Have “Unreimbursed Business Expenses?”, Ask For A Raise Immediately

Posted by & filed under Financial Planning, Tax Advisory.

Small Business Men shaking Hands

Guest Post by Chris, Whalen, CPA

Many employees pay for business related expenses that their employer does NOT reimburse. These are called Unreimbursed Business Expenses and they are taken as a deduction on Schedule A, Itemized Deductions, using Form 2106.

Here is a general list of Unreimbursed Business Expenses

Business bad debt of an employee.
Business liability insurance premiums.
Damages paid to a former employer for breach of an employment contract.
Depreciation on a computer your employer requires you to use in your work.
Dues to a chamber of commerce if membership helps you do your job.
Dues to professional societies.
Educator expenses.
Home office or part of your home used regularly and exclusively in your work.
Job search expenses in your present occupation.
Laboratory breakage fees.
Legal fees related to your job.
Licenses and regulatory fees.
Malpractice insurance premiums.
Medical examinations required by an employer.
Occupational taxes.
Passport for a business trip.
Repayment of an income aid payment received under an employer’s plan.
Research expenses of a college professor.
Rural mail carriers’ vehicle expenses.
Subscriptions to professional journals and trade magazines related to your work.
Tools and supplies used in your work.
Travel, transportation, meals, entertainment, gifts, and local lodging related to your work.
Union dues and expenses.
Work clothes and uniforms if required and not suitable for everyday use.
Work-related education.

For example, many employees use their car for business purposes, but they are not reimbursed by their employer. Many employees also maintain home offices, and have many other varied expenses: Postage, office, supplies, internet, cell phone, etc.

The Trump Tax Plan, starting in 2018, will ELIMINATE these deductions for employees, thus dramatically increasing taxable income for them.

How does this work? Simple. Let’s say you are a salesperson earning a salary of $100,000. This salesperson must pay for their own expenses such as automobile. In our example this salesperson travels 20,000 per year for business. Under the current law, that mileage could bring approximately $11,000 in tax deductions, thus reducing taxable income to $89,000.

Now, that deduction is eliminated and so that salesperson now pays tax on the full $100,000. This is a tremendous tax increase! At an effective tax rate of 30%, that means a tax increase of $3,300!

If this salesperson’s gross salary does NOT increase, they will be taking a huge cut in pay in the form of higher taxes.

That is why, if you have formerly had Unreimbursed Business Expenses, you need to demand a raise in your salary enough to make you whole from an after-tax perspective. These calculations can be difficult, but that is why we are here.

If you fear this situation applies to you, please reach out to me so I can help you calculate how this will impact your specific tax situation, and to develop a strategy to approach your employer to ask for that raise.

If your request for a raise falls on deaf ears, it may be time for you to form your own company and become a subcontractor.

That way you can take all of your business related expenses against your gross income. Of course, we can guide you through the entire company formation and registration process.

Before you move forward with any financial transaction, or attempt to create a new company on your own contact Chris Whalen, CPA, The Investment Advisor, Your CPA, Accountant, Attorney and Your Financial or Investment Advisor.

This article was written by Chris Whalen CPA. As a CPA his views come from a tax and accounting perspective. The Investment Advisor is a Registered Investment Advisory Firm. The Investment Advisor does not offer tax, accounting or legal advice.

The information presented is meant to be informational only. It does not constitute a recommendation. Investment and Financial Planning recommendations can only be made in consultation with each client individually after each client has discussed their situation with The Investment Advisor. Before making any investment, financial or legal decision you should always consult your Accountant, CPA, Attorney and Financial or Investment Advisor.

For Further questions about the information contained in this article contact Chris Whalen, CPA or The Investment Advisor. The Investment Advisor can be contacted on its website at http://www.theinvestmentadvisor.net/request-consultation.html or by calling (877) 414-9021.

Chris Whalen can be contacted at the website of Chris Whalen, CPA at http://www.chriswhalencpa.com/contact/ or by calling (732) 673-0510

Creation of an Online, Life Science, Biotechnology Platform

Posted by & filed under Biotechnology, HealthCare.

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The Investment Advisor is Proud to Announce in Collaboration with Biotech Science News the Creation of an Online, Life Science, Biotechnology Platform Which Will Feature the Public Presentations of ‘’Peer’’ evaluated research presented at Life Science Meetings–.

