Opção binária Jacareí

For forex / crypto, when calculating sharpe ratio, where do we get risk-free rate percentage to use in the formula?

Hi, sharpe ratio formula says it is (average return - riskfree rate return) / standard deviation of return
but where do we get the risk free rate return of crypto and forex in day trading algos?
thank you.
submitted by questionaway221 to algotrading [link] [comments]

For forex / crypto, when calculating sharpe ratio, where do we get risk-free rate percentage to use in the formula?

submitted by LiterallyStonkler to StonkFeed [link] [comments]

What is % of tax rate in day trading stocks/forex in phillipines?

any anwers?
submitted by Youtube_ZxstyGM to phinvest [link] [comments]

Formula for marginal tax rates

I need to build a 1-cell formula for marginal tax rates in Canada (see link) where each tax bracket has a different rate. Specifically I can't figure out how to automate the calculation when the net income falls in the middle of a bracket. Is there a template for this type of problem?
submitted by achan1369 to excel [link] [comments]

Marginal Tax Rate/Slab Pricing Formula as a Named Function?

I've been spinning my wheels on this and am at a loss. I have a pricebook table that lists out our products, discount tiers, and unit pricing. We use slab pricing guidance--so the pricing is based upon the quantity delta within each range.

Product Lower Limit Upper Limit Price
Item 1 3 $5.00
Item 4 6 $4.00
Item 7 10 $3.50
if I purchase 3 units of Item, then it is (3 x $5.00) = $15.00 If I purchase 5 units of Item, then it is (3 x $5.00) + (2 x $4.00) = $23.00
It is similar logic to marginal tax rate calculation, and I was hoping to create a named function to clean up the formulas and make it easier for my end user to do calculations.
submitted by WeOwnIt to sheets [link] [comments]

Which forex rate to use for income tax purposes

I have professional income in USD, so going to use the TT buy rate of the last day of FY as the exchange rate. But there are two such rates published by SBI
  1. One for transactions below 10 lacs
  2. Another for transactions 10-20 lacs, also mentioned to be used as reference rates). See this for example https://sbi.co.in/documents/16012/1400784/FOREX_CARD_RATES.pdf
Which one should I use?
submitted by SkullTech101 to IndiaTax [link] [comments]

Strange Things Volume II: Triffin's Dilemma and The Dollar Milkshake

Strange Things Volume II: Triffin's Dilemma and The Dollar Milkshake
As the Fed begins their journey into a deflationary blizzard, they are beginning to break markets across the globe. As the World Reserve Currency, over 60% of all international trade is done in Dollars, and USDs are the largest Foreign Exchange (Forex) holdings by far for global central banks. Now all foreign currencies are crashing against the Dollar as the vicious feedback loops of Triffin’s Dilemma come home to roost. The Dollar Milkshake has begun.
The Fed, knowingly or unknowingly, has walked into this trap- and now they find themselves caught underneath the Sword of Damocles, with no way out…

Sword Of Damocles
“The famed “sword of Damocles” dates back to an ancient moral parable popularized by the Roman philosopher Cicero in his 45 B.C. book “Tusculan Disputations.” Cicero’s version of the tale centers on Dionysius II, a tyrannical king who once ruled over the Sicilian city of Syracuse during the fourth and fifth centuries B.C.
Though rich and powerful, Dionysius was supremely unhappy. His iron-fisted rule had made him many enemies, and he was tormented by fears of assassination—so much so that he slept in a bedchamber surrounded by a moat and only trusted his daughters to shave his beard with a razor.
As Cicero tells it, the king’s dissatisfaction came to a head one day after a court flatterer named Damocles showered him with compliments and remarked how blissful his life must be. “Since this life delights you,” an annoyed Dionysius replied, “do you wish to taste it yourself and make a trial of my good fortune?” When Damocles agreed, Dionysius seated him on a golden couch and ordered a host of servants wait on him. He was treated to succulent cuts of meat and lavished with scented perfumes and ointments.
Damocles couldn’t believe his luck, but just as he was starting to enjoy the life of a king, he noticed that Dionysius had also hung a razor-sharp sword from the ceiling. It was positioned over Damocles’ head, suspended only by a single strand of horsehair.
From then on, the courtier’s fear for his life made it impossible for him to savor the opulence of the feast or enjoy the servants. After casting several nervous glances at the blade dangling above him, he asked to be excused, saying he no longer wished to be so fortunate.”
Damocles’ story is a cautionary tale of being careful of what you wish for- Those who strive for power often unknowingly create the very systems that lead to their own eventual downfall. The Sword is often used as a metaphor for a looming danger; a hidden trap that can obliterate those unaware of the great risk that hegemony brings.
Heavy lies the head which wears the crown.

There are several Swords of Damocles hanging over the world today, but the one least understood and least believed until now is Triffin’s Dilemma, which lays the bedrock for the Dollar Milkshake Theory. I’ve already written extensively about Triffin’s Dilemma around a year ago in Part 1.5 and Part 4.3 of my Dollar Endgame Series, but let’s recap again.
Here’s a great summary- read both sides of the dilemma:

Triffin's Dilemma Summarized

(Seriously, stop here and go back and read Part 1.5 and Part 4.3 Do it!)

Essentially, Triffin noted that there was a fundamental flaw in the system: by virtue of the fact that the United States is a World Reserve Currency holder, the global financial system has built in GLOBAL demand for Dollars. No other fiat currency has this.
How is this demand remedied? With supply of course! The United States thus is forced to run current account deficits - meaning it must send more dollars out into the world than it receives on a net basis. This has several implications, which again, I already outlined- but I will list in summary format below:
  1. The United States has to be a net importer, ie it must run trade deficits, in order to supply the world with dollars. Remember, dollars and goods are opposite sides of the same equation, so a greater trade deficits means that more dollars are flowing out to the world.
  2. (This will devastate US domestic manufacturing, causing political/social/economic issues at home.)
  3. These dollars flow outwards into the global economy, and are picked up by institutions in a variety of ways.
  4. First, foreign central banks will have to hold dollars as Foreign Exchange Reserves to defend their currency in case of attack on the Forex markets. This was demonstrated during the Asian Financial Crisis of 1997-98, when the Thai Baht, Malaysian Ringgit, and Philippine Peso (among other East Asian currencies) plunged against the Dollar. Their central banks attempted to defend the pegs but they failed.
  5. Second, companies will need Dollars for trade- as the USD makes up over 60% of global trade volume, and has the deepest and most liquid forex market by far, even small firms that need to transact cross border trade will have to acquire USDs in order to operate. When South Africa and Chile trade, they don’t want to use Mexican Pesos or Korean Won- they want Dollars.
  6. Foreign governments need dollars. There are several countries already who have adopted the Dollar as a replacement for their own currency- Ecuador and Zimbabwe being prime examples. There’s a full list here.
  7. Third world governments that don’t fully adopt dollars as their own currencies will still use them to borrow. Argentina has 70% of it’s debt denominated in dollars and Indonesia has 30%, for example. Dollar-denominated debt will build up overseas.
The example I gave in Part 1.5 was that of Liberia, a small West African Nation looking to enter global trade. Needing to hold dollars as part of their exchange reserves, the Liberian Central Bank begins buying USDs on the open market. The process works in a similar fashion for large Liberian export companies.

Dollar Recycling

Essentially, they print their own currency to buy Dollars. Wanting to earn interest on this massive cash hoard when it isn’t being used, they buy Treasuries and other US debt securities to get a yield.
As their domestic economy grows, their need and dependence on the Dollar grows as well. Their Central Bank builds up larger and larger hoards of Treasuries and Dollars. The entire thesis is that during times of crisis, they can sell the Treasuries for USD, and use the USDs to buy back their own currency on the market- supporting its value and therefore defending the peg.
This buying pressure on USDs and Treasuries confers a massive benefit to the United States-

The Exorbitant Privilege

This buildup of excess dollars ends up circulating overseas in banks, trade brokers, central banks, governments and companies. These overseas dollars are called the Eurodollar system- a 2016 research paper estimated the size to be around $13.8 Trillion USD. This system is not under official Federal Reserve jurisdiction so it is difficult to get accurate numbers on its size.


This means the Dollar is always artificially stronger than it should be- and during financial calamity, the dollar is a safe haven as there are guaranteed bidders.
All this dollar denominated debt paired with the global need for dollars in trade creates strong and persistent dollar demand. Demand that MUST be satisfied.
This creates systemic risk on a worldwide scale- an unforeseen Sword of Damocles that hangs above the global financial system. I’ve been trying to foreshadow this in my Dollar Endgame Series.
Triffin’s Dilemma is the basis for the Dollar Milkshake Theory posited by Brent Johnson.

The Dollar Milkshake

Milkshake of Liquidity
In 2021, Brent worked with RealVision to create a short summary of his thesis- the video can be found here. I should note that Brent has had this theory for years, dating back to 2018, when he first came on podcasts and interviews and laid out his theory (like this video, for example).
Here’s the summary below:
“A giant milkshake of liquidity has been created by global central banks with the dollar as its key ingredient - but if the dollar moves higher this milkshake will be sucked into the US creating a vicious spiral that could quickly destabilize financial markets.
The US dollar is the bedrock of the world's financial system. It greases the wheels of global commerce and exchange- the availability of dollars, cost of dollars, and the level of the dollar itself each can have an outsized impact on economies and investment opportunities.
But more important than the absolute level or availability of dollars is the rate of change in the level of the dollar. If the level of the dollar moves too quickly and particularly if the level rises too fast then problems start popping up all over the place (foreign countries begin defaulting).
Today however many people are convinced that both the role of the Dollar is diminishing and the level of the dollar will only decline. People think that the US is printing so many dollars that the world will be awash with the greenback causing the value of the dollar to fall.
Now it's true that the US is printing a lot of dollars – but other countries are also printing their own currencies in similar amounts so in theory it should even out in terms of value.
But the hidden issue is the difference in demand. Remember the global financial system is built on the US dollar which means even if they don't want them everybody still needs them and if you need something you don't really have much choice. (See DXY Index):

DXY Index

Although many countries like China are trying to reduce their reliance on dollar transactions this will be a very slow transition. In the meantime the risks of a currency or sovereign debt crisis continue to rise.
But now countries like China and Japan need dollars to buy copper from Australia so the Chinese and the Japanese owe dollars and Australia is getting paid in dollars.
Europe and Asia currently doing very limited amount of non-dollar transactions for oil so they still need dollars to buy oil from saudi and again dollars get hoovered up on both sides
Asia and Europe need dollars to buy soybeans from Brazil. This pulls in yet more dollars - everybody needs dollars for trade invoices, central bank currency reserves and servicing massive cross-border dollar denominated debts of governments and corporations outside the USA.
And the dollar-denominated debt is key- if they don't service their debts or walk away from their dollar debts their funding costs rise putting great financial pressure on their domestic economies. Not only that, it can lead to a credit contraction and a rapid tightening of dollar supply.
The US is happy with the reliance on the greenback they own the settlement system which benefits the US banks who process all the dollars and act as gatekeepers to the Dollar system they police and control the access to the system which benefits the US military machine where defense spending is in excess of any other country so naturally the US benefits from the massive volumes of dollar usage.


