Bush-Era Tax Cuts Extended

Announcements:

• My interview will Hedge Fund Manager, Tim Ayles regarding market outlook and how to trade 2011 will be debuted on December 17, 2010
• December Book of the Month is Aftershock by Robert Reich.  Book may be purchased through the Amazon link to the left of this writing

President Obama announced today that the Bush Tax Cuts will be extended for 2 years.  Markets surged at the open but ended lower with Dow down 3 points, Nasdaq up 4 points and S&P up just under a point.

Whether you agree with the tax extensions or not is your own personal opinion.  As far as the financial facts are concerned, the tax cut extensions will keep the low capital gain tax rate and low dividend tax rate.  So, as far as capital gains are concerned there are no new taxes but the estimated income loss for the government is $600B-$800B. Analysts polled said that the tax extensions will help make the recovery more speedy and easier to gain ground.

European Crisis Update
Hungary has, as of Monday, been added to the list of European countries that are in trouble.  Moody's double downgraded Hungary's debt ratings saying that the leadership is taking no active steps to reducing its blooming debt.  The EU faces yet another issue that could prove to be have a similar solution that transpired with Ireland and Greece.  The Euro lost gains that were posted last week.

Trades:  Stick with the trades advised in "Playing the European Crisis" and "Boosting Returns Using Dividends".