The Platform Will Create a real-time, on-line Central Depository for Viewing of the Presentations for the Purpose of Public Access in a Safe, Secure, Online Venue. These Presentations Will be Ranked By the other researchers Attending These Events.

If You are a Researcher, Doctor, Venture Capital Firm, Angel Investor, Economic Development Organization, State or Local Government, Physician, Pharmaceutical or Medical Device Company You Can See the Value of Creating a Central Public Depository for These Very Important Works.

For more Information Please Contact The Investment Advisor at http://www.theinvestmentadvisor.net/request-consultation.html

Or Call (877) 414-9021

 

#Capital #FundRaising #Medical, #Medical Research, #MedicalCure #Cure #HealthCare, #ClinicalCare, #ResearchUniversity  #VentureCapital #PrivateEquity #CrowdFunding

 

What Entity Type Is Best When Seeking Venture Capital?

Posted by & filed under Biotechnology, Financial Planning, HealthCare, Tax Advisory.

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Guest Article By Chris Whalen, CPA:

Starting a business is extremely complex, and it is very easy to make mistakes that can incur tax penalties and also hurt your chances for acquiring financing.

Let’s say you were starting a company and needed to raise capital. You have to decide what entity to create.

What are your choices? The basic entity types are: Partnership, S Corporation, or C Corporation. LLC was not excluded by accident. Remember, for IRS purposes, the LLC does not exist as an entity, and the owners of an LLC have to choose between a Sole Proprietorship, Partnership or S Corporation as their filing status.

99% of the time, when seeking venture capital, The C Corporation is the logical and practical choice, and most Venture Capital firms will demand this.

Will an S Corporation Work?

No. While the S Corporation structure is a popular choice for entrepreneurs and other small businesses, it comes with regulatory limitations that do not make it a feasible vehicle for raising venture capital. The three main regulatory limitations are:

S Corporations may only have one class of stock;

S Corporation stockholders must be natural persons (except for some extremely limited circumstances); and

The one class of stock requirement may be fatal to a venture capital investment since venture capital firms usually demand preferred stock in return for their investment. Also, most venture capital firms are organized as limited partnerships and less frequently as LLCs–but both legal entity types aren’t “natural persons.” And finally, as your startup grows, the 100 stockholder maximum comes into play once your startup begins issuing stock and stock options to employees.

Thus, the C Corporation may be the only type of corporation viable for a venture capital investment.

Why not an LLC?

While the LLC is also a common startup vehicle, the C Corporation wins hands down when it comes to raising venture capital. The following 4 reasons explain why:

1. Pass Through Entity

While the pass through feature (income/losses are passed down to the shareholders rather than dealt with at the entity level) of LLCs are desirable to most entrepreneurs, venture capital funds do not find pass through taxation to be a similarly desirable feature. The venture capital firm does not want the accounting and tax matters of a funded venture to be passed down to the firm, and thereby be attributed to the venture capital firm’s tax exempt and foreign limited partners. Such a scenario could create unrelated business taxable income (UBTI) issues or have their foreign investors be deemed “doing business” in the United States and thus have to file a U.S. tax return.

2. Transferability

The membership interests of an LLC are typically not freely transferable by state statute. This makes the LLC a lousy entity for one of venture capital’s exit strategies: the IPO. (Not that IPOs for venture backed companies are hot at the moment.)

3. Predictability

Started in the late 1980s and only made more popular in the last decade or so, LLCs are a relatively new type of legal entity. Thus, there just isn’t a well developed set of laws and regulations for LLCs. Corporations, on the other hand, provide a larger degree of predictability with regards to corporate governance and stockholder rights.

4. The Venture Capital Firm’s Organizational Documents

Primarily due to the reasons outlined above, many venture capital funds will have specific provisions in their own organizational documents that prohibit them from making a venture capital investment in an LLC, or any other legal structure than a C Corporation. Thus, if your startup is absolutely against being a C Corporation, you could be declined by the venture capital firm regardless of how spectacular your startup is.

The Conclusion

The C Corporation is a venture capital firm’s clear-cut choice for the type of entity in which to place their investment. When the to-be-venture-funded startup is a C Corporation, various administrative and other burdens are minimized for the venture capital firm, which allows them (and their capital) to focus on developing the startup company’s business.

Starting a business is extremely complex, and it is very easy to make mistakes that can incur tax penalties and also hurt your chances for acquiring financing.

