Showing posts from November, 2016

The Securities Law Blog: Finra fines Lincoln Financial broker-dealer $650,0...

The Securities Law Blog: Finra fines Lincoln Financial broker-dealer $650,0...: Didn't we do this already? FINRA fined Lincoln Financial last week for failing to secure client data. But 5 years ago, FINRA fined Lin...

Good read. Love this blog. - Chad Hagan

IRS Sinks Subpoena Teeth into Virtual Currency as Taxable Property, Seeks Coinbase's Transaction Records - Venable LLP

Full Article, Reprint From Lexology 

On November 17, 2016, the Internal Revenue Service (IRS) filed a Petition for Leave to Serve a John Doe Summons (subpoena) on Coinbase in the in U.S. District Court for the Northern District of California. The IRS's position is that a large number of taxpayers, many of them holding Coinbase accounts, have not paid tax on gains from trading in virtual currencies, defined as property by the IRS (IR-2014-36, March 25, 2014). The subpoena requests all records of virtual currency transactions by U.S. persons from January 1, 2013 to December 31, 2015. Coinbase reports to have 4.9 million users worldwide. The petition is based on the authority granted to the IRS in 26 U.S.C. 7609(f). This allows the IRS to request a court to issue a subpoena to third parties for information relating to an unknown individual (John Doe) or unknown class of individuals. In order to prevail, the IRS must establish that: The summons relates to the investigation of a partic…

Forecasting Trumponomic Inflation

Link w/ Data & Image

The above charts shows a forecast.
The RED line is the Fed's 5 Year Forward Rate, the BLUE line shows a forcast of .5% inflationary growth per year over the next few years, begining next year. This is NOT a stretch (2011-2012 inflation rate increased from 1.94 to 2.45% alone). In June, consumer prices increased 1.7% over the previous month alone in Nigeria, according to the National Bureau of Statistics. Granted, the US does not have such inflation volatility.

Here are a few factors to think about:

1. A crack down on illegal workers will (or could) stress the hourly wage index
2. Infrastructure Spending (To be frank: Multi-Trillion Dollar Infrastructure Spending)
3. Trade Isolationism, Increased Import Tariffs, Export Losses

The above situations are already on the agenda. Of course a level of inflation is always there, but I am curious if the above chart is coservative. The chart below has an exponential trendline (in green) showing the uptick from the CPI…

Increasing Disposable Income In The US

From an economic perspective, ending trade and "making" corporations stay in the country is not the right move. Nor is printing more money. This is slowest US recovery on record...But we don't need to become ethno-nationalistic isolationists.

What will continue to create more disposable income and more jobs for the middle class? In this new era of slower growth and political change what is the next proposal? Reaganomics alone will not do it.
To stimulate the economy, the United States and governments worldwide have pursued economic policies, including low interest rates, that have increased the possibility of higher inflation. Like stock prices and interest rates, future inflation is unknown. Therefore, positioning your portfolio to weather various inflation scenarios is a smart move. Although there are effective strategies to counter its corrosive effects, no single investment serves as a reliable hedge in every inflation environment because other powerful forces such a…

Trade Deals - Regional Comprehensive Economic Partnership (RCEP), Asia Pacific Economic Cooperation (APEC), Trans-Pacific Partnership (TPP)

If the USA steps out of TPP (as the graphs depict) other trade blocs: APEC and RCEP -  will pick up the pace and cover the gaps.

Regional Comprehensive Economic Partnership (RCEP), Asia Pacific Economic Cooperation (APEC), Trans-Pacific Partnership (TPP).

IRS: Coinbase We Need Your Client Records

I remember those high flying altcoin days. So much speculation about who was using the currency in bulk: drug dealers, crime syndicates, investors, gamblers...I was curious how it would shake out, and it seems the main interest of the IRS is to grab those who used BTC (bitcoin) as a tax evasion vehicle. I can only wonder if they will go after sales tax. Sales tax on black tar heroin or stolen IDs bought from Silk Road would tip the scale, and define the line on how the Feds feel about drug sales tax. However, simple point of sale retail transactions (like pizza or a haircut in Brooklyn) could implicate merchants and penalize seemingly innocent early adapter bitcoin users.
I will add the request is for a three year period of records. There is more in the docket at the bottom of this post. 
Happy (Early) Thanksgiving.  - Chad 

'The IRS further justifies its request by claiming it is targeted toward a specific group of people; namely, US taxpayers who have conducted transactions with vir…

Zermatt Ag Prices -

Ag % - all over the place...