Other countries have naturally been grumbling about being held hostage to the situation but the choices are limited. What it does mean is that dollars need to be constantly sucked out of the USA because other countries all over the world need them to do business and of course the more people there are who need and want those dollars the more is the pressure on the price of dollars to go up.
In fact, global demand is so high that the supply of dollars is just not enough to keep up, even with the US continually printing money. This is why we haven't seen consistently rising US inflation despite so many QE and stimulus programs since the global financial crisis in 2008.
But, the real risk comes when other economies start to slow down or when the US starts to grow relative to the other economies. If there is relatively less economic activity elsewhere in the world then there are fewer dollars in global circulation for others to use in their daily business and of course if there are fewer in circulation then the price goes up as people chase that dwindling source of dollars.
Which is terrible for countries that are slowing down because just when they are suffering economically they still need to pay for many goods in dollars and they still need to service their debts which of course are often in dollars too.

So the vortex begins or as we like to say the dollar milkshake- As the level of the dollar rises the rest of the world needs to print more and more of its own currency to then convert to dollars to pay for goods and to service its dollar debt this means the dollar just keeps on rising in response many countries will be forced to devalue their own currencies so of course the dollar rises again and this puts a huge strain on the global system.
(see the charts below:)



To make matters worse in this environment the US looks like an attractive safe haven so the US ends up sucking in the capital from the rest of the world-the dollar rises again. Pretty soon you have a full-scale sovereign bond and currency crisis.


We're now into that final napalm run that sees the dollar and dollar assets accelerate even higher and this completely undermines global markets. Central banks try to prevent disorderly moves, but the global markets are bigger and the momentum unstoppable once it takes hold.
And that is the risk that very few people see coming but that everyone should have a hedge against - when the US sucks up the dollar milkshake, bad things are going to happen.
Worst of all there's no alternatives- what are you going to use-- Chinese Yuan? Japanese Yen? the Euro??
Now, like it or not we're stuck with a dollar underpinning the global financial system.”
Why is it playing out now, in real time?? It all leads back to a tweet I made in a thread on September 16th.

Tweet Thread about the Yuan

The Fed, rushing to avoid a financial crisis in March 2020, printed trillions. This spurred inflation, which they then swore to fight. Thus they began hiking interest rates on March 16th, and began Quantitative Tightening this summer.
QE had stopped- No new dollars were flowing out into a system which has a constant demand for them. Worse yet, they were hiking completely blind-
Although the Fed is very far behind the curve, (meaning they are hiking far too late to really combat inflation)- other countries are even farther behind!
Japan has rates currently at 0.00- 0.25%, and the Eurozone is at 1.25%. These central banks have barely begun hiking, and some even swear to keep them at the zero-bound. By hiking domestic interest rates above foreign ones, the Fed is incentivizing what are called carry trades.
Since there is a spread between the Yen and the Dollar in terms of interest rates, it thus is profitable for traders to borrow in Yen (shorting it essentially) and buy Dollars, which can earn 2.25% interest. The spread would be around 2%.
DXY rises, and the Yen falls, in a vicious feedback loop.
Thus capital flows out of Japan, and into the US. The US sucks up the Dollar Milkshake, draining global liquidity. As I’ve stated before, this has seriously dangerous implications for the global financial system.
For those of you who don’t believe this could be foreseen, check out the ending paragraphs of Dollar Endgame Part 4.3 - “Economic Warfare and the End of Bretton Woods” published February 16, 2022:

Triffin's Dilemma is the Final Nail

What I’ve been attempting to do in my work is restate Triffins’ Dilemma, and by extension the Dollar Milkshake, in other terms- to come at the issue from different angles.
Currently the Fed is not printing money. Which is thus causing havoc in global trade (seen in the currency markets) because not enough dollars are flowing out to satisfy demand.
The Fed must therefore restart QE unless it wants to spur a collapse on a global scale. Remember, all these foreign countries NEED to buy, borrow and trade in a currency that THEY CANNOT PRINT!
We do not have enough time here to go in depth on the Yen, Yuan, Pound or the Euro- all these currencies have different macro factors and trade factors which affect their currencies to a large degree. But the largest factor by FAR is Triffin’s Dilemma + the Dollar Milkshake, and their desperate need for dollars. That is why basically every fiat currency is collapsing versus the Dollar.
The Fed, knowingly or not, is basically in charge of the global financial system. They may shout, “We raise rates in the US to fight inflation, global consequences be damned!!” - But that’s a hell of a lot more difficult to follow when large G7 countries are in the early stages of a full blown currency crisis.
The most serious implication is that the Fed is responsible for supplying dollars to everyone. When they raise rates, they trigger a margin call on the entire world. They need to bail them out by supplying them with fresh dollars to stabilize their currencies.
In other words, the Fed has to run the loosest and most accommodative monetary policy worldwide- they must keep rates as low as possible, and print as much as possible, in order to keep the global financial system running. If they don’t do that, sovereigns begin to blow up, like Japan did last week and like England did on Wednesday.
And if the world’s financial system implodes, they must bail out not only the United States, but virtually every global central bank. This is the Sword of Damocles. The money needed for this would be well in the dozens of trillions.
The Dollar Endgame Approaches…


(Many of you have been messaging me with questions, rebuttals or comments. I’ll do my best to answer some of the more poignant ones here.)

Q: I’ve been reading your work, you keep saying the dollar is going to fall in value, and be inflated away. Now you’re switching sides and joining the dollar bull faction. Seems like you don’t know what you’re talking about!
A: You’re mixing up my statements. When I discuss the dollar losing value, I am referring to it falling in ABSOLUTE value, against goods and services produced in the real economy. This is what is called inflation. I made this call in 2021, and so far, it has proven right as inflation has accelerated.
The dollar gaining strength ONLY applies to foreign currency exchange markets (Forex)- remember, DXY, JPYUSD, and other currency pairs are RELATIVE indicators of value. Therefore, both JPY and USD can be falling in real terms (inflation) but if one is falling faster, then that one will lose value relative to the other. Also, Forex markets are correlated with, but not an exact match, for inflation.
I attempted to foreshadow the entire dollar bull thesis in the conclusion of Part 1 of the Dollar Endgame, posted well over a year ago-

Unraveling of the Currency Markets

I did not give an estimate on when this would happen, or how long DXY would be whipsawed upwards, because I truly do not know.
I do know that eventually the Fed will likely open up swap lines, flooding the Eurodollar market with fresh greenbacks and easing the dollar short squeeze. Then selling pressure will resume on the dollar. They would only likely do this when things get truly calamitous- and we are on our way towards getting there.
The US bond market is currently in dire straits, which matches the prediction of spiking interest rates. The 2yr Treasury is at 4.1%, it was at 3.9% just a few days ago. Only a matter of time until the selloff gets worse.
Q: Foreign Central banks can find a way out. They can just use their reserves to buy back their own currency.
Sure, they can try that. It’ll work for a while- but what happens once they run out of reserves, which basically always happens? I can’t think of a time in financial history that a country has been able to defend a currency peg against a sustained attack.

Global Forex Reserves

They’ll run out of bullets, like they always do, and basically the only option left will be to hike interest rates, to attract capital to flow back into their country. But how will they do that with global debt to GDP at 356%? If all these countries do that, they will cause a global depression on a scale never seen before.
Britain, for example, has a bit over $100B of reserves. That provides maybe a few months of cover in the Forex markets until they’re done.
Furthermore, you are ignoring another vicious feedback loop. When the foreign banks sell US Treasuries, this drives up yields in the US, which makes even more capital flow to the US! This weakens their currency even further.

FX Feedback Loop

To add insult to injury, this increases US Treasury borrowing costs, which means even if the Fed completely ignores the global economy imploding, the US will pay much more in interest. We will reach insolvency even faster than anyone believes.
The 2yr Treasury bond is above 4%- with $31T of debt, that means when we refinance we will pay $1.24 Trillion in interest alone. Who's going to buy that debt? The only entity with a balance sheet large enough to absorb that is the Fed. Restarting QE in 3...2…1…
Q: I live in England. With the Pound collapsing, what can I do? What will happen from here? How will the governments respond?
England, and Europe in general, is in serious trouble. You guys are currently facing a severe energy crisis stemming from Russia cutting off Nord Stream 1 in early September and now with Nord Stream 2 offline due to a mysterious leak, energy supplies will be even more tight.
Not to mention, you have a pretty high debt to GDP at 95%. Britain is a net importer, and is still running government deficits of £15.8 billion (recorded in Q1 2022). Basically, you guys are the United States without your own large scale energy and defense sector, and without Empire status and a World Reserve Currency that you once had.
The Pound will almost certainly continue falling against the Dollar. The Bank of England panicked on Wednesday in reaction to a $100M margin call on British pension funds, and now has begun buying long dated (10yr) gilts, or government bonds.
They’re doing this as inflation is spiking there even worse than the US, and the nation faces a currency crisis as the Pound is nearing parity with the Dollar.

BOE announces bond-buying scheme (9/28/22)

I will not sugarcoat it, things will get rough. You need to hold cash, make sure your job, business, or investments are secure (ie you have cashflow) and hunker down. Eliminate any unnecessary purchases. If you can, buy USDs as they will likely continue to rise and will hold value better than your own currency.
If Parliament goes through with more tax cuts, that will only make the fiscal situation worse and result in more borrowing, and thus more money printing in the end.
Q: What does this mean for Gamestop? For the domestic US economy?
Gamestop will continue to operate as I am sure they have been- investing in growth and expanding their Web3 platform.
Fiat is fundamentally broken. This much is clear- we need a new financial system not based on flawed 16th fractional banking principles or “trust me bro” financial intermediaries.
My hope is that they are at the forefront of a new financial system which does not require centralized authorities or custodians- one where you truly own your assets, and debasement is impossible.
I haven’t really written about GME extensively because it’s been covered so well by others, and I don’t feel I have that much to add.
As for the US economy, we are still in a deep recession, no matter what the politicians say- and it will get worse. But our economic troubles, at least in the short term (6 months) will not be as severe as the rest of the world due to the aforementioned Dollar Milkshake.
The debt crisis is still looming, midterms are approaching, and the government continues to deficit spend as if there’s no tomorrow.
As the global monetary system unravels, yields will spike, the deleveraging will get worse, and our dollar will get stronger. The fundamental factors continue to deteriorate.
I’ve covered the US enough so I'll leave it there.
Q: Did you know about the Dollar Milkshake Theory before recently? What did you think of it?
Of course I knew about it, I’ve been following Brent Johnson since he appeared on RealVision and Macrovoices. He laid out the entire theory in 2018 in a long form interview here. I listened to it maybe a couple times, and at the time I thought he was right- I just didn’t know how right he was.
Brent and I have followed each other and been chatting a little on Twitter- his handle is SantiagoAuFund, I highly recommend you give him a follow.

Twitter Chat

I’ve never met him in person, but from what I can see, his predictions are more accurate than almost anyone else in finance. Again, all credit to him- he truly understands the global monetary system on a fundamental level.
I believed him when he said the dollar would rally- but the speed and strength of the rally has surprised me. I’ve heard him predict DXY could go to 150, mirroring the massive DXY squeeze post the 1970s stagflation. He could very easily be right- and the absolute chaos this would mean for global trade and finance are unfathomable.

