Interesting tax code vs stocks

The "penalty" for expatriating assets changes significantly on Dec 31.

Individuals have the same options as multinational corporations concerning where they invest capital and operate their skills.

 

Of course sell off already in progress for stocks with large gains such as Apple as people try to lock in low cost long term gains. I sold a tiny position in ConEd on Cramer's recommendation as ConEd will be less advantageous due to big gains to take profits and the nifty dividend will now be taxed more, which doesn't bother me, but that means the rich folks are dumping their shares. There are some deals but you have to have thick skin. The market is below its 200-day moving average as of yesterday which means that's one sell signal. Some pundits feel however the market naturally strong in Nov/Dec so the current sell off is muted could be worse in January. The other thing holding the market up a little bit is, if the fiscal cliff is avoided by an unexpected break-out of non-partisan good cheer, then there will be huge upswing in the market, so hope is holding up the market. It's not really hope it is greed and pricing in the chance that something good could possibly happen. If you were out of the market you could miss a huge upswing. But I am a fixed income guy anyways almost all out. Follow Cramer on TV if you want to find stocks which may be already be ready to bump up (Facebook possibly).

 

I always find it interesting how talking about the stalk market makes people skiddish and does things to the market. It is like Schrodinger's waves. When you start talking about it and observing it, that changes it. The speculation about what might happen changes what people would have otherwise done which makes more speculation and it is a viscous circle.

Capital gain taxes are so low now, it really doesn't bother me to pay more. And it is only a tax on the gains. You won't ever be taxed into a loss. You will just have less profit worst case scenario. So what's the big deal?

 

The frau and I got out of stocks almost entirely after we lost $300K in the tech crash... but rich folks will not do that because it is still cheaper in the longrun to only pay capital gains or be taxed for dividends.

Those of us whose earnings are from rents and wages will always pay a higher rate.

Why the heck do you think Mitt's marginal rate was so low... cause the rich know where to keep their coins... investments that pay returns, not investments that need to be liquidated to realize an income, or salaries that are taxed at the highest rates.

 

i was wondering why the market was falling. i'm not in it because i think it's rigged. doesn't mean you can't make money, just that it's more gambling than investing in my mind. should be an interesting couple of months ahead.

 

What's bad about the current situation is lack of stability and lack of ability to plan.
If I was in charge I would say: phase back into old tax rates over 4-year period.
None of this instant change - we have no way to predict market reaction impact on our savings.
Whether you are repub or demo, it is ultimately unacceptable be in Nov. and we are clueless about tax law for January. This effects retirees having to write wills and all that stuff is up in the air, and it has been in flux since Bush admin started these tax discounts and death tax reductions, I do not know 6-8 years ago or so.

 

An interesting discussion that I heard today on "to the point" discussing energy futures (oil, fracking, Re, gas etc) suggested that the fiscal cliff would result in enough drop in demand for gasoline, that the price would MORE than offset the increase in taxes. An interesting hypothesis, that I am not sure I agree with, but his point is, that we are emerging (rapidly ) to a new energy future that will require a major change in the way we look at macro economics. One case in point was a rebut to the argument that energy follows the world markets. The speaker made a compelling case to suggest this is increasingly less so. For example, energy is largely priced according to local demand, and the costs of transporting it to markets. He cite the example of Nat. Gas, where in the states it is currently cheap,, but in Japan they pay about five times as much. One look at "gas budd.coms " price map, and yol qu ickly see that the most expensive product is in the energy poor North east. (Nat. Gas excepted)He also noted that Canadian crude fetched about 75% of the world price simply because the expense of getting it to market. It is also going to have huge ramifications with "tar sands" oil, which in turn will have major repercussions through the Canadian economy. It has been suggested that there is going to be a huge influx in energy intense US manufacturing, to take advantge of cheap energy, and the
Germans for one are worried. It has been suggested that sooner than expected the balance of trade numbers will skew heavily in favor of the US, both because we will send fewer dollars off shore for envy, but because we will be able to compete in manufacturing. Even the Japenese car makers are making plans to build cars here, for export to Japan!

The down side of this, is that it gets harder to make RE more cost effective. On a side note, one priciple driver (in addition to fracking) has been the move towards more efficincy in the use of energy, particularly in transport.

Icarus

 

I do not believe that stocks should be bought with the intention to reap a short term capital gain. I would look for established entities that have a history of paying regular dividends. As a stock's price drops (or is driven down) the dividend doesn't get cut. At the lower price the stock has a higher rate of return which should help to raise the price.

It is easy to look around the area & see the dark cloud. Now ponder what you see. Shore resort areas are damaged or destroyed. Displaced people need to live somewhere. Rental properties can now be rented year round. At least some of the excess inventory is off the market.

Office space in Lower Manhattan is still unusable. Those displaced workers (by the thousands) have to work somewhere. One tenant relocated 3000 workers from 55 Water St. Occupancy rates are increasing uptown.

If you are in the construction trades or landscaping you can get more work than you can handle. People are going to rebuild. It doesn't matter whether or not it is a wise or prudent decision.

Here is a phrase from high school Physics class: Asses come in masses. The time to pick up bargains is when everyone is selling. The media are hyping the crap out of this "fiscal cliff" which is causing & will cause emotional panic selling. If you look at the numbers they aren't that big & they don't happen all at once. Presuming we are all still alive after the Solstice the world isn't going to come to an end on January 1.

 

jim, you're too darn pragmatic for priuschat!

 

The current pricing situation is a consequence of Superstorm Sandy. Usually, NY's gas prices are lower than California's and on par with the rest of the West Coast.

Didn't I read that the Northeast is more dependent on refineries that can process only Brent-style crude oils, not the more difficult to refine West Texas Intermedia-type crudes? When I started watching oil prices some years ago, Brent was priced roughly 5% higher than WTI, but today it is 26% more expensive.

 

Another point the guy (whose name escapes me) mentioned was that the majors have by and large gotten out of the refining business. As another side note, there is a piece in the news today about how refineries on the west coast apparently manipulated the market twice in the last year, claiming there were shortages of finished product, and tht they we not producing gasoline due to accidents and shut downs, when they actually were, artificially driving up the price in CA. It is no surprise that we can never "prove" collusion. These guys don't have to collude, they all know what the other is doing, and can effectively collude, without actually speaking to one another.

One final note, BP's $1 billion fine today for the gulf spill, was less than 1/4 of it's QUARTLY profit,,IIRC so as they say, a spit in the ocean.

Icarus

 

The classic struggle ...

A society has to decide how to pay for their common expense, tax capital or tax labor.

Capital has no borders and travels to where it can earn the most. Labor on the other hand is fairly captive and requires capital to be productive. If a society is learned in these matters it implements policies to attract capital for the purpose of making labor more productive rather than shunning capital and thus lowering labor's productivity.

 

Make that $4.5 billion. CNN: BP to pay record penalty for Gulf oil spill

 

Sorry for the error,, but what's a billion here or there to BP?

Icarus

 

...good summary, they say wind not doing well at the moment

Why Alternative Energy Stocks Are Down Despite An Obama Victory | Alternative Energy Stocks

 

I bought apple at ~$100 which seemed expensive. I just had. Stop loss sell at. $590. Wish I had bought more,, and sold a few weeks earlier.

Icarus