Peter C. Karp Karp Capital Management October 24, 2012. SIR's Area 2 $ums Investment Group “Turning on a Dime”. 1. Agenda. Global growth is slowing European debt problems Are we experiencing inflation or deflation? Strong Dollar The fear of the future problem of the U.S. Treasury debt
Karp Capital Management
October 24, 2012
SIR's Area 2 $ums Investment Group
“Turning on a Dime”
….Cast Clouds Over The Market
Disappearance of AAA Insurance
Property Tax Declines
State Aid Cuts
Jefferson County, AL
Majorities in the House and Senate will be very small regardless of who wins control in each chamber
Could result in a 3%-5% drag on GDP
Scheduled tax hikes and spending cuts = up to $606 billion
Could cause a 20% to 30% decline in corporate profits
Bush-era tax cut expiration $221 billion
Could drive unemployment
up to 9 percent
Payroll tax relief & extended unemployment insurance $121b
Other changes $116b
But, continuing on current path, could result in debt reaching 90% of GDP by 2022…
Budget sequester $65b
Tax extenders $65b
Healthcare reform taxes $18b
Sources: Congressional Budget Office/Fidelity and other economists.
* Includes 3.8% tax on unearned income from the federal healthcare law and reinstatement of the personal exemption and itemized deduction phase outs.
President proposes FY 2014 budget
“Lame Duck” session of Congress
Fiscal year 2013 begins
New Administration & Congress
Debt ceiling reached
Since December 2007, investors have favored fixed–income securities, plowing over 1.1 trillion of net flows into bond mutual funds and ETFs while equity funds have only received around $33 billion..
…suggest decent return expectations.
…Only Low Yields and Low Diversification
…Introduce Non-Traditional Asset Classes
Peter C. Karp
Karp Capital Management
San Francisco, CA
Tel: (415) 345-8185 1-877-900-KARP
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