Hi Jim,
Below are two examples of the market impact of this somewhat hidden and little talked about tax change by Obama you made mention of back a few months ago.
Winnebago mentions the benefit in the first chart and news release. Beazer mentions that they are applying for the refund the same day.
Both stocks rally hard after 2 months of underperformance and ironically right at times they could have violated their 200 EMA.
Have a Merry Christmas!
CIGA Ryan
Dear CIGA Ryan,
This rewards failure and punishes success. It is an action that will definitively impact the US Federal Deficit in a big way by dumping tax receipts.
Jim
Winnebago Industries Reports Improved Results for First Quarter Fiscal 2010
December 17, 2009 7:00 AM EST
Sales Order Backlog Increase of 350 Percent
FOREST CITY, Iowa–(BUSINESS WIRE)– Winnebago Industries, Inc. (NYSE: WGO), the leading United States motor home manufacturer, today reported improved financial results for the Company’s first quarter of fiscal year 2010.
Revenues for the first quarter of fiscal 2010 ended November 28, 2009 were $81.0 million, an increase of 16.7 percent, versus $69.4 million for the first quarter of fiscal 2009. The Company reported an operating loss of $6.0 million for the quarter, versus an operating loss of $16.9 million for the first quarter of fiscal 2009. Net loss for the first quarter was $1.3 million versus $9.6 million for the first quarter of fiscal 2009. On a diluted per share basis, the Company had a net loss of 5 cents for the first quarter of fiscal 2010 versus a net loss of 33 cents for the first quarter of fiscal 2009. The net loss for the first quarter reflected the positive impact of $4.9 million in tax benefits associated with additional fiscal year 2009 net operating loss carryback due to recent tax law changes; however, no tax benefits have been recorded on first quarter fiscal 2010 pre-tax losses which are not immediately subject to refund.
"We are extremely pleased to see an increase in revenues, as well as posting a small gross profit in our first quarter," said Winnebago Industries’ Chairman, CEO and President Bob Olson. "As difficult as this recession has been for Winnebago Industries and the entire RV industry, we believe the worst may be over."
![clip_image003[4]](http://jsmineset.com/wp-content/uploads/2009/12/clip_image00341.jpg "clip_image003[4]")
Beazer Homes (BZH) Files for $101M Federla Income Tax Refund
December 17, 2009 11:20 AM EST
Beazer Homes USA, Inc. (NYSE: BZH) today announced that it filed an application for a federal income tax refund of approximately $101 million as a result of tax legislation enacted during the quarter ending December 31, 2009. This legislation permitted a five year carryback of tax losses incurred in certain defined periods. Additionally, the Company expects to record a benefit of approximately $101 million to shareholders’ equity (approximately $2.50 per common share) in the quarter ending December 31, 2009 and to receive the refund proceeds in cash during the quarter ending March 31, 2010.
As part of its tax refund filing, the Company has elected to defer taxes on gains arising from the cancellation of indebtedness associated with the Company’s previously reported buy back of certain senior notes. This deferral is permitted under The American Recovery and Reinvestment Act of 2009 and represents approximately $51 million of incremental tax benefit to the Company arising from $148 million of gains previously recognized. Taxes owed on the deferred gains will be repayable starting in five equal annual installments beginning in fiscal 2014 and will not result in a reduction to shareholders’ equity at that time.
The Company previously disclosed that its estimated benefit of applying the five year carryback legislation discussed above was approximately $50 million. Our subsequent decision to elect to defer taxes on the gains arising from the cancellation of indebtedness increased the benefit to approximately $101 million. This decision was reached upon consultation with external tax advisors.
Dear Jim,
So much for fiscal prudence or limitations on quantitative easing. This is definitely the kind of announcement the MOPE faithful do not make until after markets close the day before Christmas.
Best wishes,
CIGA Richard B.
CIGA Richard,
It is neat they sneak this in on the quietest market day of the year.
This alone shows you the mindset that will take gold through $1224 then $1274-$1278 on its way to $1650 and beyond.
Jim
Treasury Removes Cap for Fannie and Freddie Aid
Fannie Mae and Freddie Mac receive unlimited future funds from taxpayers to stay afloat
By J.W. Elphinstone, AP Real Estate Writer, on Thursday, December 24, 2009, 2:38 pm
NEW YORK (AP) — The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac.
The Treasury Department said Thursday it removed the $400 billion financial cap it will provide to keep the companies from failing. Already, taxpayers have shelled out $111 billion to the pair.
Treasury Department officials said the $400 billion limit would be replaced with a flexible formula to ensure the two agencies can stand behind the billions of dollars in mortgage-backed securities they sell to investors. …
Long Bonds
Thursday, December 24, 2009
CIGA Eric
End-of-the-year, holiday trading sessions tends to be thin. As a result, any interpretations made from price and volume are often inconsistent at best. With that said, it is important to note that the price and volume action in the double inverse long bond ETF (TBT) suggests a breakout of the short-term head and shoulders bottom. The 12/11/09 swing high was exceeded on increasing in volume despite holiday conditions. This bullish setup warrants close scrutiny as it implies the following: (1) Higher yields, and (2) a retest of the larger, more significant head and shoulders formation and 1982 trendline over the short- to intermediate-term.