Mexican Peso Slide Will Continue

While USD is wrapping up its best week in a year the MXN peso has taken a continued beating
Investors are worried if and how Trump policies could effect exports from Mexico, the No. 2 economy in 
Latin America, driving the peso lower and creating expensive money for Mexico. 

While the Peso hit an all time low, Mexico's 30-Year bond had a spike. So far credit ratings have not been effected, but it is too early to tell. Mexico's credit rating was moved to negative in March of this year by Moodys, moving down from stable. Moody's did not mention the US election as a risk but stated: "Subdued economic performance and continued external headwinds will challenge the government's fiscal consolidation efforts and increase the risk that rising debt ratios will not stabilize over the rating horizon."

Meanwhile the peso slid against the Israeli Shekel (ISLMXN) and the Singapore Dollar. While both pairs are a tad exotic, it is significant and fully represenative of the glo…

Mexico 30-Year Bond Yield (3 Month Snapshot) -

There was a spike...

The Black-Swan Event That Could Lead To Inflation

The Trump victory is essentially Brexit Two, or perhaps more apropos: the US Brexit.

Despite the turmoil of election night, most losses will not sustain.
Arguments can be made that the spikes with ES & GC were due to hedges in place in case of a black swan event. I was asleep at the switch on Trump; I expected a catastrophic GOP loss. However, it does seem that we overreacted to the idea of Trump and - despite it being early - the US markets are not taking hits like Brexit.

Trump is a real estate guy and he may make the right moves. He is not an economist, technologist or a lawyer, but he does know how nuts and bolts industry work (to a degree). I imagine that he will stick to the age old tip of choosing people smarter than yourself, and choosing the smartest person for the job. Let's hope he has goals in sight because he has the ability to pick the greatest group of economic and public policy advisors ever seen. If that is the case then America will turn around. I do not see…

Gold Since 1975 (F:GC) 1975 - Today Gold Chart

Gold Since 1975 (F:GC)

Thank you Zermatt

Brent Crude Election Night

You see some def. spikes, but then it's back...The Trump reversion to the mean? A debt bomb which soothes over with a tranquil chat at 3am?

F:GC - Spot Gold Volume Snapshot

F:GC - Spot Gold Snapshot

from Zermatt

Wisconsin Building Commission Approves Multiple Infrastructure Projects - Muni News

Always enjoyable digging deep in these deals.

"Last week, the State of Wisconsin Building Commission, a seven-member board chaired by Governor Scott Walker, approved several infrastructure projects, which can now move on to the next stage toward implementation. The membership of the Commission consists of three State Representatives, three State Senators, and a citizen member.

Renovation of the Towers Residence Hall at UW-Eau Claire – $33 million This project renovates both ten-story Towers Hall Renovation wings to provide additional common areas, and improve resident rooms, bathrooms, and hallways to meet current standards, and other improvements. The Towers Residence Hall was constructed in 1966, and has not been remodeled since the original occupancy.

Renovation of the Witte Residence Hall at UW-Madison – $47 million A major renovation to this building over a two-year span to address mechanical issues, improve the resident spaces, and upgrade the facilities. New, expanded bat…

100 Years of Gold Bullion Troy Oz

I will say that in 1916 $400.00 was worth $8,800.00+ in 2016 dollars - Chad

From MacroTrends

Kindred Healthcare Skilled Nursing Case Goes To SCOTUS Over Arbitration Agreements

On October 28th of this year this US Supreme Court (SCOTUS) granted a petition to hear the case: Kindred Nursing Centers Limited Partnership v. Clark.

The buzz in the skilled nursing industry is that SCOTUS is going to shut down arbitration.

CMS has also issued a new anti-arbitration rule - before the SCOTUS review and decisions - that bars any nursing home that receives federal funding from requiring that its residents resolve any disputes in arbitration, instead of court. In what seems to be a mixed set of reviews and opinions, operators are either accustomed to not using and therefore not enforcing arbitration, or the opposite: they use arbitration all the time. I have heard first hand that the CMS rule bars any mentioning of voluntary arbitration as well. Larger corporations use arbitration for a wide array of reasons, and this ruling will add millions in additional costs to the bottom lines of public equity post-actute groups like:

KND ,ENSG, ADK, GEN, CSU, PBD and PUW and others. W…