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Friday, November 18, 2011

 

It Could Happen

After 60 days of Occupy...Whatever, we still don't really have an intelligible explanation of what the protest is against, or what the protesters really want. A clearly sympathetic mainstream media has tried to spin their own interpretations of what they're against - income inequality, corporations, exporting of jobs, lack of accountability for the financial crisis, etc. To this outsider, it looks like an excuse for the non-working, the non-successful, the malcontents, the misguided, and the miseducated to go camping in the city, be a nuisance, live or relive the
60's (but without equivalent gravitas), promote socialism, and meet girls/guys. This week, the public had enough, and the police began clearing out the parks. So yesterday was "action day," and the result was more arrests, more embarrassment for the "movement supporters," and more public disgust.

We said early on that the longer this went on, the worse for Democrats and the Administration. We have seen nothing to change our opinion. In fact, despite the media slant, the latest polling shows opposition to the Occupy movement at high levels and growing. The public now realizes that this is not some benign demonstration, that it is costing taxpayers serious money in police and sanitation overtime.

As for the phony 99% battle cry, the fact is most of this country is still capitalist, not socialist. Income inequality is an expected result in our system; in fact without it, where is the incentive to get an education, to work, to outperform? The country does not guarantee equality of result, it only promises opportunity. The history of socialism is to deny both opportunity and success.

As an avowed capitalist, I would be happy to be in the 1%, but don't think of it that way. I think about being lucky to be in the 91% that's working and the 50% that's paying income taxes. Today, Rep. Michael Grimm of Staten Island came out with blistering criticism of the Occupy group and praise for the police and Mayor Bloomberg. You can expect to hear more politicians climbing aboard that bandwagon in the days ahead as the movement crumbles.
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If the rudderless left, including Hollywood and the academic drones, want satisfaction for their complaint about the failure of any significant Wall Street or banking figure to go to jail for "causing" the financial crisis, I have a candidate for them. How about sacrificing John Corzine to the left's tender mercies? The former Goldman Sachs honcho, former Democratic Senator from New Jersey, former Governor of the Garden State, and most recently the CEO of the failed MF Global investment fund family has an almost unbroken record of haplessness. In addition to driving his firm into bankruptcy, there is now about $600 million dollars missing on Corzine's watch. Of course, since he's a Dem, offering him up is probably not what the crazies have in mind.

Mr. Corzine's contempt for the rest of us was evident during his tenure as Governor when his chauffeur, driving at reckless (and illegal) speed, involved the Governor in a serious traffic accident which Corzine was fortunate to survive, albeit with serious injury. It came out that the Governor set a fine example for the populace by not wearing his seat belt even as his driver nearly doubled the speed limit.

Until the $600 million shows up, color me suspicious.
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In the internet age, young adults don't read newspapers or watch the news much on TV. How do they stay informed? Inconsistently, and I think the internet becomes their main news source, a scary idea when you review what passes for news coverage on sites like Yahoo.

Anyway, during the Jets pre-game Sunday, there was discussion about the Penn State fiasco, which it turns out my daughter knew nothing about. I was a bit shocked since it seemed to me you'd need to hide under a pretty big boulder to miss that story. Anyway, I explained that a former Penn State coach had allegedly been seen molesting young boys in the shower. She was incredulous. "I thought only priests did that," was her instant rejoinder.

10 years of Catholic education down the drain.
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The Congressional Super Committee, as expected, is heading toward a crash on the rocks, an almost inevitable result given whom the respective parties selected to solve the deficit problem. I give it about a 30% chance to come up with anything like the $1.2 trillion in savings they are assigned to find. Of course the Dems have made repeal of the "Bush tax cuts" for those families at $250,000 or more income their sine qua non for agreement. This has been party dogma ever since the day the cuts passed. This is a non-starter for the GOP. Given the way the Senate breaks down these days, both parties can stop everything and neither party can pass anything. If, in fact, we get nothing, there will be some interesting effects. First, there is supposed to be sequestration, meaning every department of government, including defense will be cut proportionately to achieve the $1.2 trillion over ten years.

I have no problem with this result. $1.2 trillion over 10 years is a peehole in the snow compared to what the Obama administration has added to the deficit, by means of the phony stimulus and their other failed initiatives. We'll still be at higher spending levels than fiscal 2009 even if this cut takes place. That won't stop Dems from sounding the alarms as if the spending reductions might cause the world to end.

The second result is that not only will the tax cut for "wealthy" Americans expire, so will the cut for the other brackets. As I have pointed out on this blog ad nauseum, this will impact middle income taxpayers much more than wealthy ones, since the latter pay according to the AMT schedule already. All the increased rates will do to them is move some of their taxes from Form 6251 to Form 1040. Middle class taxpayers will actually pay more in taxes. That Dems support this is indicative of their belief that if they repeat something often enough, even if it's wrong, they can get you to vote for them if they can just make it sound like Republicans are out to screw you. I guess they believe the adage that no one ever went broke underestimating the intelligence of the people.
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What a joke the Obama jobs plan is when you consider how many jobs we will lose and how much extra oil we will import from the Middle East because the Keystone pipeline will be delayed while yet another environmental impact study is conducted. This bow to the greens may actually result in no pipeline at all, since the Canadians seem to be figuring out that it is easier and more lucrative to sell the oil to the Asian countries than to us. This means the hydrocarbons will still be burned, but we will have nothing to show for it. Obama has no problem with this result if it buys him a few green votes.

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So I'm listening to a new CD I got in the Washington area which I can't wait to play for our guests Sunday. In Alexandria is a famous Irish pub, Murphy's, where singer/guitarists on two levels serenade the hard drinking clientele with old Irish drinking songs. Needless to say, everyone sings along and a great time can be had.

At one of the pubs near my hotel in National Harbor on Saturday night, they import one of the Murphy's players to do much the same act (but not quite as raunchy or raucous). Anyway, the singer the night I was there was Rocky Guttmann and I guess he was pleased I put something in his tip jar because he handed me his CD at the end of the night. The CD is great fun and is called It Could Happen. I especially like the Guinness Beer Song. Use your imagination.
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On 11/14, we bought 200 shares of IDT. Yes I decided to keep it on the buy/hold list. I think it's going to prove to be a good income stock. The price was 13.89, and it's a "zero buy." On 11/14 we bought 20 shares of TIP, as we still anticipate that inflation is a real risk. The price was 117.29. Finally, on 11/16, we sold 200 shares of ADPI, the stock that is the subject of a pending takeover at 19. Still some of these deals fall through, so it's OK to leave some money for the arbs. We got 18.71 per share for stock we paid 5.20 to buy on 12/17/07, in the IRA.

Today's buy order, adding to our FFEX position, was a limit order and didn't execute, as the stock ran away to the upside. A lot worse things can happen. We'll be back at it next week.

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