Todd Harrison: The short sale of American icons

[Winehole23]

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A few years ago, Professor Peter A er of Minyanville offered, “As we enter the New Year, I’d recommend that folks review their investment holdings with the growing wave of populism in mind. I anticipate that the phrase, “For those to whom much has been given, much is expected,” will take on new meaning.” (Also read The Robin Hood Economy.)

Who would have thought that in the following years, financial services, health care, and energy would all be considered “evil”? From the bulls-eye on the back of “fat cat” bankers to tough talk on the beltway—remember when the White House vowed to keep a “boot on the neck of BP (NYSE:BP)?”—it’s hard not to notice the path of the wrath.

We long ago warned of the “tricky trifecta” of societal acrimony, social unrest, and geopolitical conflict. Between Occupy Wall Street, The Tea Party, riots in Greece, and the specter of yet another war in the Middle East—not to mention the seismic shift in the European Union—it’s safe to say that we’re migrating across this most unfortunate spectrum.

At what point does an industrialist become a robber baron? Or a savvy speculator a profiteer? At what point does success become privilege? The answers to these questions have profound implications for the future of free-market capitalism in an intertwined finance-based global economy. And if calmer heads don’t prevail, the bottom line might be the least of our concerns.

One of the great misperceptions in financial market history is that the Crash of 1929 caused The Great Depression when The Great Depression actually caused the Crash. While public psychology can be manipulated for extended periods of time, free will can never be caged and the attendant social mood will shape behavioral patterns—and by extension our financial decision-making processes.

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[TeyshaBlue]

Alot of correlative stuff....I'm not completely sold on the notion that angst/euphoria can be considered a fundamental driver of market $ +/-. There's no denying the emotional factor in trading and speculating, but I think the aggregate effects are smaller than what the author presents.

of course, I'm probably wrong.

[Winehole23]

[TeyshaBlue]

shu'p you or I'll use the essay generator!

[Winehole23]

The taxes paid on dividends and capital gains are artificially low today, having been slashed to only 15% in 2003 by President George W. Bush from a rate as high as 39.6%, the top ordinary income tax rate, prior to that. There is an argument – made by Wynn, among others – that if the government raises that level or allows it to move higher automatically on January 1 as part of the fiscal cliff package, then companies won’t pay out as much in dividends and governments therefore won’t collect as much in tax revenue.

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