History of DXY

Q: The Pound and Euro are falling just because of the energy crisis there. That's it!
Why is the Yen falling then? How about the Yuan? Those countries are not currently undergoing an energy crisis. Let’s review the year to date performance of most fiat currencies vs the dollar:
Japanese Yen: -20.31%
Chinese Yuan: -10.79%
South African Rand: -10.95%
English Pound: -18.18%
Euro: -14.01%
Swiss Franc: -6.89%
South Korean Won: -16.73%
Indian Rupee: -8.60%
Turkish Lira: -27.95%
There are only a handful of currencies positive against the dollar, the most notable being the Russian Ruble and the Brazilian Real- two countries which have massive commodity resources and are strong exporters. In an inflationary environment, hard assets do best, so this is no surprise.
Q: What can the average person do to prepare? What are you doing?
Obligatory this is NOT financial advice
This is an extremely difficult question, as there are so many factors. You need to ask yourself, what is your financial situation like? How much disposable income do you have? What things could you cut back on? I can’t give you specific ideas without knowing your situation.
Personally, I am building up savings and cutting down on expenses. I’m getting ready for a severe recession/depression in the US and trying to find ways to increase my income, maybe a side hustle or switching jobs.
I am holding my GME and not selling- I still have some shares in Fidelity that I need to DRS (I know, sorry, I was procrastinating).
For the next few months, I believe there will be accelerating deflation as interest rates spike and the debt cycle begins to unwind. But like I’ve stated before, this will lead us towards a second Great Depression very rapidly, and to avoid the deflationary blizzard the Fed will restart QE on a scale never seen before.
QE Infinity. This will be the impetus for even worse inflation- 25%+ by this time next year.
It’s hard to prepare for this, and easy to feel hopeless. It’s important to know that we have been through monetary crises before, and society did not devolve into a zombie apocalypse. You are not alone, and we will get through this together.
It’s also important to note that we are holding the most lopsided investment opportunity of a generation. Any money you put in there can be grown by orders of magnitude.
We are at the end of the Central Bankers game- and although it will be painful, we will rid the world of them, I believe, and build a new financial system based on blockchains which will disintermediate the institutions. They have everything to lose.
Q: I want to learn more, where can I do? What can I do to keep up to date with everything?
You can start by reading books, listening to podcasts, and checking the news to stay abreast of developments. I have a book list linked at the end of the Dollar Endgame posts.
I’ll be covering the central bank clown show on Twitter, you can follow me there if you like. I’ll also include links to some of my favorite macro people below:
I’m still finishing up the finale for Dollar Endgame- I should have it out soon. I’m also writing an addendum to the series which is purely Q&A to answer questions and concerns. Sorry for the wait.
Nothing on this Post constitutes investment advice, performance data or any recommendation that any security, portfolio of securities, investment product, transaction or investment strategy is suitable for any specific person.
submitted by peruvian_bull to Superstonk [link] [comments]

A US senator is investigating Abbott Laboratories’ low tax rates and alleging the company’s investments in stock buybacks may have driven the nationwide baby formula shortage

A US senator is investigating Abbott Laboratories’ low tax rates and alleging the company’s investments in stock buybacks may have driven the nationwide baby formula shortage submitted by Pipboy3500 to VoteDEM [link] [comments]

[CA] - Proposed municipal tax rate to exceed inflation rate as city delivers its latest taxation formula | Toronto Star

[CA] - Proposed municipal tax rate to exceed inflation rate as city delivers its latest taxation formula | Toronto Star submitted by AutoNewspaperAdmin to AutoNewspaper [link] [comments]

[CA] - Proposed municipal tax rate to exceed inflation rate as city delivers its latest taxation formula

[CA] - Proposed municipal tax rate to exceed inflation rate as city delivers its latest taxation formula submitted by AutoNewsAdmin to TORONTOSTARauto [link] [comments]

Question on tax rate formula

This question is not strictly about retirement but I have a spreadsheet that helps plan my drawdown of funds over time in retirement. An important factor in that is current vs future taxes. To compute what my tax bill is I added this VBA formula and then plotted out the tax bill (y axis) vs taxable income (x axis). I would like to know if this formula is correct. I posted a picture of the plot. The reason I ask is I guess I would have expected a sharper curve due to the progressive tax rates. You can see the curve is not linear as expected but I would have thought it would be more pronounced
I don't know how many people that read this are familiar or interested enough in Excel VBA code but if you are and can critique the code I would appreciate the review
Here is the formula I have for married filing jointly. I have also added support for it to reflect the expiration of current tax rates in 2025
Function ComputeTax2(Income As Double, year) As Double 'Debug.Print "use year to determine rates, rates to rise in 2025" If year > 2025 Then ComputeTax2 = WorksheetFunction.Min(Income, 19750) * 0.1 If Income > 19750 Then ComputeTax2 = ComputeTax2 + (0.15 * (WorksheetFunction.Min(Income - 19750, 80250 - 19750))) End If If Income > 80250 Then ComputeTax2 = ComputeTax2 + (0.25 * (WorksheetFunction.Min(Income - 80250, 171050 - 80250))) End If If Income > 171050 Then ComputeTax2 = ComputeTax2 + (0.28 * (WorksheetFunction.Min(Income - 171050, 326601 - 171050))) End If If Income > 326601 Then ComputeTax2 = ComputeTax2 + (0.32 * (WorksheetFunction.Min(Income - 326601, 414700 - 326601))) End If If Income > 414700 Then ComputeTax2 = ComputeTax2 + (0.35 * (WorksheetFunction.Min(Income - 414700, 622050 - 414700))) End If If Income > 622050 Then ComputeTax2 = ComputeTax2 + (0.37 * (Income - 622050)) End If Else ComputeTax2 = WorksheetFunction.Min(Income, 19750) * 0.1 If Income > 19750 Then ComputeTax2 = ComputeTax2 + (0.12 * (WorksheetFunction.Min(Income - 19750, 80250 - 19750))) End If If Income > 80250 Then ComputeTax2 = ComputeTax2 + (0.22 * (WorksheetFunction.Min(Income - 80250, 171050 - 80250))) End If If Income > 171050 Then ComputeTax2 = ComputeTax2 + (0.24 * (WorksheetFunction.Min(Income - 171050, 326601 - 171050))) End If If Income > 326601 Then ComputeTax2 = ComputeTax2 + (0.32 * (WorksheetFunction.Min(Income - 326601, 414700 - 326601))) End If If Income > 414700 Then ComputeTax2 = ComputeTax2 + (0.35 * (WorksheetFunction.Min(Income - 414700, 622050 - 414700))) End If If Income > 622050 Then ComputeTax2 = ComputeTax2 + (0.37 * (Income - 622050)) End If End If End Function 
submitted by dotnetman to retirement [link] [comments]

Looking for a formula inbuilt or home grown to calculate how much of an Asset to sell to cover the tax on the sale of the asset when each sale is taxable at the same rate.

y is the value of the assets sold so far this FY ($273342.00 for example, it will be dynamic) and x is the tax rate applied (23.5% for example).
Is there a simple formula/function I can use to calculate ( y.x1 )+( y.x2 )+( y.x3 )...
or until +( y.xz ) <1 if it is easier.
Excel Pro Plus 2016
Any help appreciated.
submitted by cl3ft to excel [link] [comments]

If/then formula for multiple tax rates?

I’m not sure I can explain this right, but I’ll try haha, but it may be an unnecessarily long post so please bear with me.
I’m looking for a formula that will calculate a tax rate based off a value being above or below a certain number.
Someone gave me a spreadsheet that helps us calculate our checks before we get them (I work at a refinery. I can’t even start to explain the multitude of separate hourly rates we get paid for different situations) but it uses a set tax rate. However, every check I get has a fluctuating tax rate. For example my last check had a 13.7% federal tax withholding, while the check before that was 9% because there wasn’t any overtime.
So my basic question is this… can I make a formula for a cell that will give me a number calculated at one tax rate IF the taxable income is, let’s say under $3,000 and at another tax rate if it’s above $3,000? Or will I have to make reference cells with those rates plugged into them?
I hope I am asking this right. For additional info, I have one cell that is my taxable income. I have another cell that is my federal withholding. I want the data in the federal withholding to automatically calculate the correct tax percentage based on whether the taxable income is over or under a target amount.
submitted by courtney_love_did_it to excel [link] [comments]

Hyperinflation is Coming- The Dollar Endgame: PART 5.0- "Enter the Dragon" (FIRST HALF OF FINALE)

Hyperinflation is Coming- The Dollar Endgame: PART 5.0-
I am getting increasingly worried about the amount of warning signals that are flashing red for hyperinflation- I believe the process has already begun, as I will lay out in this paper. The first stages of hyperinflation begin slowly, and as this is an exponential process, most people will not grasp the true extent of it until it is too late. I know I’m going to gloss over a lot of stuff going over this, sorry about this but I need to fit it all into four posts without giving everyone a 400 page treatise on macro-economics to read. Counter-DDs and opinions welcome. This is going to be a lot longer than a normal DD, but I promise the pay-off is worth it, knowing the history is key to understanding where we are today.
SERIES (Parts 1-4) TL/DR: We are at the end of a MASSIVE debt supercycle. This 80-100 year pattern always ends in one of two scenarios- default/restructuring (deflation a la Great Depression) or inflation (hyperinflation in severe cases (a la Weimar Republic). The United States has been abusing it’s privilege as the World Reserve Currency holder to enforce its political and economic hegemony onto the Third World, specifically by creating massive artificial demand for treasuries/US Dollars, allowing the US to borrow extraordinary amounts of money at extremely low rates for decades, creating a Sword of Damocles that hangs over the global financial system.
The massive debt loads have been transferred worldwide, and sovereigns are starting to call our bluff. Governments papered over the 2008 financial crisis with debt, but never fixed the underlying issues, ensuring that the crisis would return, but with greater ferocity next time. Systemic risk (from derivatives) within the US financial system has built up to the point that collapse is all but inevitable, and the Federal Reserve has demonstrated it will do whatever it takes to defend legacy finance (banks, brokedealers, etc) and government solvency, even at the expense of everything else (The US Dollar).
I’ll break this down into four parts. ALL of this is interconnected, so please read these in order:

Updated Complete Table of Contents:

“Enter the Dragon”

The Inflation Dragon

PART 5.0 “The Monster & the Simulacrum”

“In the 1985 work “Simulacra and Simulation” French philosopher Jean Baudrillard recalls the Borges fable about the cartographers of a great Empire who drew a map of its territories so detailed it was as vast as the Empire itself.
According to Baudrillard as the actual Empire collapses the inhabitants begin to live their lives within the abstraction believing the map to be real (his work inspired the classic film "The Matrix" and the book is prominently displayed in one scene).
The map is accepted as truth and people ignorantly live within a mechanism of their own design and the reality of the Empire is forgotten. This fable is a fitting allegory for our modern financial markets.
Our fiscal well being is now prisoner to financial and monetary engineering of our own design. Central banking strategy does not hide this fact with the goal of creating the optional illusion of economic prosperity through artificially higher asset prices to stimulate the real economy.
While it may be natural to conclude that the real economy is slave to the shadow banking system this is not a correct interpretation of the Baudrillard philosophy-
The higher concept is that our economy IS the shadow banking system… the Empire is gone and we are living ignorantly within the abstraction. The Fed must support the shadow banking oligarchy because without it, the abstraction would fail.” (Artemis Capital)

The Inflation Serpent

To most citizens living in the West, the concept of a collapsing fiat currency seems alien, unfathomable even. They regard it as an unfortunate event reserved only for those wretched souls unlucky enough to reside in third world countries or under brutal dictatorships.
Monetary mismanagement was seen to be a symptom only of the most corrupt countries like Venezuela- those where the elites gained control of the Treasury and printing press and used this lever to steal unimaginable wealth while impoverishing their constituents.
However, the annals of history spin a different tale- in fact, an eventual collapse of fiat currency is the norm, not the exception.
In a study of 775 fiat currencies created over the last 500 years, researchers found that approximately 599 have failed, leaving only 176 remaining in circulation. Approximately 20% of the 775 fiat currencies examined failed due to hyperinflation, 21% were destroyed in war, and 24% percent were reformed through centralized monetary policy. The remainder were either phased out, converted into another currency, or are still around today.
The average lifespan for a pure fiat currency is only 27 years- significantly shorter than a human life.
Double-digit inflation, once deemed an “impossible” event for the United States, is now within a stone’s throw. Powell, desperate to maintain credibility, has embarked on the most aggressive hiking schedule the Fed has ever undertaken. The cracks are starting to widen in the system.
One has to look no further than a simple graph of the M2 Money Supply, a measure that most economists agree best estimates the total money supply of the United States, to see a worrying trend:

M2 Money Supply
The trend is exponential. Through recessions, wars, presidential elections, cultural shifts, and even the Internet age- M2 keeps increasing non-linearly, with a positive second derivative- money supply growth is accelerating.
This hyperbolic growth is indicative of a key underlying feature of the fiat money system: virtually all money is credit. Under a fractional reserve banking system, most money that circulates is loaned into existence, and doesn't exist as real cash- in fact, around 97% of all “money” counted within the banking system is debt, in one form or another. (See Dollar Endgame Part 3)
Debt virtually always has a yield- that yield is called interest, and that interest demands payment. Thus, any fiat money banking system MUST grow money supply at a compounding interest rate, forever, in order to remain stable.
Debt defaulting is thus quite literally the destruction of money- which is why the deflation is widespread, and also why M2 Money Supply shrank by 30% during the Great Depression.

