CORRECTION: This morning I noticed an error in my reporting of the Federal Excise Tax collections in January. The error was borderline material relative to excise taxes. The annual growth rate was positive, and at the same rate as in December, but not at the rate I originally reported. The original chart as posted was correct. Therefore, the graphical representation that you saw yesterday was accurate. I have revised the second paragraph of the intro summary, and the discussion of excise taxes to reflect the corrected data. This correction did not change the analysis or my conclusion.
The Federal tax collection data for January makes you wonder.
Why did the Fed panic?
True, withholding tax collections collapsed, thanks to the government shutdown. And that revenue collapse, while temporary, has ramifications in terms of causing an unusually large bulge in new supply this month that will be problematic for the stock and bond markets. If it isn’t, then we’ve moved into an alternate universe driven by fantasy, and leverage, that will come to a crashing halt one day soon.
But there’s another side to the tax data coin, and it tells a completely different story. This report covers the gory details in Technicolor charts and colorful language too!
Click here to download the report. (Liquidity Trader, legacy Federal Revenues Pro Trader subscribers)
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