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To: Lizzie Tudor who wrote (17947)	2/28/2004 1:14:32 PM
From: MulhollandDrive	Read Replies (2) \| Respond to of 306849

then, the 03 tax receipts and wham! reality check seattlepi.nwsource.com "H&R Block reiterated its 2004 earnings estimate of $3.65 to $3.85 per share and again stated that it expected "a good but not great" tax season. While the tax season started slowly for the company, H&R Block said that tax filing accelerated in February and it was on track to meet its overall targets for the year. Mark A. Ernst, chairman and chief executive, pointed to the unemployment rate and the number of people who simply have given up looking for jobs, saying that translates into fewer people filing income tax returns. "We're seeing that phenomena happen again this year, probably to a degree a little bit bigger than we had even anticipated thus far," Ernst said. "But it's a little bit early." i actually watched the interview with the ceo yesterday and he pointed out that the numbers of "early filers" was down... what i would point out is that people generally file early when they are looking for tax refunds, file at the last minute when they owe...it's conceivable there might be an upside "surprise" in tax receipts as withholdings were adjusted last year to reflect for the tax cuts

To: Lizzie Tudor who wrote (17947)	2/28/2004 5:18:18 PM
From: Elroy Jetson	Read Replies (3) \| Respond to of 306849

Because of the continued reduction in total payrolls I can now see an understandable mechanism to drive deflation. Since deflation destabilizes the banking system I have always assumed it's extremely unlikely since the Fed could easily create inflation to offset the deflation when measured in dollars - most people living on less even their salaries may be ten times as many inflato-bucks. I think, like Japan, the Fed ultimately doesn't control this process. Money manager Peter Theil is interviewed in this issue of Barron's. He suggests deflation of 1 to 2% per year, another 50% decline in the dollar and a consequent doubling or greater in energy prices - plus a long-term trading range for the stock market between where it is currently and 50% lower. This seems very plausible with a continued decline in wages earned. Even with lower interest rates, money has to come from somewhere to make payments on all the the debt. There is still the issue of our long-term interest rates. Ordinarily those rates would be much higher if it were not for Japan, and to a smaller degree China purchasing our long-term debt. As you probably read, Japan just authorized another $540 Billion to purchase U.S. Dollars and debt for the coming year. They are, in essence, funding our entire Federal budget deficit. If we can experience the beginnings of deflation in spite of that magnitude of financial support imagine what would happen without it. On a seemingly unrelated issue, I have decided I oppose the passage of California Props 57 and 58. Rolling the California debt into $15 Billion of bond issues removes the incentive to repeal Prop 13, which I see as inevitable. I think it's better to have our day-of-reckoning now rather than later.