Morgan Stanley’s equity team says that it is too early to purchase stocks. It feels that the risks remain too numerous to ride the recent uptrend in stocks. The 1994 and 2004 recoveries suffered through several quarters of range-bound and lower prices. Both years, the market stumbled as investors tried to digest the beginning of the Fed’s tightening. Morgan Stanley believes that the global tightening phase has already started.
Greece holds the record for the developed world’s most crooked economy. Even Germany and Scandinavian countries have huge shadow economies. But only a small portion of EU shadow economies are linked to crime. Most EU black-market workers quickly recycle their earnings into consumption in the official economy, where they generate taxes again.
Last year, transfer payments from the government such as unemployment checks and Social Security burgeoned by $231 billion to $2.10 trillion. Meanwhile, the amount of taxes that individual Americans paid plummeted by $325 billion to $2.10 trillion as a result of middle-class tax cuts and because nearly 6 million people were thrown out of work and are no longer paying payroll taxes.