The Scottish Widows Investment Fund (I'm not making this up) doubled up their investment in British Petroleum (BP). They were already the largest holder of BP stock. I am not one to say this is foolish, perhaps they made a great score, but when you buy a stock for the dividend while at the same time the US Congress is demanding the elimination of the dividend to pay for the cleanup...well that's just takes more chutspah than I have.
This reminds me of the line from the movie "The Mask of Zorro" when the elder Zorro says to the "in training Zorro" that fighting on emotion would cause him to "fight bravely and die quickly".
There is this huge battle over deflation/inflation. What happens to all the Scottish Widows if BP cuts it's dividend? The dividends are not paid to the widows; the widows have less money to spend. Therefore they spend less money giving less business to everyone around them.
This scenario is being played out all over the world. The Euro Zone is using the term "austerity measures" to describe cutting back spending. The US states are all cuting back spending. This leads to less employment and less spending. It is a slow death spiral unless real demand and real employment and real wealth creation can happen somehow.
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