 

Before you move forward with any financial transaction, or attempt to create a new company on your own contact Chris Whalen, CPA, The Investment Advisor, Your CPA, Accountant, Attorney and Your Financial or Investment Advisor.

This article was written by Chris Whalen CPA. As a CPA his views come from a tax and accounting perspective. The Investment Advisor is a Registered Investment Advisory Firm. The Investment Advisor does not offer tax, accounting or legal advice.

The information presented is meant to be informational only. It does not constitute a recommendation. Investment and Financial Planning recommendations can only be made in consultation with each client individually after each client has discussed their situation with The Investment Advisor. Before making any investment, financial or legal decision you should always consult your Accountant, CPA, Attorney and Financial or Investment Advisor.

For Further questions about the information contained in this article contact Chris Whalen, CPA or The Investment Advisor. The Investment Advisor can be contacted on its website at  http://www.theinvestmentadvisor.net/request-consultation.html or by calling (877) 414-9021.

Chris Whalen can be contacted at the website of Chris Whalen, CPA at  http://www.chriswhalencpa.com/contact/ or by calling (732) 673-0510

 

You are a Physician

Posted by & filed under HealthCare.

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You are a Physician. Your Smart, You Work Hard, You Work Long Hours and You Help People.

But, When it Comes to Your Financial Position You Haven’t Spent Much Time on it.

Because You are Busy.

Your Concerned About Growing Your Income and Your Net Worth.

For Retirement,

to Buy the Home You Have Always Wanted, or Pay for the One You Have,

to Make Sure Your Kids Go to a Good School Without Debt.

As a Firm, The Investment Advisor LLC Understands the Planning and Investment Needs of Physicians Like You.

The Investment Advisor is a Small Boutique Registered Investment Advisory Firm Dedicated to Helping You Improve Your Life. We Never Hold Your Money. We Help You Decide the Best Place for it. We provide the Advice and Recommendations to Help You Succeed. We Put Your Interests Front and Center Above Our Own Because We Work for You. No One Else.

The Firm Understands Health Care and Can Help Improve Your Life by Integrating the Accounting, Legal and Investment Advice You Need into Your Financial Picture.

And Help You Obtain it.

To Grow Your Net Worth, To Create Income

So, You and Your Family Achieve What You Want and Help You Protect What You Have Built.

You Know Medicine, We Know Finance.

We Will Handle and Improve the Financial Part of Your Life So You Can Devote Your Time to What Matters Most to You.

Helping People and Spending Time With Your Family.

So, Schedule an Appointment to Speak With Us,

Let Us Know You’re Interested at http://www.theinvestmentadvisor.net/request-consultation.html

Better Yet, Call Us at (412) 388-0500 or (570) 815-0770

Or Toll Free at (877) 414-9021

#Physician #HealthCare #Dr. #Doctor, #MD, #PrivatePractice #Hospital #Clinical #ResearchPhysician

Building a New Foundation-The Fiduciary Rule

Posted by & filed under Legislation and Regulation Affecting Investments.

Affluent Family Small 2

It started with Dodd-Frank. The legislative response to the Financial Crises. The battle cry of never again has touched every corner of the financial and investment industry. Banks, mortgages, credit cards, investments, retirement plans and loans have all been reregulated. Banks are now required to keep higher capital requirements as a result of the expanded oversight by U.S Government Agencies and Basel III. Proprietary trading with depositors money is coming to an end at investment and commercial banks. Consumer credit cards and loans are regulated by the agencies they should be regulated by such as: the Federal Reserve, the Office of the Comptroller of the Currency, the U.S. Treasury and the expanded oversight of the Consumer Finance Protection Bureau. Not to mention, the adoption by state goverments of laws which embody these principles.

In many respects, the financial and regulatory landscape looks similar to the early 70’s prior to the deregulation of brokerage commissions, the creation of the 401(k) and the IRA. Beyond Dodd Frank, Rule 408(b)(2) created by the Employee Benefits Security Administration (an agency of the Department of Labor)  in 2012 cast the die because, it requires the fees charged in complex retirement plans such as a 401(k) be “reasonable”. It also requires, any plan expense or plan asset such as revenue sharing with Plan Sponsors (Employers) or Expenses (Fees) that are necessary to operate and maintain a retirement plan be looked at through the lens of what is in the best interest of employees and their beneficiaries. It applies this test to just about every party required to operationally run a 401(k). These parties are known as Covered Service Providers.  As a result of the rule, Plan Sponsors and Covered Service Providers are now Fiduciaries to Retirement Plans.

