the Senate, plus fear that the Administration's Russian overture will turn out to have been ordered by the President himself coming from investigation by his interim adviser Michael Flynn. Secretary of State Rex Tillerson is rumored to be on the ropes.

The US dollar and stock shuddered after the Markit manufacturing purchasing managers index missed the upbeat forecasts, coming in at a respectable 53.9 but nowehre near the forecast of 54.5. Anything over 50 shows expansion.

Egypt has reacted to the latest Trumpian barrage against Muslims by signing up to allow Russian bases on the Mediterranean, something not imaginable since the days of Gamal Nasser.

Russia has also announced that it will not receive John Huntsman, the new US envoy to the country. And it defended Kim Jong Un of North Korea at the UN against what its Foreign Minister Sergei Lavrov called “a bloodthirsty tirade” by the President. However Russia will receive British Foreign Secretary Boris Johnson in the hope that he will indiscreetly reveal something he shouldn't.

It doesn't help that the internal contradictions over the Tory coalition in Britain Irish border policy puts the UK at risk of losing its majority which depends on the Northern Irish Democratic Unionist Party votes. That brings on the specter of Jeremy Corbyn's lefty Labour Party taking over.

On this unhappy day the haven of choice for Wall Street is Canada, bitcoins, and some commodities.

 

There are several elements of the new tax code which do not look like surviving an informed vote, assuming Congress gets this. One hidden charge to boost tax receipts came to my attention because it affects investors. If after the tax bill is passed you want to reduce your positions in a stock where you have large profits, the new law will require that you use first-in-first out shares to trade, or FIFO. That means your long-term winning trades will be more heavily taxed than if you can use last-in-first-out, or LIFO, as at present. You do have to balance short term trades (positive or negative) in a separate part of your IRS forms, but until now it has been your choice which lots are sold.

I am going to be reworking my tax planning this month to cover the new bill risks, on the off-chance that Congress will not remove this penalty clause. The only alternative at present is to leave the big winners in place until you die, and your heirs can liquidate them based on the valuation on the date of your death rather than when you bought the stock 50 years earlier.

 

More from China, Mexico, Finland, Britain, Denmark, Argentina, and South Africa about internet stocks, and more on other sectors follows. I lost my work when the exderminator came to clear out the roaches and started afresh afterwards.

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