Ramesh Rangaswamy's  Instablog

The capitalism that the companies want to follow is to borrow as much money as possible and distribute it to shareholders and owners of the company this year when the dividend income tax is 15%. Starting from next year, for a continued N number of years until the tax rates are favorable, they will be paying interest on the borrowed money and hence see no profits.

Today ORCL have accelerated their dividend payments, and many companies like Apple(AAPL), Panera(PNRA) and Michael Kors Holdings Ltd (KORS) will follow suit..

I believe stock market will crash if tax rates are increased and will continue to be down. It is called rigging the game or gaming the Government.

Everyone wants to play the game. Taxpayers, Government and the companies. Some win and Some lose.. You choose who you want to be..

IF you remember last year in September, out of the blue Job Numbers came out so bad and media started warning of double dip.. Markets went down 600 points and many Blue Chip stocks were down more than 5% in one day, despite SEC had promised that they had controls in place to prevent stock crashes..

Then in 1-2 months everything became normal and there was unbelievable rally for next 6 months

With the Government debt being so high and even borrowing from foreigners and central bank at 3.5%-5.5% is a huge burden to the government, compared to selling treasuries at 1.5% or negative interest rates.

From the late part of 2008 to this date, Banks borrowed from FED at almost 0% and bought treasuries that yielded 3.5%. It was an easy job. That is when the media and the Government bragged about recovery and stuff.They had tightened lending due to loses from people unable to pay the debt and this was a sweet deal for them to make money despite not lending.

I believe that the Government has learnt to deal with customers(foreigner investors) directly selling treasuries at 1.5%. They recently announced that China could buy treasuries directly instead of going through Wall Street Firms. I have a sense of doubt about the governments direct dealing.

Let us see the news head lines lately...

China growth slows..

US Job numbers slow

stock market slows/ crashes and investors want safe heaven

They go and buy US treasuries at 1.5%

They even pay German Government money to park their money, Since Germany pays -.09 %..

This could be one or two reasons along with Greece/Spain mishaps

If the stock markets are going high why would any one want to buy treasuries at 1.5 %. All they had to do is scare the heck by bringing job growth numbers out and flexing it to their convenience .. They could continue this for a few months while accumulating job numbers to give a pre election 3 months surprise. JPM ,Citi Group(C) Goldman Sachs (GS) are reeling in their lows and no one want to touch them due to fear. This feels like a game of Governments and Banks.

Disclosure: I am long VXX.

Additional disclosure: I have bought VXX stock @ 17.x, sold covered Call options for higher prices and also bought a VXX Put. Kind of a straddle...Buy and sell based on the swings..

5 headlines for the last 2 years:

1) Investors Shrug Off Euro Crisis,Stocks rise

2) Investors Sell Greek Fears, Markets fall

3)Stock rise on hopes of Fed Stimulus

4) Markets sell off, disappointed at Feds feeble attempts

5) Fears of Double Dip, Stocks fall and Investors Seek safe Haven, Government sells 100 Billion in Treasuries

Are there any news media like Seeking Alpha which will shed better light giving investors a different view.