August economic outlook (with graphs!)

[30ashopper]

Calculated Risk: August Economic Summary in Graphs

A mixture of good and bad news, which I suppose should be considered an improvement.

The current state of things is interesting, we have what looks like a bottom and recovery in areas related to spending - home sales, consumer purchases, vehicle sales - mixed with bad news on the personal finance front - unemployment and bankruptcy filings. Personal savings rates are also still high. Strange mix of data. They'll probably write books about this down the line explaining what's going on right now, but currently all we have to go on are the economist's guesses.

 

[LuciferSam]

Calculated Risk: August Economic Summary in Graphs

A mixture of good and bad news, which I suppose should be considered an improvement.

The current state of things is interesting, we have what looks like a bottom and recovery in areas related to spending - home sales, consumer purchases, vehicle sales - mixed with bad news on the personal finance front - unemployment and bankruptcy filings. Personal savings rates are also still high. Strange mix of data. They'll probably write books about this down the line explaining what's going on right now, but currently all we have to go on are the economist's guesses.

Hail to the Messiah.

 

[lerxst]

Calculated Risk: August Economic Summary in Graphs

A mixture of good and bad news, which I suppose should be considered an improvement.

The current state of things is interesting, we have what looks like a bottom and recovery in areas related to spending - home sales, consumer purchases, vehicle sales - mixed with bad news on the personal finance front - unemployment and bankruptcy filings. Personal savings rates are also still high. Strange mix of data. They'll probably write books about this down the line explaining what's going on right now, but currently all we have to go on are the economist's guesses.

Wow, lots of data there, about as clear as the healthcare bill..
If we had trusted "economists" in places of influence in Washington, we might not be in this mess to begin with.

 

[Bob]

real estate is the anchor below the waterline.

 

[30ashopper]

real estate is the anchor below the waterline.

If by that you mean it is a leading indicator, I would agree.

 

[fisher]

If by that you mean it is a leading indicator, I would agree.

What happens when car sales tank after the huge runup in sales from the clunkers program? What happens when the $8500 credit for new home purchases vanishes?

Speaking of the cash for clunkers program, did any of you get this piece of news?

"According to Automotive News, NHTSA -- the government bureaucracy responsible for administering the CARS program -- conducted a webinar for automobile dealers last Monday. During that session, retailers were reportedly told that the federal rebate cash they'd be receiving would be non-taxable. Now, for the buyers trading in so-called clunkers, this is indeed the case. Unfortunately for car dealers, however, it appears that NHTSA got the explanation wrong. In fact, AN reports that the IRS issued an advisory bulletin yesterday confirming that yes, the federal rebates dealerships receive for CARS trades count as taxable gross income.

Apparently, some retailers believed that since their customers weren't getting taxed, neither were they. And if the Automotive News account of events is accurate, it's fairly obvious that NHTSA didn't fully understand the tax implications either when they conducted their webinar. As a result, some dealer smiles around the country are likely turning into frowns this weekend. The money line in the AN piece comes from Richard Heider, a dealer accountant who points out that the CARS cash simply counts as a normal payment to the retailer, and thus is taxable. "What you are dealing with are people who don't understand accounting," he says. Apparently, on all sides of the equation. "

Plus, the buyers had to pay sales tax on the full price of the cars effectively double taxing the $4500 rebate with federal/state income tax plus sales tax.

 

[30ashopper]

it'll certainly be interesting to see what happens after all the juicing comes to an end.

 

[wrobert]

What happens when car sales tank after the huge runup in sales from the clunkers program? What happens when the $8500 credit for new home purchases vanishes?

Speaking of the cash for clunkers program, did any of you get this piece of news?

"According to Automotive News, NHTSA -- the government bureaucracy responsible for administering the CARS program -- conducted a webinar for automobile dealers last Monday. During that session, retailers were reportedly told that the federal rebate cash they'd be receiving would be non-taxable. Now, for the buyers trading in so-called clunkers, this is indeed the case. Unfortunately for car dealers, however, it appears that NHTSA got the explanation wrong. In fact, AN reports that the IRS issued an advisory bulletin yesterday confirming that yes, the federal rebates dealerships receive for CARS trades count as taxable gross income.

Apparently, some retailers believed that since their customers weren't getting taxed, neither were they. And if the Automotive News account of events is accurate, it's fairly obvious that NHTSA didn't fully understand the tax implications either when they conducted their webinar. As a result, some dealer smiles around the country are likely turning into frowns this weekend. The money line in the AN piece comes from Richard Heider, a dealer accountant who points out that the CARS cash simply counts as a normal payment to the retailer, and thus is taxable. "What you are dealing with are people who don't understand accounting," he says. Apparently, on all sides of the equation. "

Plus, the buyers had to pay sales tax on the full price of the cars effectively double taxing the $4500 rebate with federal/state income tax plus sales tax.

No different than any other rebate. So what is the big deal?

 

[fisher]

No different than any other rebate. So what is the big deal?

No big deal to me. But, apparently, it was a surprise to most of the dealers that sold the cars and most of the buyers that took advantage of the deal. :shock: