WSJ 1/05/2009

WSJ 1/05/2009
1. Obama eyes $300 billion tax cut
a. Tax cuts to individuals(consumers) and businesses(firms)
i. Business
1. Write off losses in 2008 and 2009
2. 1 year credit for new hires or forego layoffs
3. Write off for broad range of expenditures – up to $250K
ii. Individuals
1. Earned income credit
a. Pay income taxes - $500 (individual), $1000 (family)
b. Phase out credit for income > $200K
b. 40% of proposed stimulus package
c. $775B over two years
i. Bush - $1.35T over 10 years
ii. $174B over first 2 years (2001)
iii. $350B over 10 years (2003)
1. Contained $231B in 04/05
2. A UK lending survey shows banks tightening credit to consumers and to companies
3. Dollar is likely to weaken following disappointing US economic data
4. Treasury debt offerings set to surge even though investors may start to prefer better yields
5. US beef exports expected to decline as foreign currency weakness and global financial crisis hit
6. World wide
a. Germany beginning talks about new fiscal stimulus measures to help revive domestic
b. Britain’s market regulator becoming more demanding and may impose costlier rules on
banks, abandoning previous light touch
c. Bank of Japan looks for ways to combat stronger yen as economy sinks into recession
i. Monetary stimulus: using purchases of dollars to keep yen:dollar exchange rate
lower and yen less expensive