Dodd-Frank is the legislative basis under which our financial system and infrastructure governing saving, investing and lending became subject to expanded oversight. This involves the rules and regulations of just about every federal agency and Government Sponsored Enterprise regulating financial activity from: the SEC, to the Department of Labor, Housing and Urban Development, the U.S Treasury and the Federal Reserve. You can add dozens of agencies to the list.

Rule 408(b)(2) spawned a new body of law about Retirement Plan Fees.  Governed by ERISA, created and regulated by the Employee Benefits Security Administration, the cases that were subsequently litigated as a result went as high as the Supreme Court. The concept of the lowest cost investment is what prevailed in courts across the land and the principles of 408(b)(2) have been upheld.

With the release of the new Conflict of Interest Fiduciary Rule, Retirement Plan regulation now extends down to the Individual Retirement Account. Fiduciary Responsibility, Ownership of Recommendations and the potential resulting liability for Investment Advice which is provided to anyone, in any type of retirement plan, is now the subject of these rules with a few exceptions.

Not since Ronald Reagan became President and ushered in an era of deregulation has such a profound paradigm change occurred. The pendulum has swung and the investment industry has nobody to thank but itself. Finding multiple ways to charge the same client became the hallmark of financial innovation. The investment industry relied on creating accounts subject to complex documents to create them, along with the complexity of the financial instruments used to fund them. When the value of these investments fell, so did the fortune of America.  Smoke and mirrors is a phrase for such activity.

The most profound failure of the baby boom generation may be that the Financial Crises and the economic malaise that has followed were created by a generation that outsmarted itself. A generation who thought everything could be run by a model, by the numbers, on autopilot without the need for a person with common sense to review decisions. Where clients were charged multiple times in multiple ways. Millennials take note, technology seems to be heading down the same path.

Investment Advisors and Financial Advisors were always “supposed” to have their clients best interest in mind. However, only Investment Advisers, those registered under the Investment Advisers Act of 1940, had a recognized legal fiduciary obligation to do so. Investment Advisers have always been required to put client interests ahead of their own. Not only for retirement plans but, for anybody an Investment Adviser does business with.

It is unfortunate this will spawn a new wave of litigation. Unfortunate, because many firms are entangled in a web of revenue streams that have been hidden from their clients and not properly disclosed. There is no such thing as a free lunch. Regardless of where the compensation comes from the client pays. When methods of a firms compensation are not properly disclosed it becomes difficult for a client to know what is being payed for the service being provided. It also becomes difficult to know which master the advisor serves. Litigation in the United States is the mechanism used to test laws and regulations. Judicial decisions and the resulting common law, created on a case by case basis refines the meaning and scope of the regulation.

It is well known fees eat into returns. The effect high fees can have over the long term can substantially reduce the value of assets that are saved for any purpose. High fees can reduce how much income a person who is saving for retirement can create, how long their retirement savings may last during retirement and consequently, how much they will have to live on.

The problem is regulation sometimes obscures the real issue which is the creation of wealth. Growing the GDP pie is really what is important. Without growth it all becomes a bit meaningless. You can only split the existing pie so many ways.  It is a good thing that people are protected. It’s a good thing professionals in the investment industry will be held accountable for their recommendations and actions. It’s a good thing fees have to be in line with the investment services being provided. It’s a good thing lower fees will subtract less from assets which are saved for retirement. It is not such a good thing compounded rates of return will be lower for those currently saving for retirement unless growth returns. More than 50% of all working age Americans are not prepared for retirement. People can’t adequately save and invest for retirement if they don’t make enough to do so. You can’t protect people if they are afraid of the markets or if they can’t make enough money to participate.

The Investment Advisor, LLC is a Registered Investment Adviser. As the Managing Principal, I can tell you The Investment Advisor stands ready to help you with your financial concerns as a Fiduciary. This means your interests are held above the interests of the firm. It means when The Investment Advisor helps you with saving and investing for your retirement, your health care, the education of your children, your home, your business, your income and your estate, what you see is what you get. You won’t be charged in a myriad of different of ways. There are no conflicts of interest. If one appears or is created you will be told about it. The Investment Advisor will do this with a person advising you, to help you achieve your goals and leverage technology to your best advantage.

