Prices Should Fall This Tax Season
US taxpayers in April 2011 sent $140 billion to the US Treasury. While I have no idea how much taxes will be paid this April, I am pretty sure that billions of dollars in stocks still will be sold to pay taxes. That should keep pressure on stock prices the rest of this week, everything else being equal.
The biggest story today is that the financial markets were shocked, shocked that Friday’s jobs number was disappointing. After all, the Bureau of Labor Statistic had been guessing that an average of 250,000 new jobs were created each month, after seasonal adjustments, from December to February. Over that same time frame there appeared to be an improving trend in weekly new unemployment claims.
What I am most shocked about is that almost everyone on Wall Street seems to believe that the Bureau of Labor Statistics initial estimate of new jobs and unemployment claims are as accurate as if they were generated by a ticket taker counting admissions. The Wall Street Journal, the New York Times, the talking heads on CNBC, other than Rick Santuli, all did not voice any reservations what so ever about the quality of the BLS number. Not one report stated that the initial BLS job number often gets revised dramatically up and down before getting finalized years later when the income tax returns are totaled up. (Full reading here).