The non-partisan Tax Foundation today said that the government spends so much money, “Federal income tax rates would have to be nearly tripled across the income spectrum if Congress were to close the deficit in fiscal year 2010. Instead of taxing joint filers with rates ranging from 10 percent to 35 percent, tax rates would have to start at 27.2 percent and reach up to 95.2 percent.” more

Hedge funds, according to Morningstar, are getting their groove back. The Morningstar 1000 Hedge Fund Index climbed 7.4 percent in the third quarter and 17.2 percent through the first ning months of 2009. Of course, hedge funds haven’t regained their October 2007 peaks. Morningstar 1000 Hedge Fund Index declined 25.2 percent through February 2009 and has recovered only 20 percent in the last seven months, with 11.4 percent to go, Morningstar says. more

No surprise in this news from Barron’s this past Saturday: “Investors angry with their brokers are starting to get even. Or at least trying to.” The story notes that securities-arbitration claims are up 65 percent in the first eight months of 2009 compared to the same period a year ago. Dispute resolutions should surpass 2004’s levels, the paper says. Investors are winning more (45 percent of the time) and, in cases below $1 million, winning about half the amount they seek.

We’ve written about arbitration over the years, concluding that it is no longer so cheap or so fast as it used to be. Some wonder if it is even fair to clients. Congress, in a current bill, would substantially increase government and private lawsuits against advisors. The bill offers to pay bounties to whistleblowers up to 30 percent of the monetary payments by defendants. The bill would also prohibit mandatory arbitration clauses in customer contracts. It’ll be interesting to see how the Investor Protection Act of 2009 turns out.

I now have seen it all: Congress is proposing a tax deduction for pet owners. At first I thought it was a joke, a spoof, really, of our current system of special interests. But, apparently, it is not a joke. It is called H.R.3501 - Humanity and Pets Partnered Through the Years Act and it is being sponsored by Rep. Thaddeus McCotter (R-MI) and co-sponsored by Rep. Steve Cohen (D-TN) and Rep. Jared Polis (D, CO).

According to opencongress.com, the bill was introduced on July 31. The website sums it up thus: “Humanity and Pets Partnered Through the Years (HAPPY) Act amends the Internal Revenue Code to allow a tax deduction, up to $3,500 per year, for pet care expenses (including veterinary care).” more

According to the nonpartisan Tax Foundation, H.R. 3200, the health care reform bill that cleared the House Ways and Means Committee, would “push income redistribution to$1.4 trillion.”

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Goldman surprised investors, earning $3.19 billion in the third quarter, “powered by strong trading and gains on its own corporate investments” as the New York Times put it. But Rochdale Analyst Richard Bove struck a more skeptical tone on the earnigns report–although he does have “buy” on the stock, saying business in 2010 will likely improve. In a research note this morning, Bove wrote, “On an operating basis, Goldman did not have a good quarter. Its investment banking business fell by 38% sequentially and 31% year-over-year. All parts of of the business, financial advisory (down 12% sequentially and 47% YOY), equity underwriting (down 51% and 24% YOY, and debt underwriting (down 37% and 45%).”

He reckons that business in all three business categories will show “much higher levels of activity” in the fourth quarter and 2010.

We just got through posting a “>story on our website about how the global economy is probably not so healthy, that China’s economic health is illusory. But the Great Goldman Sachs begs to differ, says worldwide recovery is in full swing, that companies are healthy now (i.e. have more cash), among other positive things. And, according to Bloomberg, “Banks, brokerages and investment firms are the most likely to see M&A increases, says Goldman’s analysts.”

The Washington Times notes today that federal officicals seem to send in the SWAT teams for just about any wrongdoing, no matter how unintentional or petty the “crime.”

The paper says: the retirees “Kathy and George Norris lived under the specter of a covert government investigation for almost six months before the government unsealed a secret indictment and revealed why [the government] had treated their family home as if it were a training base for suspected terrorists. Orchids.” And that six federal agents who plundered their home in search of evidence were “wearing SWAT gear and carrying weapons.” The FBI? Homeland Security? Nope. They “were with - get this- the U.S. Fish and Wildlife Service.”

SEC says it informed the Fed and Treasury of the bonuses as early as Dec. 17. This directly contradicts Paulson and Bernanke’s oral and written testimony.

The Oversight and Government Reform Committee committee’s top Republican, Rep. Darrell Issa (R-Calif.), is demanding an explanation from Mr. Bernanke and Mr. Paulson.

“It is now apparent that you knew, or at least should have known, about the bonus payments to Merrill Lynch employees no later than December 18, 2008,” Issa said in letters sent last week to Mr. Paulson and Mr. Bernanke.

Bob McCann and BofA are pleased to announce that they have resolved the lawsuit Mr. McCann filed on August 24, 2009. Free to join UBS now?