Capitalogix

100 Years of Income Tax - Infographic Shows How the Brackets Changed

Did you know the top tax bracket in the U.S. was once 94% ... ?

With 2013 marking the 100th anniversary of income tax as we know it, here isa look at what both the average Joe and the average CEO have been paying throughout the years.

 

Browse more data visualization.

 

So what’s in store for the future?

Related articles

US Tax Brackets Spread For the Past 100 Years

Morgan Stanley Explains How Rich New Yorkers And Californians Could Get Really Screwed In A Fiscal Cliff Deal

How Higher Tax Rates Can Affect Your Retirement Plan

Flight to Safety for Markets?

Many traders expected a sell-off after the election.  We got that, and now the market is pretty oversold. So, is it time to jump back in ... or should you pay attention to signs that we are still in a "Risk-Off" trading environment?

Traders know it is tough to call a meaningful 'Market Top' because you have to be right about both price and time.  Adding to the difficulty is that humans seem to be wired to focus on what they missed, so it doesn't take much to trigger buying behavior. 

With that said, sometimes it makes sense to pay attention to warning signs.  In this post, we'll look at a technical warning pattern some traders call  "the four horsemen of the apocalypse".  As you probably guessed, it involves four components.

 

• US Dollar
• US Treasuries
• Gold
• VIX Volatility Index

 

Why are they called the four horsemen? Because when you see all four of these rise at the same time, the underlying message is ominous.

Under normal circumstances, these market symbols are not correlated. In other words, the "horsemen" generally do not ride in the same direction. For example, when gold is going up, the dollar and USTs are normally going down, or vice versa.

When they all rise together, however, it indicates an extreme correlation of "risk-off" and diminished risk appetite across the board.

Here is a composite of all four charts.  The yellow highlit areas show the coordinated move higher.

 

 

According to Mercenary Trader, U.S. Treasuries rise via their designation as the ultimate deep liquidity safe haven instrument.

Gold rises as the "alternative currency" not subject to a printing press -- the safe haven for those who fear U.S. Treasuries are booby-trapped.

The Dollar rises as US investor capital is repatriated from emerging markets (and foreign investor capital flows into bonds).

And the VIX rises as equity risk assets are being shunned ...

Why is this happening now? 

 

One possibility is rising concern over the "fiscal cliff," and the likelihood of partisan deadlock, as the threat of automatic tax hikes loom (via the expiration of time limited reductions). Some believe that the heavy selling we are seeing, especially in market bellwethers like Apple (AAPL), is at least partially the result of capital gains lock-in prior to a higher taxation period.

 

Regardless, it seems the safe move is to position for the worst and hope for the best.

 

Related articles

7 Unexpected Events That Could Blow Apart Investor Portfolios In 2013

The CBOE VIX Is Standing Between You and the Fiscal Cliff

Here Are Some Interesting Links to Read This Weekend

There is something satisfying about a "Perfectly Timed Photo". Click to see others.

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• How to Make One Better Decision Each Day. (Forbes)
• 10 Ways You Can Be More Like Richard Branson. (Entrepreneur)
• Rethinking Sleep. (NYTimes)
• Australians Surge in Quest to Build Quantum Computer. (NYTimes)
• Windows 8 Will Succeed, Despite All the Fear, Uncertainty, and Doubt. (TechCrunch)

 

Trading Links:

• How the Gods of Finance Could Help Solve the Fiscal Cliff. (Businessweek)
• Money Managers Take a Timeout From Stocks. (Wall Street Journal)
• The New Game of Thrones. Sovereign Wealth Funds Rise as a New Category of Investors. (IAM)
• Softbank's 300 Year Vision For Making Customers Happy. (CNet)
• Bye-Bye, PCs. As the PC era wanes, Tablets, smartphones, and big data will drive leaders. (Barrons)

How Confident Are You About Who Will Win the Presidential Election?

With two days to go, Obama's odds of winning re-election have reached 85%, their highest level, according to the Five Thirty Eight forecast.

 

 

Prediction market, Intrade, also has the President maintaining a solid lead, with a 65% chance of winning.

