WASHINGTON, January 8, 2013 – Proving that the notorious Journolist propaganda organization is still alive and well, a number of news outlets—Reuters and AP among them—have been pushing reports today trumpeting the decision by CalSTRS, supposed to be the nation’s second largest pension fund, to sell holdings in any company that manufactures guns that are currently banned by California state law. Quite a lot of them, no doubt.
Widely available reports crow that Connecticut-based gun manufacturer Sturm Ruger (RGR) dropped by 5% in recent trading, while Massachusetts-based Smith & Wesson (SWHC) was down fractionally.
What’s funny about these stories is that all this news was reported a month ago—in early December, 2012—when the stocks of firearms manufacturers took a hit following the Newtown Connecticut school massacre; and when CalSTRS first announced its intention to “review” such holdings (CNBC), government-speak for “it’s not what to do, it’s how to do it.”
Today’s rehash of what was essentially month-old news was geared to garner maximum positive media exposure and maximum damage to the stocks of gun manufacturers.” Recycling the story a month after it happened is simply another chapter in the concerted effort of Blue State lefties to squeeze the 2nd Amendment out of existence, much as odious British TV export Piers Morgan has been trying to do on CNN even though his opinion is not wanted or needed here. (See our cartoon above.)
Yesterday’s CalSTRS “decision” had clearly been made a month ago if you simply read between the lines. “Reviews” of situations in any government entity mean only one of two things: either the issue at hand will be “reviewed” to death, either allowing it to quietly slip off the radar screen; or, as in the current case of gun manufacturing, setting up the pretense that the government entities’ foregone conclusion had undergone, well, serious “review” before official policy was arrived at.
In the latter case, “review” time simply allows room to fine-tune preordained talking points that had already been determined ahead of time.
The fingerprints of the Journolists*—via their oft-preferred agents in the reliably left-wing Reuters and AP news services—are all over this one, as gun-control becomes the mantra of a government (and its allies) who want to wipe our continuing economic problems off the front pages. Just keep the story going as long as it takes to clear the way toward weakening the Bill of Rights another key notch.
This is an important point to remember, whether you’re actually for tighter control of firearms or not. Aided and abetted by the lapdog media, the Federal government under this administration continues to pursue Alinskyite tactics to smear and slander its enemies, corporate or otherwise, in order to pave the way for a never-ending series of fascist dictates designed to permanently besmirch the reputations of its “enemies” or, in extreme cases, drive them completely out of business.
Which is why, if you’re an investor—whether left or right—you might want to consider what’s going on here. Back in the heady early days of anti-tobacco legislation and tobacco income confiscation, these kinds of tactics were highly effective not only in damaging the business of companies manufacturing a legal product.
They were also employed to force tobacco companies to permanently re-direct a significant portion of their income stream toward Federal and State government coffers, allegedly to fund health benefits and campaigns geared toward stamping out tobacco. In practice, though, most of these revenues were long-ago spent on other pet projects.
In other words, governments didn’t really care so much about your health as they did about establishing another, permanent revenue stream for them to redistribute. If they really cared about your health, they would have banned tobacco products. But this was never about health.
So, too, we must keep our eyes on the real meaning behind the current fanatical anti-gun campaign. Yes, this administration would like to take away your guns, protestations to the contrary. But they can’t say that. What they can do is start banning more and more types of weapons and/or taxing sales of guns and ammunition to death, à la tobacco products. Such taxation would go to Federal and State governments to “educate” and protect people against gun violence. In fact, the revenue would almost certainly find its way into sweeter benefits for unionized state and Federal employees and payoffs to crony capitalists.
But on a more sinister level, both the tobacco brouhaha and the current anti-gun hysteria create another issue for investors in the stock market. It’s been around a long time, and it’s known generically as “headline risk.”
Tobacco companies have dealt with this now for decades, which is part of the reason they continue to pay out massive dividends. As capital gains have gotten tougher for holders of these predictably profitable stocks, they’ve had to increase dividends substantially to keep investors interested. But what this also means is that if you’re seeking capital gains in a big way, you’ll avoid companies like Altria (MO).
And that’s now the problem with the stocks of gun and ammunition manufacturers. Not only are governments attempting to kill their businesses (no pun intended). They are likely to use this entire tragic flap as an excuse for another massive backdoor tax increase on products that remain legal to sell. The tobacco pattern will repeat itself.
If anyone imagines that the Maven is dismissing out of hand the tragedy that recently occurred in Connecticut, they’re out of their minds. What the Maven is most concerned about here is the genuinely evil exploitation of this tragic event by a hard left that could care less about the kids than they do about eviscerating the 2nd Amendment, cowing the populace and corporate America further than they already have and, most likely, contriving to secure yet another permanent income source for government coffers that’s a “settlement” not a tax; or an outright weapons tax itself.
2nd Amendment nullification, headline risk, higher effective taxes, less ability for self-defense by law-abiding citizens: this is where this juggernaut is attempting to take us. Investors and just plain citizens alike had better step up to the plate on this one and stop it before it reaches its logical conclusion.
Meanwhile, if we really want to stop murderous gun violence by certified nut-cases, we might want to look into paying more attention as to why these people are still wandering the streets even though family, friends, and neighbors know full well that these damaged people are walking time bombs. They’re the ones doing the killing, not the inanimate firearms themselves.
The nutcases are the weapons we should be looking to control. But that’s not a soundbite you’re likely to hear on MSNBC. Or coming from this White House.
Oh, and by the way, news bulletin: the big drops in the stock prices of Ruger and Smith & Wesson occurred in December, not today. The CalSTRS news, as we mentioned, was already out in December and the stocks have begun to recover over the last few weeks. Today is likely going to cause a short-term stall in this recovery. But with Americans now panicking to buy the firearms and guns that are left, the quarterly numbers of both firms are likely to look very good indeed.
Oh, yes, there’s other investing news today. Jobless claims rose (never a surprise), ECB Prez Mario Draghi said nice things about “eventual” improvements in the Eurozone. And, on the sneakily negative side, manufacturing inventories were up, indicating sales have slowed—not always a good sign for the economy going ahead.
But, at least as of 10:30 or so this morning, the market didn’t care and picked up the modest rally it started yesterday. But things are wobbly. Guns aside, there’s likely to be a lot more headline risk in the weeks ahead, so dividend-paying stocks are still likely your best short term bet.
*Journolist or Journo-list. Not a typo, but the informal name given to a large cadre of left-wing “journalists,” nominally led by the Washington Post’s Ezra Klein, to shape the political news during the 2008 elections and beyond by publishing essentially agreed-upon propaganda in newspapers and on websites across the country in a seamless wave, creating the impression of truth or public support. Later unmasked, the group went underground, but still clearly exists as today’s anti-gun mass propaganda effort reveals.
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