Interest in Fractional Reserve Fiat Systems
This process repeats ad infinitum, perpetually compounding loan creation and thus money supply, in order to prevent systemic defaults. The system is BUILT for constant inflation.
In the last 50 years, only about 12 quarters have seen reductions in commercial bank credit. That’s less than 5% of the time. The other 95% has seen increases, per data from the St. Louis Fed.

Commercial Bank Credit
Even without accounting for debt crises, wars, and government defaults, money supply must therefore grow exponentially forever- solely in order to keep the wheels on the bus.
The question is where that money supply goes- and herein lies the key to hyperinflation.

In the aftermath of 2008, the Fed and Treasury worked together to purchase billions of dollars of troubled assets, mortgage backed securities, and Treasury bonds- all in a bid to halt the vicious deleveraging cycle that had frozen credit markets and already sunk two large investment banks.
These programs were the most widespread and ambitious ever- and resulted in trillions of dollars of new money flowing into the financial system. Libertarian candidates and gold bugs such as Peter Schiff, who had rightly forecasted the Great Financial Crisis, now began to call for hyperinflation.
The trillions of printed money, he claimed, would create massive inflation that the government would not be able to tame. U.S. debt would be downgraded and sold, and with the Fed coming to the rescue with trillions more of QE, extreme money supply increases would ensue. An exponential growth curve in inflation was right around the corner.
Gold prices rallied hard, moving from $855 at the start of 2008 to a record high of $1,970 by the end of 2011. The end of the world was upon us, many decried. Occupy Wall Street came out in force.
However, to his great surprise, nothing happened. Inflation remained incredibly tame, and gold retreated from its euphoric highs. Armageddon was averted, or so it seemed.
The issue that was not understood well at the time was that there existed two economies- the financial and the real. The Fed had pumped trillions into the financial economy, and with a global macroeconomic downturn plus foreign central banks buying Treasuries via dollar recycling, all this new money wasn’t entering the real economy.

Financial vs Real Economy
Instead, it was trapped, circulating in the hands of money market funds, equities traders, bond investors and hedge funds. The S&P 500, which had hit a record low in March of 2009, began a steady rally that would prove to be the strongest and most pronounced bull market in history.
The Fed in the end did achieve extreme inflation- but only in assets.
Without the Treasury incurring significant fiscal deficits this money did not flow out into the markets for goods and services but instead almost exclusively into equity and bond markets.

QE Stimulus of financial assets
The great inflationary catastrophe touted by the libertarians and the gold bugs alike never came to pass- their doomsday predictions appeared frenetic, neurotic.
Instead of re-evaluating their arguments under this new framework, the neo-Keynesians, who held the key positions of power with Treasury, the Federal Reserve, and most American Universities (including my own) dismissed their ideas as economic drivel.
The Fed had succeeded in averting disaster- or so they claimed. Bernanke, in all his infinite wisdom, had unleashed the “Wealth Effect”- a crucial behavioral economic theory suggesting that people spend more as the value of their assets rise.
An even more extreme school of thought emerged- the Modern Monetary Theorists%20is,Federal%20Reserve%20Bank%20of%20Richmond.)- who claimed that Central Banks had essentially discovered a ‘perpetual motion machine’- a tool for unlimited economic growth as a result of zero bound interest rates and infinite QE.
The government could borrow money indefinitely, and traditional metrics like Debt/GDP no longer mattered. Since each respective government could print money in their own currency- they could never default.
The bill would never be paid.
Or so they thought.

The American Reckoning

This theory helped justify massive US government borrowing and spending- from Afghanistan, to the War on Drugs, to Entitlement Programs, the Treasury indulged in fiscal largesse never before seen in our nation’s history.

America's Finances
The debt continued to accumulate and compound. With rates pegged at the zero bound, the Treasury could justify rolling the debt continually as the interest costs were minimal.
Politicians now pushed for more and more deficit spending- if it's free to bailout the banks, or start a war- why not build more bridges? What about social programs? New Army bases? Tax cuts for corporations? Subsidies for businesses?
There was no longer any “accepted” economic argument against this- and thus government spending grew and grew, and the deficits continued to expand year after year.
The Treasury would roll the debt by issuing new bonds to pay off maturing ones- a strategy reminiscent of Ponzi schemes.
This debt binge is accelerating- as spending increases, (and tax revenues are constant) the deficit grows, and this deficit is paid by more borrowing. This incurs more interest, and thus more spending to pay that interest, in a deadly feedback loop- what is called a debt spiral.

Gross Govt Interest Payments
The shadow threat here that is rarely discussed is Unfunded Liabilities- these are payments the Federal government has promised to make, but has not yet set aside the money for. This includes Social Security, Medicaid, Medicare, Veteran’s benefits, and other funding that is non-discretionary, or in other words, basically non-optional.
Cato Institute estimates that these obligations sum up to $163 Trillion. Other estimates from the Mercatus Center put the figure at between $87T as the lower bound and $222T on the high end.
YES. That is TRILLION with a T.
A Dragon lurks in these shadows.

Unfunded Liabilities
What makes it worse is that these figures are from 2012- the problem is significantly worse now. The fact of the matter is, no one knows the exact figure- just that it is so large it defies comprehension.
These payments are what is called non-discretionary, or mandatory spending- each Federal agency is obligated to spend the money. They don’t have a choice.
Approximately 70% of all Federal Spending is mandatory.
And the amount of mandatory spending is increasing each year as the Boomers, the second largest generation in US history, retire. Approximately 10,000 of them retire each day- increasing the deficits by hundreds of billions a year.
Furthermore, the only way to cut these programs (via a bill introduced in the House and passed in the Senate) is basically political suicide. AARP and other senior groups are some of the most powerful and wealthy lobbying groups in the US.
If politicians don’t have the stomach to legalize marijuana- an issue that Pew research finds an overwhelming majority of Americans supporting- then why would they nuke their own careers via cutting funding to seniors right as inflation spikes?
Thus, although these obligations are not technically debt, they act as debt instruments in all other respects. The bill must be paid.
In the Fiscal Report for 2022 released by the White House, they estimated that in 2021 and 2022 the Federal deficits would be $3.669T and $1.837T respectively. This amounts to 16.7% and 7.8% of GDP (pg 42).

US Federal Budget
Astonishingly, they project substantially decreasing deficits for the next decade. Meanwhile the U.S. is slowly grinding towards a severe recession (and then likely depression) as the Fed begins their tightening experiment into 132% Federal Debt to GDP.
Deficits have basically never gone down in a recession, only up- unemployment insurance, food stamp programs, government initiatives; all drive the Treasury to pump out more money into the economy in order to stimulate demand and dampen any deflation.
To add insult to injury, tax receipts collapse during recession- so the income side of the equation is negatively impacted as well. The budget will blow out.
The U.S. 1 yr Treasury Bond is already trading at 4.7%- if we have to refinance our current debt loads at that rate (which we WILL since they have to roll the debt over), the Treasury will be paying $1.46 Trillion in INTEREST ALONE YEARLY on the debt.
That is equivalent to 40% of all Federal Tax receipts in 2021!

In my post Dollar Endgame 4.2, I have tried to make the case that the United States is headed towards an “event horizon”- a point of no return, where the financial gravity of the supermassive debt is so crushing that nothing they do, short of Infinite QE, will allow us to escape.
The terrifying truth is that we are not headed towards this event horizon.
We’re already past it.

True Interest Expense ABOVE Tax Receipts
As brilliant macro analyst Luke Gromen pointed out in several interviews late last year, if you combine Gross Interest Expense and Entitlements, on a base case, we are already at 110% of tax receipts.
True Interest Expense is now more than total Federal Income. The Federal Government is already bankrupt- the market just doesn't know it yet.

Luke Gromen Interview Transcript (Oct 2021, Macrovoices)

The black hole of debt, financed by the Federal Reserve, has now trapped the largest spending institution in the world- the United States Treasury.
The unholy capture of the Money Printer and the Spender is catastrophic - the final key ingredient for monetary collapse.
This is How Money Dies.

The Underwater State

(I had to split this post into two part due to reddit's limits, see the second half of the post HERE)

Nothing on this Post constitutes investment advice, performance data or any recommendation that any security, portfolio of securities, investment product, transaction or investment strategy is suitable for any specific person. From reading my Post I cannot assess anything about your personal circumstances, your finances, or your goals and objectives, all of which are unique to you, so any opinions or information contained on this Post are just that – an opinion or information. Please consult a financial professional if you seek advice.
*If you would like to learn more, check out my recommended reading list here. This is a dummy google account, so feel free to share with friends- none of my personal information is attached. You can also check out a Google docs version of my Endgame Series here.
I cleared this message with the mods;
IF YOU WOULD LIKE to support me, you can do so my checking out the e-book version of the Dollar Endgame on my twitter profile: https://twitter.com/peruvian_bull/status/1597279560839868417
The paperback version is a work in progress. It's coming.

THERE IS NO PRESSURE TO DO SO. THIS IS NOT A MONEY GRAB- the entire series is FREE! The reddit posts start HERE: https://www.reddit.com/Superstonk/comments/o4vzau/hyperinflation_is_coming_the_dollar_endgame_part/
and there is a Google Doc version of the ENTIRE SERIES here: https://docs.google.com/document/d/1552Gu7F2cJV5Bgw93ZGgCONXeenPdjKBbhbUs6shg6s/edit?usp=sharing

You can follow my Twitter at Peruvian Bull. This is my only account, and I will not ask for financial or personal information. All others are scammers/impersonators.

submitted by peruvian_bull to Superstonk [link] [comments]

Looking for help with FAFSA optimization for FIRE folks

I searched a little, but didn't find anything that looks like any sort of consensus, definitive best practice for FIRE community to plan on optimizing FAFSA the way we optimize federal taxes. Is it Cunningham's law that says the fastest way to get the right answer is to post the wrong one oneline? Anyway, this post is sort of my attempt at that.
Apologies in advance for being long-winded. This started out as my own notes for myself (posted to my personal blog with readership of exactly 2 people), but once I realized how much I'm probably misunderstanding, I thought I'd post here.

ETA: as u/Zphr points out in the comments here and in their post from a year ago, starting Fall of 2023 (Edit2: for FAFSA forms filled out in Fall 2023, for the 24-25 school year) there is a new path to auto-zero EFC. It'll be based on 2021 2022 tax returns, but is much more generous than previous stuff, and probably is the primary thing that FIRE folks should optimize for. Rather than repeat the details here, please follow this link (also linked below, but I hadn't appreciated how big a deal it was).