The Investment Advisor Helps Companies, Self-Employed Individuals and Non-Profit Organizations Manage their Qualified Retirement Plans. The Investment Advisor Provides a Comprehensive Consulting Service with Respect to Defined Contribution Qualified Retirement Plans. The Investment Advisor Also Performs Feasibility Studies For Those Companies, Self Employed Individuals and Non-Profit Organizations Who Wish to Create or Evaluate Their Existing Qualified Defined Contribution Plan such as Their 401(k), 403(b), Profit Sharing Plan, KEOGH, SEP-IRA, SIMPLE-IRA or IRA Plan.

The Investment Advisor Also Helps Families, Individuals, Small and Mid-Size Companies, Trusts and Estates Manage Their Savings, Investments, Life Insurance, Health Insurance and Planning Concerns to Help Them Meet Their Financial Goals.

For a Complementary Review of Your Retirement Plan and Investment Portfolio Contact The Investment Advisor by Phone at  (570)815-0770 or (877)414-9021 or on the website of The Investment Advisor at http://www.theinvestmentadvisor.net/request-consultation.html

The Investment Advisor LLC is a Registered Investment Adviser registered in the state of Pennsylvania. Pennsylvania is the only state in which The Investment Advisor is currently registered to conduct business.

The Investment Advisor is unable to accept trade instructions by email. If you are client of The Investment Advisor and have trade instructions for your account please contact The Investment Advisor by phone at (570)815-007 or (877)414-9021.

This communication should not under any circumstance be construed as a recommendation for any security or any type of financial planning activity. Recommendations are only made in individual consultation with each client after the individual and unique circumstances of each client have been disclosed by the client to The Investment Advisor.

It’s About Creating Resources

Posted by & filed under HealthCare.

It’s About Creating Resources, Increasing Your Standard of Living and Preserving Your Way of Life. Navigating the Currents of Today’s World Requires Planning and Investment. The Video Above Put Out by the Cleveland Clinic Illustrates Your Holistic Need to Use Savings, Investment and Insurance as a Tool to Finance Protecting Your Health, Building Your Business, Move Forward in Your Career, Create Income for Your Retirement and the Achievement of the Milestones Which Occur in Your Life. Request a Consultation at http://www.theinvestmentadvisor.net/request-consultation.html 

Is the Markets Narrative Changing?

Posted by & filed under The Economy.

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Could Low Interest Rates and the Low Cost of Energy Propel the Markets Higher?

The current thesis that low energy prices creates a proxy and is indicative of poor GDP performance due to a lack of demand, manifested by the oversupply of energy, may initially create dislocation within certain industries. Namely, oil and gas companies, the companies and vendors that provide products and services to them and the banks that loaned money to them.

1% GDP Performance in the 4th quarter last year is not great.

The flip side of this argument is that if energy prices and interest rates stay low for any length of time, conditions could be ripe for markets to rise. Once the initial adjustment to lower energy prices resets the economy, low rates and low energy prices may provide the underpinning for economic growth, higher stock valuations and higher earnings per share.

In other words, low energy prices and low interest rates decrease costs and allow companies to competitively price their products and services, hire more people, increase wages and sell more increasing corporate sales and earnings resulting in higher stock valuations for those companies.

Core inflation (Ex Food and Energy) is at 2.2%. Above the Fed’s Benchmark Goal of 2%. While everyone worries about how the decline of oil and energy causes chaos for energy companies and deflates the economy, low energy costs lowered prices at the gas pump and at the supermarket. Low interest rates and low energy prices have historically been key drivers for the markets.

Combine this information with January’s rise in consumer spending and there may be a recipe here for a path forward for the markets.

Will this come to pass? Only if interest rates and energy prices stay low long enough to ignite the economy and we are willing to endure the pain of dislocation caused by the reset to propel the economy forward.

Certainly, other things can still happen to upset this apple cart. First, it’s an election year and depending how our elections shake out, the taxes that are levied and the budget that is created will have an effect. As will our deficit.

Second, further increases in interest rates by the Fed may cap growth.

While there seems to be a broad consensus for government spending more on health care and to help people fund their retirement, anything that helps consumers feel more secure so they spend more will be beneficial for the markets as consumer spending makes up 70% of the U.S. economy.

