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Fact
The most famous U.S. tax protest is still the Boston Tea Party. In December 1773, colonists dumped 342 chests of tea into the Boston Harbor to protest the Tea Act. Their unforgettable argument: no “taxation without representation.” Protesters threw more than 92,000 pounds of tea into Boston Harbor!
The Markets

We’re off to a good start.

Investors who remained steady during December’s wild ride are probably pleased with their decision as stocks have gotten off to a strong start in 2019. Unfortunately, those who reduced their exposure to the asset class may be feeling the sting of missed opportunity.

Last week, the Dow Jones Industrial Average gained about 3 percent. The Index is up 5.9 percent year-to-date, which is its best start in more than a decade, according to Ben Levisohn of Barron’s . The Standard & Poor’s 500 Index (S&P 500) and NASDAQ Composite also moved higher last week.

Barron’s reported investors were encouraged by positive news about trade talks between the United States and China, as well as stronger-than-expected fourth quarter earnings. Eleven percent of S&P 500 companies have reported so far and, altogether, their earnings have beaten expectations by 3.2 percent, according to FactSet . (Quarterly earnings indicate how profitable a company was during the period being reported.)

The FTSE All-World Index also moved higher last week. It is up almost 8.5 percent for the year.
Richard Henderson, Emma Dunkley, and Robin Wigglesworth of Financial Times offered the opinion investors could have been overly pessimistic during December, and their change in attitude might be attributed to a more dovish tone at the U.S. Federal Reserve, as well as evidence the U.S. economy remains strong.

While investor confidence appears to be strengthening, consumer confidence wavered. The University of Michigan Survey of Consumers showed consumer confidence was lower in January 2019 than it was in January 2018. The Survey’s Chief Economist Richard Curtin wrote, “The loss was due to a host of issues including the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown, and the lack of clarity about monetary policies.”

HOW MUCH WOULD THOSE BURGERS COST IN BRITAIN?

Purchasing power parity, or PPP, is a straightforward idea with a tongue twister of a name. When two countries have PPP, people pay the same amount for the same goods, after adjusting for the exchange rate. For example, if one British pound is worth 50 U.S. cents, then an item that costs one British pound in the United Kingdom should cost 50 cents in the United States.

The Economist developed ‘The Big Mac Index’ to measure burger parity. It’s an engaging way to look at local prices and exchange rates. The index measures the price of the seven-ingredient, double-decker burger in different countries and offers a rough estimate of whether a country’s currency is overvalued or undervalued relative to the U.S. dollar.

In January 2019, the index served up the news that almost every currency, in developed and emerging economies, is undervalued relative to the U.S. dollar. The only countries with currencies that appear to be overvalued are Switzerland, Norway, and Sweden.

So, how undervalued are other countries’ currencies?

·          The Canadian dollar is 8.9 percent undervalued
·          The European Union’s euro is 16.8 percent undervalued
·          The British pound is 27 percent undervalued
·          The Chinese yuan is 45.3 percent undervalued
·          The Russian ruble is 70.4 percent undervalued
           
The Economist explained, “It is not unusual for emerging-market currencies to look weak in our index. But, today the dollar towers over rich and poor alike. The pound, for example, looked reasonably priced five years ago. Today, Americans visiting Britain will find that [burgers] are 27 percent cheaper than at home.”

The U.S. dollar is stronger than usual because higher interest rates and tax cuts made American assets more attractive to investors than other assets in 2018, reported The Economist .

A strong dollar is a boon to travelers, who get more for their money in other countries. It also can make imports from other countries more attractive price-wise. There are disadvantages to a strong dollar, too. For example, it makes the United States a more expensive destination for travelers from other countries, which could discourage tourism. In addition, a strong dollar makes exports more expensive and that could make U.S. goods less competitive in overseas markets.

Weekly Focus – Think About It

“Wealth begins in a tight roof that keeps the rain and wind out; in a good pump that yields you plenty of sweet water; in two suits of clothes, so to change your dress when you are wet; in dry sticks to burn; in a good double-wick lamp; and three meals; in a horse, or a locomotive, to cross the land; in a boat to cross the sea; in tools to work with; in books to read; and so, in giving, on all sides, by tools and auxiliaries, the greatest possible extension to our powers, as if it added feet, and hands, and eyes, and blood, length to the day, and knowledge, and good-will.”
--Ralph Waldo Emerson, American writer


It is that time of year....TAX season is upon us!!! Here are some random facts about taxes that may leave you asking a simple question....WHY?

  • There is no known civilization on the planet that did not tax the population. Even the very first known civilization, the Sumerians, recorded their tax history on clay cones.

  • A majority of all ancient documents are tax records!

  • In 1913, the federal tax code was 400 pages. It was 70,000 pages in 2010.

  • Americans spend over $27.7 billion every year doing their taxes.

  • WWII is what led to the creation of the Bureau of Internal Revenue, which later became the Internal Revenue Service (IRS).

  • Above the entrance of the IRS building in Washington D.C. is a quote by Oliver Wendell Holmes: “Taxes are what we pay for a civilized society.”

  • Ireland, Denmark, and other EU nations have started to tax cattle owners on cow flatulence. The tax is $18 per cow in Ireland and $110 per cow in Denmark. They hope to curb greenhouse gases, of which cows are responsible for 18%

  • England has a tax on TVs. Color TVs are taxed more than black-and-white TVs. Also, if a blind person has a television, they only pay half the tax.

  • The number of words in Atlas Shrugged is 645,000. The Bible has roughly 700,000 words. The Federal Tax Code has 3.7 million.


January Fun Facts!
Although March was originally the first month in the old Roman Calendar, January assumed that position beginning in 153 BC when the two consuls, for whom the years were named, began to be chosen on January 1. The reason for this shift of the new year into the dead of winter was to allow the new consuls to complete the elections and ceremonies upon becoming consuls, and still reach their respective consular armies by the start of the campaigning.
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Sources:
13.https://socotax.com/20-random-facts-taxes/

The Markets:
[1] https://www.nytimes.com/2002/11/05/health/a-conversation-with-daniel-kahneman-on-profit-loss-and-the-mysteries-of-the-mind.html?pagewanted=all&src=pm&module=inline 
[2] https://www.schwab.com/active-trader/insights/content/7-tips-weathering-bear-market
[3] https://www.cnbc.com/2018/12/26/us-futures-following-christmas-eve-plunge.html
[4] https://www.marketwatch.com/story/stock-market-ends-wild-week-in-negative-territory-as-dow-sp-500-set-for-worst-december-since-1931-2018-12-28
[5] https://jamesclear.com/habit-stacking
[6] http://blogs.umb.edu/quoteunquote/2012/05/08/its-a-much-more-effective-quotation-to-attribute-it-to-aristotle-rather-than-to-will-durant/