I have recently become very interested in how FAFSA works, and college finances more generally. I had a general notion of things, but between my oldest kid (whom I'll call Sonny in this post, and I'll call the next oldest Sister, so that I can repost this to reddit if I want) actually applying to schools, and my friend asking me lots of question about his kids, I have recently spent time getting a better handle on it. This post is meant to capture what I've learned. I'll update it as I find errors or learn new things. Perhaps others find it useful, but as with most of this blog, it's for me more than anyone else. This is all written to parents, so students and grandparents need to adjust accordingly.

Executive Summary

If you want to fund your grandchildren's education expenses, set up a 529 with you as the beneficiary as soon as your last child is done filling out FAFSA forms. If you want to fund your children's education expenses, first make sure you are maxing out IRAs and 401ks, and only then should you fund a 529. If you will have "low" income during any of the years your kids will be in college or grad school, there might be some benefit to keeping non-retirement assets minimal. As with all things personal finance, optimization requires a little forecasting.

"Rich" Schools vs "Regular" Schools

Some schools are very expensive, but also have large endowments. At these schools, FAFSA might still be used to calculate how much the school gives a student, but (a large portion of) the aid is coming from the school, not from the government. To quote Stanford's page on why their net cost numbers differ from information published by the Federal Government (emphasis added):
The federal data is based only on federal aid recipients. Because Stanford meets need for eligible students without expecting them to borrow, only a small portion of our aid recipients receive federal aid and are included in the federal report.
I'm fuzzy about how things work at regular schools, but I think there is a big difference between federal aid in the form of subsidized student loans and direct aid in the form of reduced tuition (or "need-based scholarship" or similar). If you "optimize" your situation and that results in you qualifying for $50k of subsidized loans instead of $30k, sure, that saves you interest. But it's not nearly as relevant as qualifying for $50k of tuition reduction instead of $30k, which is worth the full $20k.
Sonny is applying to rich schools that are very expensive. Stanford's sticker price, for example, is $82k per year. I'm not totally sure that the same optimization tradeoffs apply to regular schools, and my thinking is mostly based on Stanford-like schools (for now).

Expected Family Contribution (EFC) Heuristics

The aid calculation roughly follows a simple formula: (School Costs) - (Expected Family Contribution) = (Total Aid)
The EFC is divided by the number of students simultaneously enrolled in college. If Sonny goes to a very expensive school during the same year that Sister goes to a very cheap one, Sister might receive no aid even while Sonny receives a boatload. Since "Total Aid" can't be negative, this can only help the family as a whole.
EFC is based on 4 things, namely the assets and income of the parents and student. In each case, some of the category has an "allowance", so, for example the first $7k of student income has absolutely no affect on EFC. But at the margin, the categories' affects aid are as follows:
The allowances for each category are in the EFC Formula Guide (linked below) and depend on a few things such as family size, but for Sonny's situation, they are:

Optimization for Regular People

I don't know what "regular" means. If you're sending a kid to college at all, you're probably not early-career, and you're probably not working minimum wage. Probably you've saved for retirement, but maybe you don't have too much saved outside of retirement accounts.
If you have income of $100k and relevant assets of $100k and four kids, your EFC is about $13k. "Hiding" those assets somehow would drop it to $7.5k. So paying off your mortgage early, or spending a few years maxing out 401k contributions and spending the regular savings is probably a good strategy. Just about any school is going to cost more than $13k, so this is all useful effort. If your kid is making bank and saving for college, saving in a 529 makes the money look like parental assets instead of student assets. $10k in a 529 compared to $10k in the student's bank account affects aid to the tune of about $1,400.
If you have income of $200k, no relevant assets, and only two kids, then your EFC is about $41k. In that situation, you probably won't get any aid for "cheap" schools, so the optimization only matters if your kid goes to an expensive school, or if you can easily hide a lot of income. In other words, the best optimization for high-income folks is simply to send your kid to a cheap school.
Although EFC is calculated based on all 4 categories, what you end up with is just a single number for computing aid, and no one forces you to draw on the 4 categories in the way the formula suggests. If you expect income to be constant through four years of college, then there is a benefit to using assets to pay for tuition instead of income. That is, if you have $100k in assets and you normally pay an extra $500/month on your mortgage, don't redirect the $500/month to tuition when your kid starts college. Instead, spend down that $100k on tuition (or better yet, spend all $100k on paying down the mortgage, since your home value doesn't count for FAFSA). Similarly, if your kid earns $5k their freshman year and has $5k in the bank, you (as a fiscally responsible, long-term thinker) might want them to spend the $5k of income on tuition, and graduate with $5k still in the bank. If, instead, your kid spends $5k on a toga party with their fraternity (or a car, or whatever), it affects EFC by $1k per year and therefore only costs them $1k. Money is fungible and this gets complicated, but the point is that the EFC formula incentivizes some weird behavior. I'm not a fan of crazy shenanigans to exploit the system, but the formula certainly pushes people in the direction of shenanigans, and we each draw our own line for what counts as crazy.
FAFSA looks at your tax returns from two years ago for the purposes of income (though it looks at your present assets). It would cost you an awful lot to have a taxable windfall that shows up in AGI occur two years before a kid goes to college. For example, if your siblings decide to cash out Mom and Dad's life insurance policy early, creating a large taxable event, and then two tax-years later your kid goes to an expensive school, that windfall increases EFC by roughly 37% (assuming no SS tax on it), on top of whatever taxes you paid at the time.
Because FAFSA estimates a percentage for state tax allowance based solely on your state, not your actual state income taxes paid, 529 plans (and other state tax deductible things) can be slightly more valuable than things that provide federal tax deductions, though federal taxes are so high that it's usually still better to get a federal deduction.
Here's a tip about 529s. Beneficiaries are easily changed to any member of the family, and the account value only shows up if the owner is the student or their parent (and in both cases it shows up as parental asset). If the owner is someone else, then distributions show up as student income. Since there is a delay on how income affects FAFSA, and since there is a lifetime max of $10k for using 529s to pay down student loans, the best strategy is usually to use up to $10k of 529 money to pay down student loans after college, and if there is more than $10k available, use it for tuition during the last two years that the student would otherwise be borrowing money. A grandparent can set up a 529 with themselves as beneficiary, and easily switch the beneficiary to their grandchild at the appropriate time. I'm not sure how this works for multiple grandkids of the same age, but it does seem like you can do transfers in a way that makes this workable. If an older sibling is the owner and beneficiary and has leftover money, wait to switch to the younger sibling until the younger sibling is almost done borrowing.

Optimization for High-Asset, Low-Income People (ie, Early Retirees)

Suppose you are considering early retirement, which might drop your income dramatically. If your child will go to college in Fall of 2023, then you want your 2021 tax return to reflect that lower income. But also, you need to check whether your non-retirement assets already push you out of aid range.
If you have no income (which you won't, but let's pretend) and $1M in relevant assets (meaning, $1M outside of IRAs and 401ks) and four kids, then your EFC is about $30k. Note that available income can go negative, so even though there is a $41k allowance for income, it is not the case that your first $41k of income has no effect. If the contribution from assets pushes your adjusted available income above $35k, then the 5.65% marginal rate still applies.
Anyway, $30k of EFC means cheap schools won't give you any aid, but it's close enough that if you can easily get it down a few hundred $k (paying off mortgage, buying that car, taking that huge vacation, whatever) it might help. And of course, expensive schools cost way more than $30k, so everything counts.
If you can spend money on something you were going to buy anyway, spend that money before you fill out FAFSA.
If you can delay/defer income until your (youngest) kid is a junior or senior (and they aren't planning on using FAFSA in grad school), delaying and deferring is very valuable.
If you plan on giving your kid money that will show up on FAFSA, giving it to them after college to help them pay down student loans is probably FAR more valuable than giving it to them before college to pay for tuition. This is especially true if your are a grandparent or aunt and don't have FAFSA stuff of your own at the time.

Links and other Resources

submitted by plexluthor to financialindependence [link] [comments]

[Op-Ed] - Biden's capital gains tax rate plan a formula for economic suicide

[Op-Ed] - Biden's capital gains tax rate plan a formula for economic suicide submitted by AutoNewsAdmin to TWTauto [link] [comments]

Hyperinflation is Coming- The Dollar Endgame: PART 5.1- "Enter the Dragon" (SECOND HALF OF FINALE)

Hyperinflation is Coming- The Dollar Endgame: PART 5.1-

(Hey everyone, this is the SECOND half of the Finale, you can find the first half here)

The Dollar Endgame

True monetary collapses are hard to grasp for many in the West who have not experienced extreme inflation. The ever increasing money printing seems strange, alien even. Why must money supply grow exponentially? Why did the Reichsbank continue printing even as hyperinflation took hold in Germany?
What is not understood well are the hidden feedback loops that dwell under the surface of the economy.
The Dragon of Inflation, once awoken, is near impossible to tame.
It all begins with a country walking itself into a situation of severe fiscal mismanagement- this could be the Roman Empire of the early 300s, or the German Empire in 1916, or America in the 1980s- 2020s.
The State, fighting a war, promoting a welfare state, or combating an economic downturn, loads itself with debt burdens too heavy for it to bear.
This might even create temporary illusions of wealth and prosperity. The immediate results are not felt. But the trap is laid.
Over the next few years and even decades, the debt continues to grow. The government programs and spending set up during an emergency are almost impossible to shut down. Politicians are distracted with the issues of the day, and concerns about a borrowing binge take the backseat.
The debt loads begin to reach a critical mass, almost always just as a political upheaval unfolds. Murphy’s Law comes into effect.
Next comes a crisis.
This could be Visigoth tribesmen attacking the border posts in the North, making incursions into Roman lands. Or it could be the Assassination of Archduke Franz Ferdinand in Sarajevo, kicking off a chain of events causing the onset of World War 1.
Or it could be a global pandemic, shutting down 30% of GDP overnight.
Politicians respond as they always had- mass government mobilization, both in the real and financial sense, to address the issue. Promising that their solutions will remedy the problem, a push begins for massive government spending to “solve” economic woes.
They go to fundraise debt to finance the Treasury. But this time is different.
Very few, if any, investors bid. Now they are faced with a difficult question- how to make up for the deficit between the Treasury’s income and its massive projected expenditure. Who’s going to buy the bonds?
With few or no legitimate buyers for their debt, they turn to their only other option- the printing press. Whatever the manner, new money is created and enters the supply.
This time is different. Due to the flood of new liquidity entering the system, widespread inflation occurs. Confounded, the politicians blame everyone and everything BUT the printing as the cause.
Bonds begin to sell off, which causes interest rates to rise. With rates suppressed so low for so long, trillions of dollars of leverage has built up in the system.
No one wants to hold fixed income instruments yielding 1% when inflation is soaring above 8%. It's a guaranteed losing trade. As more and more investors run for the exits in the bond markets, liquidity dries up and volatility spikes.
The MOVE index, a measure of bond market volatility, begins climbing to levels not seen since the 2008 Financial Crisis.