 
  
The difference between the national polls and these results, is that the national polls focus on the popular vote, whereas Nate Silver's Five Thirty Eight forecast focuses on state-by-state polls aimed at determining the winner of the electoral college and, with it, the Presidency. Nate Silver's model also averages hundreds of polls.

Nonetheless, it is a close race, and what you see depends on where you look ... Some polls still seem favorable for Romney (especially on Fox).

But, as election day approaches, and we continue to get bombarded by both sides, remember to take it with a grain of sand and a smile while you remember they are just doing their job.

Mark Twain said it many years ago: "Don't ever let the facts spoil a good story."

 

Some Links for Your Weekend Reading

Squeak, I am your father.  Disney just bought LucasFilms for $4 Billion.

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• The Timeless Strategic Value of Unrealistic Goals. (Harvard Business Review)
• Jeff Bezos: Smart People Change Their Minds. (TechCrunch)
• A Real-Time CyberAttack Map. Scary. (Honeynet)
• Getting At Least 7 Hours Sleep a Night As Important As Exercise In Losing Weight. (360)
• Apple to Samsung: Sorry We Called Your iPad Copy a Copy. Yet transforms court-ordered apology into a rival-skewering piece of advertising. (Allthingsd)

 

Trading Links:

• Ohio Has 50-50 Chance of Deciding Election. (FiveThirtyEight)
• Best and Worst Presidents For GDP Growth. (BusinessInsider)
• Central Banks' New Economic Indicator Might Be Google. Interesting. (Businessweek)
• Why Windows 8 Sales Will Be Slow. (CNN Money)
• New Innovations in HFT. It takes all the running you can do to keep in the same place. (HFTReview)

Some Links for Your Weekend Reading

This photo would be so "perfect" ...

The Romney family misspells their own name in what might be the greatest Freudian slip in US history.

 

However, all you see on the Internet is not necessarily true.  Oh well, it is still funny.

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• 12 Blogs Every Small Business Should Be Reading. (SmallBizTrends)
• How NFL Scouts Evaluate Real Talent. (OpenForum)
• Why Political Convention Speeches Should Be More Like TED Talks. (Slate)
• Anything to Win: Romney Apologizes To Nation's 150 Million 'Starving, Filthy Beggars'. (Onion)
• 30 Pictures of People Freaking Out in a Haunted House. This is so telling ... look at how most people respond to the unexpected. (Funny)

 

Trading Links:

• Welcome to Lehman Brothers. We're Open for Business. (Businessweek)
• CEOs’ Vision Darkens. 34% More Apt to Fire than Hire as Fiscal Cliff Approaches. (Daily)
• Mysterious Algorithm Recently Accounted for 4% of Trading Activity. (Kurzweil AI)
• Cyber-Pearl Harbor: Panetta Warns of Dire Threat of Cyber-Attack on U.S.   (NYTimes)
• Apple Has Quietly Created the World’s Largest Hedge Fund, Worth $117 Billion. (Yahoo! Finance)

Seasonally Strong Period for Gold is Coming

Gold is entering a seasonally strong period.  The chart below shows the predicted turning points based on the past five years of historical data. 

 

 

History does not typically repeat itself, exactly; but it often rhymes.  So, it makes sense to keep seasonal tendencies in mind.  With that said, some things potentially different this year include that this is an election year and world governments are coordinating central bank stimulus actions.

However, the chart below should serve as a reminder that there a lot other markets worth trading too.  For starters, Corn is up 34.3% so far this year.

The chart shows the top-ten performing markets, ranked by yearly performance, for the past few years.   The data is color coded based on sector. The first column posts the current year's open performance followed by six columns of closed yearly market performance.

 

 
Note how much diversification there has been in the top-ten throughout the years.  Click the chart to see an expanded version of this data (showing 40 global futures markets).

That is the funny thing about markets ... something is always working.  The trick is finding it while it's working.

Can Germany Save Itself and the Euro Zone?

The Euro Zone is safe; at least someone is propping up the euro.