Geopolitical events are always a wild card and can disrupt any scenario. But, barring unforeseen shocks to the U.S. or global economy low energy costs and low interest rates are ultimately a good thing. Should rates rise which is anticipated to be the Fed’s desired route, the rise in rates will be a further vote of confidence in the economy by the Fed.

Remember, markets themselves are leading indicators of economic performance. The sudden correction, halt and reversal is telling us something. As is the volatility itself. Disruption to key areas of the economy such as energy and interest rates has this type of effect. It also creates opportunity.

If you have further questions or concerns Contact The Investment Advisor.

The Investment Advisor helps families, individuals, companies, retirement plans, trusts and estates manage assets held in their investment accounts.

For a complimentary review of your investments and the accounts you hold these assets in contact the Investment Advisor by Phone at 570-815-0770.

Or on the request consultation page on the website of The Investment Advisor at http://www.theinvestmentadvisor.net/request-consultation.html

Investing in Bonds-A Bond Primer

Posted by & filed under Portfolio Management.

Bonds Are an Integral Part of Our Economy and Your Investment Portfolio. Bonds Help Set Interest Rates and Rates on Mortgages, Credit Cards and Loans. When Used Properly Bonds Can be an Important Asset Class in Your Investment Portfolio. Bonds Have Also Been at the Center of Many Economic Issues. When Used Improperly Bonds Can Create Havoc in the Economy. This Presentation is Designed to Give You a Working Knowledge of What Bonds Are and How They Work.

With the Feds Increases in Interest Rates and the the Markets Rise it is More Important Than Ever to Understand Bonds and How They Impact Your Investment Portfolio.

The Presentation is a Few Years Old, But the Principles Remain the Same. It Will Also Serve as a Reminder About Where The Economy Came From and How Bonds Can be an Early Warning Indicator.

If You Have Further Questions or Would Like Help With Your Investment Portfolio Contact Louis Wolkenstein Managing Principal, The Investment Advisor LLC at (570)815-0770.

Was the Fed Forced to Go Wrong With Quantitative Easing?

Posted by & filed under The Economy.

Your Future Small

Did Congress force the Federal Reserve to go wrong with the bond-buying program known as quantitative easing? The cost of quantitative easing according to strategists such as Athanasios Vamvakidis at Bank of America could be the Federal Reserve’s unconventional monetary policy and its relationship with financial markets. He argues “excessive reliance on unconventional monetary policy” can create side effects, many of which are now being felt in markets.

During quantitative easing, markets started reacting positively to bad news. Bad news became good news for asset prices when markets expected additional QE by the Fed. Asset prices diverged from fundamentals. Markets traded the Fed instead of economic reality. This was not sustainable. Vamvakidis believes the market’s strong reaction to the Fed’s announcement in 2013, that it planned to “taper” was one sign that QE had already gone wrong.

The Fed “taper tantrum” could have been the first sign. The Second, could have been the emerging markets sell-off which started mid-2014. QE tapering was ending and the market started pricing Fed tightening, a sell off that deepened this year.

Vamvakidis doesn’t believe QE should have never happened. He realizes Fed policy helped the U.S. prevent another great depression that could have become a consequence of the financial crisis. But, he does not believe bond-buying should be the first choice when things go wrong in the economy. He calls QE “a necessity,” but is skeptical of the Fed’s subsequent rounds of QE2 and QE3. He notes, that despite the continued expansion of balance sheets at a number of central banks around the world, monetary policy conditions have tightened and liquidity has fallen.

What Vamvakidis does not mention is that the Fed was never meant to go it alone. One of arm of government can rarely solve the nation’s ills. A response on the fiscal side by Congress has been sorely lacking. It does not help that Congress brought the U.S. government to the brink of default more than once. The Fed Should not have been forced to create unconventional tools because congress could not agree on how to respond. Even now, congressional refusal to cross partisan lines and agree to a budget undermines further recovery.

We find ourselves in a situation where risk assets have sold off expecting the Fed to tighten. It is beginning to affect the real economy. The Fed is not tightening as a result. However, postponing Fed tightening does not necessarily increase demand for risk assets. This is a new paradigm where bad news is bad news. When combined with gridlock on the fiscal side, the path to an economy that operates on normal principals may not be smooth.