MOVE Index
Sovereign bond market liquidity begins to evaporate. Weak links in the system, overleveraged several times on government debt, such as the UK’s pension funds, begin to implode.
The banks and Treasury itself will not survive true deflation- in the US, Yellen is already getting so antsy that she just asked major banks if Treasury should buy back their bonds to “ensure liquidity”!
As yields rise, government borrowing costs spike and their ability to roll their debt becomes extremely impaired. Overleveraged speculators in housing, equity and bond markets begin to liquidate positions and a full blown deleveraging event emerges.
True deflation in a macro environment as indebted as ours would mean rates soaring well above 15-20%, and a collapse in money market funds, equities, bonds, and worst of all, a certain Treasury default as federal tax receipts decline and deficits rise.
A run on the banks would ensue. Without the Fed printing, the major banks, (which have a 0% capital reserve requirement since 3/15/20), would quickly be drained. Insolvency is not the issue here- liquidity is; and without cash reserves a freezing of the interbank credit and repo markets would quickly ensue.
For those who don’t think this is possible, Tim Geitner, NY Fed President during the 2008 Crisis, stated that in the aftermath of Lehman Brothers’ bankruptcy, we were “We were a few days away from the ATMs not working” (start video at 46:07).
As inflation rips higher, the $24T Treasury market, and the $15.5T Corporate bond markets selloff hard. Soon they enter freefall as forced liquidations wipe leverage out of the system. Similar to 2008, credit markets begin to freeze up. Thousands of “zombie corporations”, firms held together only with razor thin margins and huge amounts of near zero yielding debt, begin to default. One study by a Deutsche analyst puts the figure at 25% of companies in the S&P 500.
The Central Banks respond to the crisis as they always have- coming to the rescue with the money printer, like the Bank of England did when they restarted QE, or how the Bank of Japan began “emergency bond buying operations”.
But this time is massive. They have to print more than ever before as the ENTIRE DEBT BASED FINANCIAL SYSTEM UNWINDS.
QE Infinity begins. Trillions of Treasuries, MBS, Corporate bonds, and Bond ETFs are bought up. The only manner in which to prevent the bubble from imploding is by overwhelming the system with freshly printed cash. Everything is no-limit bid.
The tsunami of new money floods into the system and a face ripping rally begins in every major asset class. This is the beginning of the melt-up phase.
The Federal Reserve, within a few months, goes from owning 30% of the Treasury market, to 70% or more. The Bank of Japan is already at 70% ownership of certain JGB issuances, and some bonds haven’t traded for a record number of days in an active market!
The Central Banks EAT the bond market. The “Lender of Last Resort” becomes “The Lender of Only Resort”.
Another step towards hyperinflation. The Dragon crawls out of his lair.

QE Process
Now the majority or even entirety of the new bond issuances from the Treasury are bought with printed money. Money supply must increase in tandem with federal deficits, fueling further inflation as more new money floods into the system.
The Fed’s liquidity hose is now directly plugged into the veins of the real economy. The heroin of free money now flows in ever increasing amounts towards Main Street.
The same face-ripping rise seen in equities in 2020 and 2021 is now mirrored in the markets for goods and services.
Prices for Food, gas, housing, computers, cars, healthcare, travel, and more explode higher. This sets off several feedback loops- the first of which is the wage-price spiral. As the prices of everything rise, real disposable income falls.
Massive strikes and turnover ensues. Workers refuse to labor for wages that are not keeping up with their expenses. After much consternation, firms are forced to raise wages or see large scale work stoppages.

Wage-Price Spiral
These higher wages now mean the firm has higher costs, and thus must charge higher prices for goods. This repeats ad infinitum.
The next feedback loop is monetary velocity- the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy.
The faster the dollar turns over, the more items it can bid for- and thus the more prices rise. Money velocity increasing is a key feature of a currency beginning to inflate away. In nations experiencing hyperinflation like Venezuela, where money velocity was purported to be over 7,000 annually- or more than 20 times a DAY.
As prices rise steadily, people begin to increase their inflation expectations, which leads to them going out and preemptively buying before the goods become even more expensive. This leads to hoarding and shortages as select items get bought out quickly, and whatever is left is marked up even more. ANOTHER feedback loop.
Inflation now soars to 25%. Treasury deficits increase further as the government is forced to spend more to hire and retain workers, and government subsidies are demanded by every corner of the populace as a way to alleviate the price pressures.
The government budget increases. Any hope of worker’s pensions or banks buying the new debt is dashed as the interest rates remain well below the rate of inflation, and real wages continue to fall. They thus must borrow more as the entire system unwinds.
The Hyperinflationary Feedback loop kicks in, with exponentially increasing borrowing from the Treasury matched by new money supply as the Printer whirrs away.
The Dragon begins his fiery assault.

Hyperinflationary Feedback Loop
As the dollar devalues, other central banks continue printing furiously. This phenomenon of being trapped in a debt spiral is not unique to the United States- virtually every major economy is drowning under excessive credit loads, as the average G7 debt load is 135% of GDP.
As the central banks print at different speeds, massive dislocations begin to occur in currency markets. Nations who print faster and with greater debt monetization fall faster than others, but all fiats fall together in unison in real terms.
Global trade becomes extremely difficult. Trade invoices, which usually can take several weeks or even months to settle as the item is shipped across the world, go haywire as currencies move 20% or more against each other in short timeframes. Hedging becomes extremely difficult, as vol premiums rise and illiquidity is widespread.
Amidst the chaos, a group of nations comes together to decide to use a new monetary media- this could be the Special Drawing Right (SDR), a neutral global reserve currency created by the IMF.
It could be a new commodity based money, similar to the old US Dollar pegged to Gold.
Or it could be a peer-to-peer decentralized cryptocurrency with a hard supply limit and secure payment channels.
Whatever the case- it doesn't really matter. The dollar will begin to lose dominance as the World Reserve Currency as the new one arises.
As the old system begins to die, ironically the dollar soars higher on foreign exchange- as there is a $20T global short position on the USD, in the form of leveraged loans, sovereign debt, corporate bonds, and interbank repo agreements.
All this dollar debt creates dollar DEMAND, and if the US is not printing fast enough or importing enough to push dollars out to satisfy demand, banks and institutions will rush to the Forex market to dump their local currency in exchange for dollars.
This drives DXY up even higher, and then forces more firms to dump local currency to cover dollar debt as the debt becomes more expensive, in a vicious feedback loop. This is called the Dollar Milkshake Theory, posited by Brent Johnson of Santiago Capital.
The global Eurodollar Market IS leverage- and as all leverage works, it must be fed with new dollars or risk bankrupting those who owe the debt. The fundamental issue is that this time, it is not banks, hedge funds, or even insurance giants- this is entire countries like Argentina, Vietnam, and Indonesia.

The Dollar Milkshake
If the Fed does not print to satisfy the demand needed for this Eurodollar market, the Dollar Milkshake will suck almost all global liquidity and capital into the United States, which is a net importer and has largely lost it’s manufacturing base- meanwhile dozens of developing countries and manufacturing firms will go bankrupt and be liquidated, causing a collapse in global supply chains not seen since the Second World War.
This would force inflation to rip above 50% as supply of goods collapses.
Worse yet, what will the Fed do? ALL their choices now make the situation worse.

The Fed's Triple Dilemma
Many pundits will retort- “Even if we have to print the entire unfunded liability of the US, $160T, that’s 8 times current M2 Money Supply. So we’d see 700% inflation over two years and then it would be over!”
This is a grave misunderstanding of the problem; as the Fed expands money supply and finances Treasury spending, inflation rips higher, forcing the AMOUNT THE TREASURY BORROWS, AND THUS THE AMOUNT THE FED PRINTS in the next fiscal quarter to INCREASE. Thus a 100% increase in money supply can cause a 150% increase in inflation, and on again, and again, ad infinitum.
M2 Money Supply increased 41% since March 5th, 2020 and we saw an 18% realized increase in inflation (not CPI, which is manipulated) and a 58% increase in SPY (at the top). This was with the majority of printed money really going into the financial markets, and only stimulus checks and transfer payments flowing into the real economy.
Now Federal Deficits are increasing, and in the next easing cycle, the Fed will be buying the majority of Treasury bonds.
The next $10T they print, therefore, could cause additional inflation requiring another $15T of printing. This could cause another $25T in money printing; this cycle continues forever, like Weimar Germany discovered.
The $200T or so they need to print can easily multiply into the quadrillions by the time we get there.
The Inflation Dragon consumes all in his path.
Federal Net Outlays are currently around 30% of GDP. Of course, the government has tax receipts that it could use to pay for services, but as prices roar higher, the real value of government tax revenue falls. At the end of the Weimar hyperinflation, tax receipts represented less than 1% of all government spending.
This means that without Treasury spending, literally a third of all economic output would cease.
The holders of dollar debt begin dumping them en masse for assets with real world utility and value- even simple things such as food and gas.
People will be forced to ask themselves- what matters more; the amount of Apple shares they hold or their ability to buy food next month? The option will be clear- and as they sell, massive flows of money will move out of the financial economy and into the real.
This begins the final cascade of money into the marketplace which causes the prices of everything to soar higher. The demand for money grows even larger as prices spike, which causes more Treasury spending, which must be financed by new borrowing, which is printed by the Fed. The final doom loop begins, and money supply explodes exponentially.

German Hyperinflation
Monetary velocity rips higher and eventually pushes inflation into the thousands of percent. Goods begin being re-priced by the day, and then by the hour, as the value of the currency becomes meaningless.
A new money, most likely a cryptocurrency such as Bitcoin, gains widespread adoption- becoming the preferred method and eventually the default payment mechanism. The State continues attempting to force the citizens to use their currency- but by now all trust in the money has broken down. The only thing that works is force, but even the police, military and legal system by now have completely lost confidence.
The Simulacrum breaks down as the masses begin to realize that the entire financial system, and the very currency that underpins it is a lie- an illusion, propped up via complex derivatives, unsustainable debt loads, and easy money financed by the Central Banks.
Similar to Weimar Germany, confidence in the currency finally collapses as the public awakens to a long forgotten truth-
There is no supply cap on fiat currency.

QE Infinity

When asked in 1982 what was the one word that could be used to define the Dollar, Fed Chairman Paul Volcker responded with one word-
All fiat money systems, unmoored from the tethers of hard money, are now adrift in a sea of illusion, of make-believe. The only fundamental props to support it are the trust and network effects of the participants.
These are powerful forces, no doubt- and have made it so no fiat currency dies without severe pain inflicted on the masses, most of which are uneducated about the true nature of economics and money.
But the Ships of State have wandered into a maelstrom from which there is no return. Currently, total worldwide debt stands at a gargantuan $300 Trillion, equivalent to 356% of global GDP.
This means that even at low interest rates, interest expense will be higher than GDP- we can never grow our way out of this trap, as many economists hope.
Fiat systems demand ever increasing debt, and ever increasing money printing, until the illusion breaks and the flood of liquidity is finally released into the real economy. Financial and Real economies merge in one final crescendo that dooms the currency to die, as all fiats must.
Day by day, hour by hour, the interest accrues.
The Debt grows larger.
And the Dollar Endgame Approaches.