The 30-yr yield and Long-Term Government Bond Total Return Index charts illustrate why the bond market has become the canary in the coal mine. The bear’s growl is intensifying, stay tuned.
TBT: ![clip_image001[1]](http://2.bp.blogspot.com/_m5i6pLhlNWU/SzOwZH4kB0I/AAAAAAAAANU/eJXmT3Q1JpQ/s1600-h/TBT.JPG "clip_image001[1]")
30-YR Yields: ![clip_image002[1]](http://2.bp.blogspot.com/_m5i6pLhlNWU/SzOzHptq4RI/AAAAAAAAANc/hJcqHbc0Eyo/s1600-h/30YR.JPG "clip_image002[1]")
LTGBTRI: 
Dear Jim,
The following article brings to mind recent difficulties with CIT and how a lack of funding for middle American businesses has the potential to knock the already shaky legs out from under the US economy.
Putting aside for a moment the social utility of tax refund-anticipated loans, the fact is this has been an extremely profitable business for Jackson-Hewitt. Without funding, businesses cannot make profits.
Also interesting is the quoted explanation from Santa Barbara Bank that it cannot provide funding "upon a directive received [from its] regulator." This most likely means that Santa Barbara Bank has become subject to a Cease and Desist Order from the FDIC or a State regulator, which is an indication the bank could be on very shaky ground. Santa Barbara Bank is a holding of Pacific Capital Bankcorp which, according to its web site, operates 50 banks along the Central Coast of California and has assets of $7.5 billion.
Best regards,
CIGA Richard B.
Jackson Hewitt Won’t Get Loan-Funding From Pacific Capital
The Wall Street Journal, December 24, 2009, 9:45 A.M. ET
NEW YORK (Dow Jones)–Shares of Jackson Hewitt Tax Service Inc. (JTX) tumbled Thursday after the tax-services company said that a unit of Pacific Capital Bancorp (PC BC) wouldn’t be able to deliver expected refund-anticipated loans, leaving Jackson Hewitt without 75% of the funding for its program.
Pacific Capital’s Santa Barbara Bank & Trust had been expected to match its 2009 contributions to Jackson Hewitt’s program, Jackson Hewitt said in a federal filing. But on Sunday, Santa Barbara Bank told Jackson Hewitt it wouldn’t be in position to originate the loans for the tax season based "upon a directive received by them from their regulator." …
For Jackson Hewitt, it could be without a funding source only months ahead of the tax rush.
"We are separately seeking alternative arrangements for additional financial products," Jackson Hewitt said in the filing. "If no alternative sources are obtained or if such sale is not consummated, it would have a material adverse effect on our business, financial condition and results of operations."
Jim,
Think formula…
CIGA Eric
Senate Passes Measure to Overhaul Health-Care System
The Senate voted 60-39, with all Democrats and two independents backing an $871 billion measure that would extend coverage to tens of millions of uninsured Americans. Republicans opposed the legislation, saying it would raise taxes, widen the federal deficit and hurt private companies such as Hartford, Connecticut-based Aetna Inc.
If this bill passes into law, it will certainly carry consequences reflected by the "The Formula". The formula, in turn, influences the exchange value of the currency.
Formula: 
Leading Formula: 
Dear Jim,
I thought this might be of interest. I think you could likely write a book on the topic!
CIGA BT
Dear BT,
Yes I could and this list hardly scratches the surface.
Little Tatanka (aka Jim)
The five worst ways to buy gold
June 17, 2009
The tripling of the gold price since 2004 has predictably led to something of a stampede for the metal among private investors.
But in their hurry to gain a slice of the precious metal, they do not always take the most sensible route, says Adrian Ash, of BullionVault, the gold bullion exchange.
Below he outlines five of the worst ways to buy gold:
1. Buying gold coins in auctions on eBay
Mr Ash says the prices can outstrip the true value of gold – the ‘spot’ gold price – by 25 per cent even for the plainest coins. Rarer coins are sometimes bid up to an even higher premium. Mr Ash says you should check out the seller ratings, the full item description and the shipping fees.
2. Chasing after ‘rare’ gold coins
The US authorities have given warning that investors should beware of dealers charging exorbitant fees for coins that turn out to be anything but rare. In 2004 a British telesales company was shut down for selling gold coins at 700 per cent of true market value.
3. Newly minted ‘collectible’ coins
As with supposedly ‘rare’ coins, so-called ‘collectible’ coins can cost a lot more than the value of the gold they contain. Mr Ash says the Royal Mint charges mark-ups of 40 per cent plus. The new ‘Countdown to London 2012’ series, priced at £1,295, costs almost twice the value of the coin’s gold content.
4. Rank over-pricing
Many reputable-looking companies can charge way over the odds for gold, says Mr Ash. “Mail-shots, websites and radio advertisements are now selling gold to UK investors at 15 to 40 per cent above the true ‘spot’ market value. One newly-launched company is selling one ounce bars for more than £800 (spot value £600) and kilo bars for £25,000 plus (spot value £19,400).”
5. Unallocated gold storage accounts
When a bank sells you gold but holds it in safe-keeping, the account is often unallocated. This means you do not actually own any gold. Instead the bank owes you a certain amount of the metal. This makes you a creditor of the bank.
