This pie chart shows how the $863 billion of household income growth from 2002 to 2006 was spread around. Three-quarters of it went to the top 1%. And Bush/McCain/Palin think that wasn’t enough – that those good folks needed tax cuts on their additional income, even if it meant going further into National Debt to provide them.

It’s just loony tunes to hear McCain/Palin trying to frighten small business owners. For the approximately 98% who net less than $250,000 a year, taxes would go down or stay the same. And for the top 2% (a group very much NOT including Joe the Plumber or the owner of the business Joe hopes to buy), it’s not as though taxes would be confiscatory. They would simply be much as they were under Clinton/Gore, a time when almost everyone – very much including the rich – was doing well.

The real spread-the-wealth-income-redistribution-welfare state is Alaska. It takes wealth from the oil companies and sends big checks to every citizen in the state – even to people who pay no taxes! Even to people who don’t work!

On top of that, unlike Ohio, say, which gets back less than half a buck in federal assistance for every dollar paid in federal taxes, Alaska gets back more like five times what it pays.

Alaska is seriously on the dole – from states like New York.


Go ye, if your state has early voting, and do likewise.

Larry from Ft. Lauderdale: ‘Day after day, I read your column and just wish you’d stick to MONEY and other fun stuff. But you don’t. You’ve been shaking my resolve. I generally side with Republicans on economic matters, and despite disagreeing with them on so many other positions, I usually vote Republican. This is a great source of conflict for me, but that’s how I vote. Finally the other day I thought to myself, ‘Hey, I don’t think I’m a Republican who agrees with the Democrats on a few things any more. I’m a Democrat who just disagrees with a few of my new party’s positions.’ I’m voting for Obama!

☞ Yay! (Larry acknowledges it was Senator McCain’s choice of Governor Palin that finally pushed him over the edge. Here is Monty Python’s John Cleese on this choice.)


Not huge amounts – I’d be surprised if we’ve seen the bottom. But I do think most people are now relatively confident that the world’s central bankers simply will not allow a general collapse of the financial system, no matter what it takes to prevent it. Good news.

And because so many investors expect a tough, perhaps prolonged recession, that expectation may be largely built into stock prices. (Then again, it’s been so long since we had a prolonged, tough recession, investors may have forgotten, or never been alive to know, just how discouraged markets can get. Or how many stocks really can go to zero, as their underlying company gets reorganized through bankruptcy.)

Tax-selling drives battered shares even lower as people sell to realize losses they can use to offset gains they may have taken earlier in the year and up to $3,000 in ordinary income.

So 10,000 Boise Paper warrants could be had for $200 yesterday morning (and $350 yesterday afternoon), down 99% from their high less than a year or so ago. I bought a zillion of them not because I expect the underlying company, Boise Paper, to thrive. But what if it did muddle through? Its stock is down from $10 to 53 cents. What if by June 18, 2011, when those warrants expire, the stock had returned to $10? Highly unlikely, to be sure, but not impossible – and, exercisable at $7.50, each one would be worth about $2.50. So the 10,000 you bought for $200 – plus a deep discount broker’s $8 commission – would have become a $25,000 long-term capital gain.

A less reckless speculation, though still very much a speculation, would be to buy BZ stock itself. The leverage is not as great – and the possibility of total loss certainly still there – but with the stock, there is no deadline by which better times must return. If the stock hit $5 five years from now, you’d have made nearly 10 times the yesterday’s 53-cent closing price . . . whereas the warrants would long since have expired worthless.

Speculations like this abound (and my track record at picking them is, as many of you have learned from sorry experience, mixed). But I bought some Altus Pharmaceuticals yesterday at 50 cents, down from its $14 high a year ago. It has no debt to speak of and plenty of cash, at least for now. It’s a bet that the FDA will approve a drug someone smarter than me thinks it will approve.


Comments are closed.