Nothing on this Post constitutes investment advice, performance data or any recommendation that any security, portfolio of securities, investment product, transaction or investment strategy is suitable for any specific person. From reading my Post I cannot assess anything about your personal circumstances, your finances, or your goals and objectives, all of which are unique to you, so any opinions or information contained on this Post are just that – an opinion or information. Please consult a financial professional if you seek advice.
*If you would like to learn more, check out my recommended reading list here. This is a dummy google account, so feel free to share with friends- none of my personal information is attached. You can also check out a Google docs version of my Endgame Series here.
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IF YOU WOULD LIKE to support me, you can do so my checking out the e-book version of the Dollar Endgame on my twitter profile: https://twitter.com/peruvian_bull/status/1597279560839868417
The paperback version is a work in progress. It's coming.
THERE IS NO PRESSURE TO DO SO. THIS IS NOT A MONEY GRAB- the entire series is FREE! The reddit posts start HERE: https://www.reddit.com/Superstonk/comments/o4vzau/hyperinflation_is_coming_the_dollar_endgame_part/
and there is a Google Doc version of the ENTIRE SERIES here: https://docs.google.com/document/d/1552Gu7F2cJV5Bgw93ZGgCONXeenPdjKBbhbUs6shg6s/edit?usp=sharing

You can follow my Twitter at Peruvian Bull. This is my only account, and I will not ask for financial or personal information. All others are scammers/impersonators.

submitted by peruvian_bull to Superstonk [link] [comments]

[Op-Ed] - Biden's capital gains tax rate plan a formula for economic suicide | Washington Times

[Op-Ed] - Biden's capital gains tax rate plan a formula for economic suicide | Washington Times submitted by AutoNewspaperAdmin to AutoNewspaper [link] [comments]

Marginal tax rate table formula

If someone had a taxable income of $5000, their income tax would be 10% of that since it's less than $9875. If it were $15,000, you would do (15,000-9,875)*.12+987.50. Edit: Columns R:U are irrelevant for this topic.
submitted by Freds_Premium to excel [link] [comments]

How to time the Bottom of the Market?

How to time the Bottom of the Market?
On, September 21st, 2022, the United States Federal Reserve shocked the market with what seemed an outrageous projection for the federal funds rate. Some projections from the FOMC members of 5.25% stretch out until the end of 2023. One of the hawks FED meetings that the market has seen. Subsequently, the market fell almost 5% off after hearing this news and digesting the hard pill to swallow.
However, the Bank of England just started to bail out the economy. Quite a different bit of tone and policy structure. Opposite. Bank of England just announced an “Unlimited QE” policy. Essentially printing an unlimited amount of money to purchase bonds to lower their interest rates for government borrowing. All while, lowering tax rates for the UK. Dumping billions of dollars into the economy for a short period.
A policy like this of “Unlimited QE” we saw back in 2020 through 2021 from our own US government. To bail out the economy through any means possible. Was the slogan of the Federal reserve. Will a similar style or U-turn happen from the federal reserve in the United States? Only time will tell. It has been almost impossible to guess or predict what the federal reserve is going to do.
However, as traders and investors, we can use historical data to be able to predict when markets have bottomed or when they will bottom. Historically it is when the Federal Funds rate projections start to come down from elevated levels. Let’s go back to the year 1973 to 1985 when inflation was at similar levels of above 7%.
SPX vs Funds Rate
As seen above, the bottoms came when the fund’s rate started a “U-Turn”. The rates were being pushed higher and higher both times. Then subsequently when the Funds rate started to decline at an accelerated rate.
We can use this data to make educated trades. Now we just have to wait and have patience as traders and investors to start buying into the market when the Funds Rate starts to have rate cuts. This is key for investors.
Federal Funds bonds project that the rates will reach 4.75% and not start price cuts until December of 2023. This is a long time away, allowing the market to have significant pain until then. Benchmark Trades believes that the fund’s rate will most likely come down much sooner. When they start coming down, or at least projections start coming in. This is when Benchmark Trades will be looking for long-term investable levels in Stocks, and ETFs.
The above shows, every single recession in the United States correlated to the S&P 500. It shows almost every single recession in the US, has been the bottom of a market. The issue is, recessions are a lagging indicator and such a long period. A technical recession occurs when you get two-quarters of negative GDP growth. However, the majority of the bottoms come near the end of the recession.
So how do we look at the recession ending? Leading indicators. Such as ISM manufacturing, Consumer confidence, and the Advanced GDP projection. The Key indicator that Benchmark Trades is going to be using, is Advanced GDP estimations. Not the actual read, but the projections. Due, to a slow in demand, and wealth destruction it is unlikely that Q3 will post a positive read. This being the case, we are looking for not even the end of the recession ending until Q1 of 2023 being a very bullish case.
So take your, estimation of when you think we will see economic GDP expansion again, and start adding to investable levels one quarter before. This is what history tells us to do. Since we aren’t the smartest in the room. Benchmark Trades looks at what other analysts project the Advanced GPD read will be. These normally come out 1-2 weeks before the actual read.

Market Analysis

As stated in the last newsletter, we were excepting a market bounce off of new lows. Creating a little bit of a bear bounce or bull trap. This is exactly what is starting to present itself. A little bit of support is structured near 360.
SPY Coiling
With no new lows creating themselves the low was 360.69. Only, 19 cents from the current relative lows that we saw in June. Not creating new lows is significant for the stock market. It allows the market not to get vacuum liquidated. Meaning that the market will not liquidate and force sell all of the stop orders and sell alerts for new lows.
Stopping right before the new relative bottoms, it created this little support bottom. It now as of 9/28 at Noon, is looking to start to fill Gap #1 from the last article. As of Investopedia on average 9 out of 10 gaps get filled. Meaning that it is highly likely that the gap becomes filled soon. And as of now, our positions are perfectly aligned to capture this short-term bull trap and bear bounce.

Technical Analysis Prediction

With two large gaps created in the last month, the market has been on a quick pace to make new lows. However, stopping 19 cents above new lows the market is bouncing. Up 1.5% intraday looking to close the gap #1. With a good enough bounce the market could be on a trajectory to hit the support resistance line created from July/August lows and the resistance created on FOMC projection release day.
Benchmark Trades, thinks that it is highly likely that we see at least Gap #1 filled. Furthermore, we suggest that the resistance line will also be met in the following week or weeks. This will come from exhaustion from sellers and a miniature short squeeze. If we see the resistance line broken, I would not be surprised to see the GAP #2 tap.
However, it would not surprise the market to fill gap #1 and then move down further. This would not be optimal for the Benchmark Trade Tracker, however, would is being well hedged against if it does happen.

Upcoming Market Moving Events

Track these events for Pivots in the Market, you can find a nice customizable calendar at ForexFactory.com.
  • Sept 30th, CORE PCE Price Index
  • Oct 7th, Unemployment Rate
  • Oct 16th, China Communist Party Congress Start


Timing the market bottom does not have to be as complicated as people make it seem. You might just not get to the market bottom but you will get close. Being consistent in investing and not betting the farm on your trades will ensure that you will have a portfolio that outperforms the market.
If you found value in this Please read our full newsletter at Benchmark-Trades
submitted by Benchmark-Trades to swingtrading [link] [comments]

How do I create a single formula for calculating the tax rate in order to get net profit after taxes, when the profits are taxed at a slab rate?

I need to calculate the net profit after taxes for a proprietorship here in Bangladesh. The thing is, for proprietorships, the profits first go to the owner and its then taxed at a slab. THe first 250,000 is not taxed, the next 200,000 is taxed at 20% and the next 200,000 after the 450,000 is taxed at 30% and so on. [this is just an example and not the actual tax slabs and tax rates].
I need a single formula that I can enter in excel and then play with the numbers to see how much the net profit after tax comes out to be with different net profits. Can someone provide a general formula here?
submitted by Experimentalphone to NoStupidQuestions [link] [comments]

Balance Sheet Primer from a CPA - Part II - Let's use GME & BBBY as we learn

Balance Sheet Primer from a CPA - Part II - Let's use GME & BBBY as we learn
Hi all - After some feedback from my Cash Flow post, I decided to do a similar one on reading a Balance Sheet (B/S). Some other comments wanted me to review BBBY's, so I figured I'd do GME & BBBY side by side. The businesses are not directly related, but part of financial analysis is analyzing across different companies to find commonality. We're all different people, but in general there's a desired range for keeping your health stats in. A vital being outside of a range isn't necessarily bad, just something to investigate. Same deal here, I'm looking for outliers to cue up some questions to Ops to better understand why. If you haven't read my prior post, I'd start there. In that post I talk about my background and why I read things the way I do. When I read the financials, I read them in the order of (Cash Flow Statement / Balance Sheet / Income Statement). Since cash is king I want to see that first. Then I want to see how a company is managing it's B/S, and lastly the Income Statement. Given the nature of accounting, an Income Statement (P&L) can look okay, but problems can lurk on the balance sheet.
Also keep in mind that since we're dealing with publicly traded companies, an army of accountants prepare these statements, and they're reviewed/audited by a firm with their own army. Bigger companies can be complex, so that when you're doing your own analysis, your numbers might look weird. Don't get discouraged, odds are there's an offset somewhere or the information is in the footnotes. I'd suggest trying to create your own calculations for things, and then compare it to a finance site for that company. I do this for a living and I get turned around.
This is all meant to be a primer, so I do breeze by a couple things. If you want to nerd out more, feel free to PM me. Trying to hit a broad group, so if anything is vague or unclear, please comment and I'll clarify :)
Accounting background: If you don't care about debits and credits, skip down to the "BBBY & GME Balance Sheet Review" portion below. I noticed some comments seemed to have an interest in the actual accounting of all this, so I wanted to touch on that. If you want to pursue a career in Accounting, I'd suggest watching some intro videos on YT, and visit Accountingcoach.com. I go there to check myself sometimes, and their explanations are down to earth and easy to follow. From a career standpoint going the bookkeeper route is a good foot in the door. Then you can grow to an Associate's/BacheloMaster's/CPA/CMA/etc in the field. There's so much more to Accounting besides booking invoices or paying bills. Accounting touches all aspects of a business. I went a non-traditional accounting route, but I love this part of my career. Where I'm usually sitting with Ops helping to figure out their processes and work flows to improve the shop floor and hopefully profitability. Typically a field of dreams scenario where "if you fix it, income will follow". If not, well, we'll try something else :)
Basic Accounting Equation: Assets = Liabilities + Owner's Equity
It really all starts with the above equation, why Debits = Credits and why all this works. By ensuring debits = credits, with some other balance reviews, basically I can feel comfortable that the statements are correctly stated. To put this equation into real terms, I think home ownership is a good example. The value of your home is equal to your mortgage plus your equity in the house. Meaning if I buy a house and put 100k down:
500k house = 400k note + 100k Owner's Equity
If the value of my goes up 50k the next day, it now looks like
550k house = 400k note + 150k Owner's Equity.
As I pay my note down, it shifts like:
550k house = 350k note + 200k Owner's Equity
Which logically makes sense, debt when paid down on the house is turning that debt into equity, that you can one day turn into cash when the house is sold. But let's say we want to start a business, we'll need to expand upon this equation.
Expanded Accounting Equation: Assets = Liabilities + Contributed Capital + Beginning Retained Earnings + Revenue - Expenses - Dividends
If you've ever wondered why Revenue is sometimes represented as a credit (negative) number, this is why. Economic changes to the business are effectively changes to the Owner's stake in the business. Meaning everything that happens on the income statement is a change to the Owner's Equity (OE) section in the long run. If I sold $500 of stuff for cash, That sales entry is
Debit (DR) Cash $500 (Balance Sheet)
Credit (CR) Revenue $500 (Income Statement).
If we pause there, this again follows the accounting logic. An increase in revenue is an increase to the Owner's equity. Since Owner's Equity is on the right side of the equation, you increase that by increasing the credit (typically portrayed as a negative) number. Likewise when we receive $500 cash, and that's on the left side of the equations, it increases on a debit. Which is typically represented as an increase using a positive figure. So that at month end as part of my review I'll add up all debits and all credits (trial balance) and they should cancel each other and leave a $0 balance for the month. I'll stop here as this is a whole thing. When I was in school, most kids just try to memorize which action increases which way on which sign. In hindsight I think it's more important to understand the expanded Accounting Equation, and let that guide you in what the different signs and balances mean. Once you understand the expanded equation, it'll be second nature what increases on a credit and vice versa. For analysis purposes, this will already be given to you.
Balance Sheet: All that to say, the specific purpose of the balance sheet is to report assets and liabilities (and Owners Equity) at a specific time. Because Accounting is a dual entry (debits = credits) system, it's important to look at the B/S side to a business's P&L. Since you could have a situation where Operations is basically throwing sh*t over a fence. Meaning "We've crushed sales expectations, beer me bro". Meanwhile most of those sales were on questionable credit accounts, vendors can't deliver the goods, and I have monster warranty expenses coming back. And now one of our products smacked a lady in the face so we have some legal provisions building. So our great looking P&L now punched some holes on the B/S that you can drive a car through.
Analysis: There's two main types of analysis I typically do, over time and comparative. Over time is for obvious reasons, are balances moving in a healthy way as we march through time? So here I typically look at raw numbers and their directional change to that account.
Second I like to use ratios to measure the business over time, and then compare that other businesses. That gives me confidence that we're not in left field as compared to our competitors. I'll give ratio examples below as we go through the two companies. Honestly the ratios CPA's use will look pretty basic to what someone like DFV was doing in his streams. But that's what I love about this area of work. Where my work ends (getting financials produced and checking for reasonableness/completeness/planning/budget), his work begins in doing detailed CFA type work. I have no interest in doing CFA work, and a CFA would probably be bored to tears doing what I love. But there's space for everybody in Finance.
Structure: On a B/S, the main parts are the Assets & Liabilities portions. Within those, you have Current and Long-term. Current is due within a year, non-current is longer. Inventory is composed of items that will be consumed in the revenue process. For a retail business, this is basically the stuff on the shelves. Fixed Assets are items that are long-term by nature and help to run the business (PP&E, buildings, etc). But aren't for sale as part of the normal, recurring business model. Fixed Assets are depreciated over time as well. But it's key that people understand the difference. As a certain level of fixed assets is required and maintained to run a business. But inventory should flex with revenue. Meaning I'll have a plan/budget where I model out what I expect to sell in coming months, and I will raise/lower my inventory to meet that. You only want enough inventory on the shelves to meet upcoming sales forecast. Nothing more, nothing less. Intangibles are a thing on the B/S, but I don't see a lot here so for brevity I'm skipping it.
On the liabilities side, same deal. Current (less than a a year) Liabilities are going to be debt typically incurred in the normal course of business, AP, gift card sales, taxes payable, etc. Notes are long-term. Lease accounting has tightened up over the years substantially. It's a bit much for here, but know when you see an operating lease liability, it's something the business can't usually easily get out of in the short term. So short of looking through the footnotes for details, I'd peg it as long-term unless they split out the current portion of the operating lease from the long-term portion of the operating lease.
BBBY & GME Q2 Balance Sheet Review. I know these companies operate on different fiscal years, but for ease I'm just going to compare both Q2 statements. So I'll just start with Assets, and then work my way down. I'll explain each section with what I'm looking for. Side note I'm just here to point the math out, so this will read a bit clinical. Where this falls into the current valuation is up to you.
In thousands, so multiply by 1k to get full value. For simplicity's sake on my ratios I'll just take the figures as shown rather than multiply out both sides by 1k.
Starting with assets, couple things jump out. Cash is way down Aug 2022 as compared to Aug 2021. Inventory is flat, but at least prepaid has drawn down. This is good as it means we used less cash as we consumed prepaid items that we bought awhile back.
Property & Equipment (PP&E) is up slightly, and Operating lease Assets is down slightly. So maybe they moved some things off lease into PP&E. Other assets is down as well, but we don't have visibility into that.
Poking at inventory means we need to go look at the income statement to see what's going on with revenue. I'm okay with inventory being flat if sales are also flat to up for the same period.

