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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Riskmgmt who wrote (70946)	2/10/2011 2:01:54 PM
From: elmatador	Respond to of 218649

Warsh, lone hawk on Fed's board, to step down Kevin Warsh, the Federal Reserve's youngest-ever governor and a vocal inflation hawk skeptical of recent monetary easing efforts, said on Thursday he is stepping down from the central bank's powerful board. No reason was cited for Warsh's decision. He joined the Fed on February 24, 2006, and will have served just over five years when he leaves at the end of March. His term was not due to expire until January 31, 2018. A Fed official said Warsh had no immediate career plans after leaving the Fed. The departure of Warsh, a former banker at Morgan Stanley, may tilt the balance of views at the Fed's influential Washington-based nucleus, favoring those who support further monetary easing if economic weakness persists. The U.S. central bank is at a crucial, unprecedented juncture in its history. Having pushed interest rates all the way to zero in response to the worst recession in generations, the Fed has also made commitments to purchase a total $2.3 trillion in government and mortgage bonds. Economists say history will judge the Fed not simply for its response to the crisis but in its ability to withdraw this stimulus in a timely manner, an issue that has been a high priority for Warsh. While his public appearances and speeches were relatively infrequent, they often made a splash, as with a Wall Street Journal editorial piece expressing skepticism about the Fed's $600 billion bond-purchase program published just days after its launch in November. Another key op-ed, back in September 2009, spooked financial markets by suggesting that the Fed's eventual exit from such extraordinary stimulus measures might be more rapid and abrupt than investors had been expecting. A graduate of Harvard Law School, Warsh is among the Fed's richest top officials. Financial disclosures released in July stated that as of 2009, his wife Jane Lauder, granddaughter of the founder of the Estee Lauder cosmetics company, had assets worth at least $66.3 million. Warsh listed assets worth between $702,000 and $1.5 million. Warsh's appointment by former President George W. Bush was seen as controversial at the time. Then 35, Warsh, whose background is in law rather than economics, was seen as lacking experience and being too politically connected to the Bush White House. However, he emerged as a key player during the financial crisis, as Fed Chairman exploited Warsh's ties to the banking sector as a way to keep open communications between the central bank and key firms. Along with former Fed Vice Chair Donald Kohn and Treasury Secretary Timothy Geithner, Warsh quickly became part of Bernanke's inner circle. "Kevin rendered the Federal Reserve and the nation exemplary service during his time at the Board," Bernanke said in a statement. "In particular, his intimate knowledge of financial markets and institutions proved invaluable during the recent crisis. "I deeply appreciate his insights and wise counsel and, most especially, his fortitude and friendship during the difficult days, nights and weekends of the crisis," Bernanke added.

To: Riskmgmt who wrote (70946)	2/11/2011 4:51:58 AM
From: TobagoJack	Read Replies (3) \| Respond to of 218649

the word 'rapacious' came to mind as i read the following just in in-tray Any thoughts or input? I could see a wave of selling from rich out-of-towners. And how would this affect overseas owners? It seems to play into my theme that real assets that are movable are not easily taxed. But if a real asset cannot be moved, then expect the possibility of much higher taxes, especially for non-residents. M From today's Wall Street Journal: Connecticut and New Jersey residents with a Hamptons summer cottage or a Manhattan pied-a-terre are about to get a nasty surprise: New York state wants more taxes from them. A New York court ruled last month that all income earned by a New Canaan, Conn., couple is subject to New York state taxes because they own a summer home on Long Island they used only a few times a year. They have been hit with an additional tax bill of $1.06 million. Tax experts and real estate brokers say this ruling could boost the tax bill for thousands of business executives who own New York City apartments they use only occasionally. It could also hurt sales in the Hamptons and New York's other vacation-home communities. "People will think twice about spending any summer time in New York," says Robert Willens, a New York-based tax consultant. "The amount of tax they could be subjected to is likely to outweigh the benefit." A spokesman for the state Taxation Department issued a written statement that said it was "pleased" with the decision. "However, these cases are fact-intensive and as such each case stands on its own specific fact pattern," it said. For years, New York law stated that residents of another state who spend more than 183 days a year in New York have to pay taxes on any income they make in this state. But they generally haven't had to pay New York taxes on income they make outside of the state or on their spouses' income if they work elsewhere. Under the recent ruling, this might change for many out-of-state residents who own vacation homes or apartments here. In effect, it reinterprets what counts as a permanent residence. In defining a "permanent place of abode," New York tax code specifically excludes "a mere camp or cottage, which is suitable and used only for vacations." New York tax experts say the new ruling is the first they recall that counts summer homes as permanent residences. "This is going to open up a Pandora's box," says Eric Kramer, a tax attorney in Uniondale, N.Y. "I don't think anyone previously thought vacation homes would count as a permanent residence." Income that now could be taxed by New York includes capital gains, dividends and securities, attorneys said. In the event of an audit, these homeowners would also be responsible for back taxes, plus interest and penalties, as a result of their New York property. Judge Joseph Pinto, a New York administrative law judge, made the novel ruling in a 2009 case that was affirmed last month on appeal by the New York state tax appeals tribunal. Mr. Pinto seized on what is meant by a permanent residence, which is the benchmark for whether all, or just the in-state portion, of an individual's income is subject to New York state tax. Mr. Pinto ruled that the couple's Long Island vacation home qualifies under the law as a permanent abode because it was suitable for living year-round—whether or not the couple actually stayed in the home wasn't relevant. Under the ruling, if an owner doesn't spend a single a day in a home it could still count toward a permanent residence. The Napeague, Long Island, house was purchased by John and Laura Barker for $260,000 in 1997, according to court documents. From 2002 to 2004, the period that was assessed for back taxes, the Barkers said they spent only a few days a year at the home, usually during the summer. The appeals court upheld the ruling that it's not the owners' intended use of the house that matters, but whether the home could be used all year long. The court said that the house is approximately 1,122 square feet with heat, electricity, and internet service "making it very habitable and comfortable year round," according to court documents. The court also said that Mrs. Barker's parents, who sometimes stayed at the home throughout the colder months, were evidence that it was a permanent residence even though the Barkers never used it that way. The Barkers countered that they used the home only a few days a year, adding that the refrigerator was usually empty, court documents showed. They cited clothing not being stored there as evidence that it was a part-time residence. "We think the decision is wrong. We are evaluating our options including a continuation of appeals," Mr. Barker said. "We imagine this decision will have a chilling effect on New Your tourism and real estate values among other second and third order effects." Tax attorneys said they were unlikely to get the ruling overturned.