It’s hard to invest in pie when this is all you get
That is the question isn’t it…. how low can the DOW go, how high can unemployment get, how bad can this get?
My view on the stock market is that it isn’t anywhere near the bottom. Why? Well, because Obama and the Democrats promise to screw with the only performing sectors of the market, take more of the gains via income and capital gain taxes, spend more and more, force union labor in new sectors of the economy, and put a general brake on the economy via newly created carbon offset taxes.
One of the few performing sectors, healthcare and drug companies, still profitable, face a cloudy future of government confiscation of their businesses. Why invest in that?
So let’s say you find a sector of the economy that still performs, perhaps makers of food stamps and the people that make the ink in newly printed money. You make your play.
Well, along comes Uncle Obama saying… um, yeah, we want to raise the capital gains tax from 15% to 39%. So your big play just got worth 24% less.
The government takes most of your gains plus a general “what the hell else will they think of”, means why invest? That is the fundamental problem facing the market right now.
The underlying problem, they are human, and behave as such.
Right now, people with money just want to hide it. The looters are running amok.
March 6th, 2009 at 10:51 am
Nice writing. You are on my RSS reader now so I can read more from you down the road.
Allen Taylor
March 6th, 2009 at 8:10 pm
If your theory were right, we would have had no investment in 1951-1963 when top marginal income tax rate was 91% and max capital gains rate was 25%. Clearly, investment responds to many factors, not just tax rates, as people with money have to do something with it to earn a competitive return. 50% of a big income is much better than 100% of no income. Over the years since WW II, tax rates on various kinds of income have varied widely, but investment and income earning just kept happening anyway. One theory on taxes says to set some rate and leave it alone; then the system will adjust to it and find a profitable balance. But our system has just kept growing despite the ever changing tax structure. Whatever the tax rate, capitalism will find a way to succeed.
March 6th, 2009 at 8:33 pm
nice try, you miss all the opportunities to shelter income that are no longer present. Only idiots actually paid those rates.
March 6th, 2009 at 9:12 pm
Pie, pecan, commercial, 1/6 of 8″ pie, 113 gm
Sugar -36 gm
Fiber – 4 gm
Carbs – 64.6 gm
Protein – 4.5 gm
Fat – 20.9 gm
Food Total – 90 gm
kcal – 452
You’re left with dessert and no pie for a week, Bambi’s health plan!