The picture was taken last week in the financial center of Frankfurt, Germany. The handmade signs in the foreground are part of the Occupy Frankfurt movement, which is still active a year after it started.
 

 

This visit to Germany prompted some questions. While my observations are not scientific (nor statistically relevant) I'll share a few of them with you anyway.

First, there seemed to be a pervading sense of wariness and weariness. I heard many people express concerns about the economy and the future. "Zeitgeist" is a German word that means spirit of the times ... and the spirit here seems somewhat dampened, despite a 24% gain in the German DAX Index this year.

Second, native Germans are not having babies at the rate they used to. This would typically result in an aging population. However, it seems to have triggered a major influx of immigrants from other countries in the region, like Turkey, but also from Pakistan, Afghanistan and other Muslim nations.

Third, while stereotypical, my sense is that the German national identity was somewhat tied to "craftsmanship". But as their economy manufactures less, it's as if the nation struggles to figure out what it will become. 

Fourth, while America may be a melting pot, historically Germany hasn't been.  So, it isn't hard to imagine the cognitive dissonance felt by a Germans  who don't know how to respond to a Germany that is becoming less "German".

As a result, this newly diverse population is struggling to decide how to allocate resources.

I'm reminded of the warning flight attendants give you on an airplane; if the oxygen masks are deployed, make sure you use them yourself first, before trying to help someone else, because it's tough to help somebody else if you're incapacitated.

By many measures, Germany is the strongest nation in its region. However, the burdens of a new economy and a new world order are hard to ignore.

It may pay to remember the saying: "Pigs get meaner as troughs get smaller."

Here Are Some Interesting Links to Read This Weekend

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• Startups' New Creed:  Patent First, Prototype Later. (Businessweek)
• Are We Really Getting Smarter? Why IQ Scores Have Kept Rising for the Past Century. (WSJ)
• The CIA and Jeff Bezos Bet on Quantum Computing. (Technology Review)
• The Science of Procrastination and How to Manage It (Animated). (BrainPickings)
• Deepak Chopra: The Mideast Protests, Social Networks & the Global Brain. A race between the mullahs & the iPad (TDB)

 

Trading Links:

• America's Richest Hedge Fund Managers. (Forbes)
• Investing Books That Go Above and Beyond. Nice List. (Tadas Viskanta)
• QE3 myths. Monetary Stimulus Doesn’t Punish Savers & Isn’t All About Stock Prices. (Slate)
• CEO Speaker Series: A Conversation with Ray Dalio. (Council on Foreign Relations)
• Book Review: Is “Unintended Consequences” a Scary Preview of Mitt Romney's Economic Policies? (Forbes)

In God We Trust -- The Media, Not So Much Anymore ...

A new survey from Gallup suggests that sixty percent of Americans have little trust in the mass media to deliver the news "fully, accurately and fairly." This marks a record amount of distrut since Gallup began tracking the trend.

The question asked was: "In general, how much trust and confidence do you have in the mass media—such as newspapers, TV, and radio—when it comes to reporting the news fully, accurately and fairly—a great deal, a fair amount, not very much, or none at all?"

Sixty percent answered either "not very much" or "not at all," with the remaining 40 percent opting for either "a great deal" or at least "a fair amount."

Since you probably don't believe this information, here's the chart straight from Gallup; so you can interpret it yourself.

 

According to the pollsters, this year's drop in media trust is being fueled largely by self-identified Republicans and independents. Twenty-six percent of Republicans said they trusted the media either greatly or a fair amount, similar to the level of trust the GOP reported back in 2008, another election year.

Here is the Gallup chart:

 

 

Independents, meanwhile, are much more negative about the media than they were in 2008, something that Gallup says suggests "the group that is most closely divided between President Barack Obama and Republican Mitt Romney  is quite dissatisfied with its ability to get fair and accurate news coverage of this election."

Related articles

• Gallup: Debate Helped Romney (cnsnews.com)
• Congress Approval Rating Slides Back To All Time Lows; 83% Disapprove (zerohedge.com)
• People Are Losing Trust In All Institutions (ritholtz.com)