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Clearly, Not Everyone Is Getting Rich Off The Stock Market

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Well, the NY Fed was out today with its Quarterly Report on Household Debt and Credit for Q4 2017. Clearly, Americans are in a lot of debt. Take a look.


Just a couple of quick hits from the report. Total U.S. household debt rose $193 billion in the 4th quarter, to a new all-time peak of $13.15 trillion. That's 17.9% above the most recent trough in Q2 2013. Broken down by segment, what do you suppose was the largest gain in percentage terms? Credit cards, with a 3.2% increase. In the picture above, the widening gap represented by the red arrows reflects the fact that non-housing debt is rising at a faster pace than housing debt.

Here's what's troubling about that. Below is a picture of the stock market, as represented by the S&P 500 index, over that same period; from the most recent credit trough in Q2 2013 to the end of 2017.


And thus, the title of this article. Over that period, the S&P 500 index rose by 75%; from roughly 1,600 to 2,800. Apparently, however, the r…

Apple Trump'd

For today, just three quick pictures.

First, from Apple's latest 10-K.


As shown above, as of the most recent quarterly report, Apple's cash hoard is a whopping $237 billion. But notice the highlighted phrase in the bottom paragraph. Of that amount, some $216 billion is held offshore, outside the borders of the U.S.

The trouble is, to bring that cash back home, Apple would have to pay the U.S. corporate tax rate of 35% on those funds. I'll do the math for you. That's $75.6 billion. To this point, Apple has politely turned down that "offer," preferring to use low-interest-rate debt to return cash to shareholders in the form of dividends and buybacks.

As of yesterday, enter Donald J. Trump.

Take a look at this, from the tax plan announced on his campaign website.



That's right, Trump is proposing a one-time tax rate of 10% for the repatriation of U.S. corporate profits held offshore. Should this come to pass, Apple could bring that $216 billion back to the U.S. and only pay $21.6 billion in taxes, a $54 billion tax savings.

How much cash is that? For some perspective, check out this final picture, from a recent article on forbes.com.


That vertical red line sits at approximately the $54 billion mark. Let me summarize that quickly for you. As of the date that article was written, only four other tech companies had as much in total cash as the amount of the tax break Apple would get for repatriating their foreign cash under the Trump tax plan.

Cheers!




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