We hope you had a Merry Christmas.  This Thursday President Obama and Congress return to Washington to continue negotiations regarding the “fiscal cliff”.  As the deadline draws near, our first article suggests two possible approaches they may take.  Next, we take a look at some economic developments Jeffrey Gundlach expects for 2013. Gundlach runs the Doubleline Total Return Fund, in which we invest.  We then turn to a reminder about the Alternative Minimum Tax. While many have focused on Congress and the “fiscal cliff”, our legislators have yet to increase the exemption for this tax, generally referred to as the ATM “patch”.  This is usually passed each year during December, but will Congress pass it this year?  Finally, we wrap up with some good news regarding the continuing recovery of housing prices in the U.S. It looks as if the real estate market may bolster the U.S. economy for the first time in seven years.

Obama, Congress Set For One Last Effort On “Fiscal Cliff” – We are still in limbo regarding what Congress and the President will do about the “fiscal cliff”.  They will be back in Washington this Thursday to continue negotiations.  This article in Reuters discusses two possibilities:  (1) A modest, last minute measure to avoid the spending cuts and most tax increases, and (2) do nothing before December 31 and let taxes go up on everyone as now scheduled. Then, during the first of January, implement a deal to cut taxes and reduce automatic spending cuts. http://www.reuters.com/article/2012/12/26/us-usa-fiscal-return-idUSBRE8BP06N20121226

Gundlach’s Thoughts On The Market For 2013 – Jeffrey Gundlach manages the Doubleline Total Return Fund in which we invest.  This article summarizes his views toward the market and what developments we may expect in 2013. http://advisorperspectives.com/newsletters12/Gundlachs_High-Conviction_Investment_Idea.php

Alternative Minimum Tax – Congress has not yet passed the usual annual “patch” for the Alternative Minimum Tax.  In 2011, the exemption for a married couple filing jointly or for a surviving spouse was $74,450.  Under current law, the exemption for 2012 is $45,000 unless Congress passes a bill to increase it.   http://www.reuters.com/article/2012/12/20/usa-tax-amt-idUSL1E8NJH0Z20121220

Home Price Gains Pick Up As U.S. Real Estate Market Rebounds – Just released today is a report showing that property values increased 4.3% in 20 cities since October of last year.  This is the largest increase in more than two years as the real estate market rebounds and contributes to the U.S. economic recovery. http://www.bloomberg.com/news/2012-12-26/home-price-gains-accelerate-as-u-s-real-estate-market-rebounds.html

We hope you enjoy reading these articles along with us and that you find them informative.  Please forward this to your friends and family.

John R. Day and Bill Ennis


Disclosure – The articles mentioned in Mid Week with Day & Ennis are for information and educational purposes only. They represent a sample of the numerous articles that the firm reads each week to stay current on financial and economic topics. The articles are linked to websites separate from the Day & Ennis website. The opinions expressed in these articles are the opinions of the author and not Day & Ennis. This is not an offer to buy or sell any security. Day & Ennis is under no obligation to update any of the information in these articles. We cannot attest to the accuracy of the data in the articles.