So definitely not flat. Q2 over Q2 (QoQ) it looks like ~$550M drop. $550M drop on a starting figure of 1.984B is a 27% drop. Since this is inventory, I do like to check for flat-ish gross profit. Since if we're not moving things for the price we used to, could point to a looming inventory revaluation. Again not super likely just yet in this scenario, but something to consider. For Aug 2021, gross margin was 30.2%. For Aug 2022, it fell to 27.7%. Which a 1% gain/loss on gross margin is kind of a thing, negative change of 2.5% is something.
Pausing right here for a second: Gross profit (GP) is (Revenue - Cost of Goods Sold). Gross Margin (GM) is (Gross Profit / Revenue). Cost of Goods Sold (COGS) is only expenses directly consumed in producing that inventory. So if we're selling shoes, just the cost of building that shoe, the labor, materials, and overhead. Both figures are important for different reasons. But I'll pause there as this is more of a P&L thing and I'll post a write-up on that statement as well next week.

Same deal here, but on the liabilities sign. Looks like total current liabilities is down, my leases are down, and the only thing that's up is LT debt. Looks like a LT debt jump of almost 50%. But current liabilities down in the face of lower revenue is a good thing. LT debt we need a little more info to make a judgement call.
Current ratio is a solid indicator ( Total Current Assets / Total Current Liabilities). It measures a company's liquidity in paying current bills. We do this every pay period in our own lives. If my monthly paycheck is $5k and I have $10k in bills due every month, that's a problem. Same deal here. A value of 1-2 is good, depending on your risk tolerance is where you'd fall within that. But looking here I have CA $1,904 / CL $1,828, so CR of 1.04. A little on the low end, so I'll pull in the quick ratio to confirm my hunch that liabilities are a bit high
Quick ratio: Is a stricter liquidity test, it's meant to focus only on the items that can be quickly turned into cash to pay the bills. Couple different ways to define this ratio, but it's (Current Assets - Inventory - Prepaid / Current Liabilities). Like payday is two weeks away and I owe $5k today - what can I quickly pawn off to cover that bill. If we think about it, inventory isn't really that liquid. Since if you need cash that badly, and could quick-turn inventory, you probably wouldn't be in this spot you're in without some deep discounts. Again we're looking for a ratio of at least 1-2, but it varies. For Q2, this formula is (135,270 / 1,828,468) = 0.07. Which is one of the lowest I've seen in awhile.
Even at a high level, you can see AP is about 6 times what current cash is. And AP is almost always items due with in the coming 30-45 days.
Inventory: Inventory turnover (COGS / Average Inventory) is a key metric, it measures how quickly a company can turn over it's inventory in a given period. Higher turns is good as it means inventory is moving and demand is high(er). This is important as inventory that sits on a shelf and ages is a problem. It's costly to maintain, susceptible to theft, damage, write downs, etc. Looks like this ratio has dropped from 3.73 in Aug 2021 to 2.77 in Aug 2022. Which is a sizeable drop. Also suggest to me that inventory is risking going stale and I'm sure the auditors will be poking at that.
Sidebar: All these inventory ratios are already available, so not a real need to re-calc yourself. Just like to show my math on stuff. I'm being a bit lazy with these turn calcs so I took a shortcut via google. There's a whole world to inventory management, but it's beyond the scope here.
So out of the gate, Current Ratio here is 2.16 (2,019.2 / 932.4). Quick ratio of ((908.9+99.6)/932.4) is 1.08, so pretty liquid. Inventory turnover for Q2 2022 was 5.16, Q2 2021 was 6.13. So also a drop, but percentage wise not as bad. Comparing the two stores we see that GME is turning over its inventory almost twice as fast as BBBY, which is helpful in generating cash. Since inventory sitting on a shelf is cash that is tied up. Furthermore GME has borderline excess cash, depending on who's looking at these numbers. Whereas if BBBY is facing a cash crunch. Not impossible, but it's a tough spot.

Equity: Equity is important for a company as it shows the owner's have skin in the game and the company is generating recurring profits. Going back to the house example, if you're moving in a house for the long term, odds are you going to put more cash into the house. As opposed to a house I'm flipping, where I'm only putting in enough cash to secure the property, pile on the debt, and subsequently sell it for a gain (hopefully).
Equity deficits should be noted. In our original house example of our house that costs 500k, we put a mortgage of 400k, leaving us with equity of 100k. When there's a deficit, it flips the script. So in this is scenario, let's say the current economy tanked our house's value down to 350k. So what was a healthy setup:
500k house = 400k note + 100k equity
Is now not as fun to look at:
350k house = 400k note + (-50K) equity.
Main thing here is to look at the amount of long term debt against equity. The more you believe in the company, the more equity you're going to have. But if you're a PE looking for all that sweet EBITDA and cash draws with eventual sale based on multiples, suck it all out and move along.

BBBY: Main takeaway here is there's actually a deficit. Which means we've either been incurring repeated loses or paying dividends. With only this B/S information, I'm already leaning towards sustained losses given how Cash/AP/Inventory looks.
My main concern with is the equity deficit, against the long term debt of $1.729 and operating leases of 1.479B. That's a mountain to climb.
GME: Looking in my above screenshot, it appears Equity is also decreasing (1,852.0 to 1,343.5). So without looking at the P&L I know there's some issues, but long term debt is pretty minimal. It's almost too conservative, could be leveraged more, but the accountant in me is sleeping easy on this.
Key takeaways. There are ratios for everything, so below is just a summary of the ones I use. It's not all-inclusive, there's tons, but for my job it generates enough questions that I can go to Operations and start working through some things. For you as you learn more, it'll be about which ratios provide you comfort in a company's dealings and you being able to invest on that.
For BBBY, there's some obvious headwinds and the B/S is looking a bit rough. I've seen worse B/S and those people survived. But long-term management has to grab this one by the reins as it's a burning platform type scenario and decisive action is needed to save this. I know $3 looks pretty cheap now, but the way this B/S looks, without strong action to turn this around, $3 could look high in a few months.
I did glance at their Q2 cash flow statement, and it's more of the same. Sizeable cash outlays for Operating & Investing, buoyed by taking on additional debt in the Financing section. So hopefully they've stopped the bleeding and can start shoring up some cash via increased margins. I stopped short of looking at their P&L since I already have enough to go on for now.
For GME, it's honestly kind of boring as this is pretty textbook of a solid B/S. Strong cash, almost too little debt, good equity, inventory is moving. Given the war chest of cash, it implies they have room to be strategic with their future moves. Without having someone to force them to do so. Not a lot to add here.
Assets methodology: In the asset section, first I'm checking for liquidity (Current Ratio / Quick Ratio). Then I want to see inventory flexing with revenue. I also want to see A/R flat to down over time to show we don't have problems collecting. Lastly I do want to see some amount of fixed assets, but just enough. Which there are ratios to gauge this. But too much fixed assets implies a high break-even to cover the fixed costs. Too little suggests future improvements might be needed or the company is running on some jack-legged stuff in constant need of repair
Liabilities methodology: Just like you would in your household budget, is the Current Liabilities section reasonable considered the Current Asset and Revenue figures? Is the long term debt appropriate for the amount of equity we have? Can we service these payments via our incoming cash? Lastly is the level of debt we're carrying as compared to other figures appropriate to other companies in our industry?
Equity methodology: I check Retained Earnings over time, look for deficits, and look at these values compared to the liabilities section as well as equity ratios against my competitors.
Summary: If you've made it this far, appreciate your time. I'm off work today and interest was high, so wanted to push this out and go knock back a few beers while watching some soccer. Hopefully this post has sparked enough of an interest to dive deeper. I do think the B/S gets passed over for sexier looking P&L's since that's where the action is. But my hope is you see it's almost more interesting over here. Shameless plug: I do this type consulting for a number of businesses in my network. So if you know any businesses that want any sort of Accounting or FP&A services, feel free to reach out :)
Or if you're interested in an Accounting career, ping me and we'll talk. My life is more of a cautionary tale, so hopefully I can help you avoid some of the mistakes I made.
Thanks :)
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