Treasury Secretary Steven Mnuchin says the stock market will tumble, if tax cuts aren’t passed
http://www.marketwatch.com/story/mnu...ors-2017-10-18
Fearmongering or truth?
My bet is on fearmongering.
Treasury Secretary Steven Mnuchin says the stock market will tumble, if tax cuts aren’t passed
http://www.marketwatch.com/story/mnu...ors-2017-10-18
Fearmongering or truth?
My bet is on fearmongering.
Truth... if Trump doesn’t get the 15% cut he promised, the market will react accordingly. A lot of the current growth is speculation that Trump’s 15% cut to corporate taxes, will mean a 15% boost in corporate earnings. If it doesn’t come to fruition, expect the market to adjust by about 15%.
Folly and fakery have always been with us... but it has never before been as dangerous as it is now, never in history have we been able to afford it less. - Isaac Asimov
Every damn thing you do in this life, you pay for. - Edith Piaf
The party told you to reject the evidence of your eyes and ears. It was their final, most essential command. - Orwell
No amount of belief makes something a fact. - James Randi
The stock market is based on speculation and part of that is assessing future options.
The stock market has very likely already factored in the impact of potential tax cuts -- and they likely have figured it's unlikely to happen based on the healthcare failures. Given the lack of clear policy along with no path to pay for them, the stock market, at worst, will dip slightly when it's clear it won't happen.
But to state that the stock market will tumble is not only stupid but irresponsible.
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I disagree. The market has to have built in considerations for not passing. So it doesn't make sense that a (at best) 50/50 shot at passing a 15% tax cut would result in a 15% correction in the market if it doesn't happen. That's not how stock market speculation works.
Stock market will tumble either way eventually. Current "unstoppable" gains are unprecedented, and aren't based on any well-understood factors.
Noone knows exactly when it will tumble though.
But stock market did react positively when Trump was elected, so clearly something from his agenda appealed to them. And "tax cuts" is one of more obvious options.
Other would be jobs and support of local manufacturers; but he aren't going to deliver on that. At least taxes are more Congress then Trump dependant.
Last edited by Shalcker; 2017-10-23 at 06:04 PM.
Folly and fakery have always been with us... but it has never before been as dangerous as it is now, never in history have we been able to afford it less. - Isaac Asimov
Every damn thing you do in this life, you pay for. - Edith Piaf
The party told you to reject the evidence of your eyes and ears. It was their final, most essential command. - Orwell
No amount of belief makes something a fact. - James Randi
Folly and fakery have always been with us... but it has never before been as dangerous as it is now, never in history have we been able to afford it less. - Isaac Asimov
Every damn thing you do in this life, you pay for. - Edith Piaf
The party told you to reject the evidence of your eyes and ears. It was their final, most essential command. - Orwell
No amount of belief makes something a fact. - James Randi
I honestly do not follow the logic. You are assuming that the stock prices have no risk adjustment built in, which is provably false by a myriad of examples. There is lots of evidence that the GOP either will not deliver any tax cut package or a much more modest one. So I just don't follow why the stock market would tumble by the same amount of the maximum promise when there is considerable risk. Maybe I'm not tracking somewhere?
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There is lots to explain the increase. Reduction in unemployment, reduction in regulations, and anti-regulation administration, and the speculation of a business friendly administration. Companies are continuing to see record profits and there are major sectors of the economy that are doing well regardless, frankly, of who is in the white house.
I'm not saying the stock market won't react if the tax deal falls apart...I just don't follow the logic of the magnitude of the reaction. I mean a 15% drop in the stock market would be a 3,500 point loss on the DOW. That's...really really big, and unreasonably big for what is essentially a status quo continuation.
A lot of the market "leaps" this year were based PURELY on speculation that Trump would pass massive tax cuts on huge companies. People invested in these companies projecting that their stocks would go up if taxes cuts were passed... which would happen... if tax cuts are passed. This increased buying increases the value of these stocks prematurely because of higher demand.
If Trump can't deliver on these massive tax cuts, then the projected gains that people were expecting won't happen, and they'll begin selling off, creating a stock tumble.
Trump's promises might have created a temporary boom in the market, but his promises might also be the reason why many people end up jobless and homeless.
And let's not forget, that if these tax cuts pass and a tumble is avoided, that doesn't mean there won't be trouble down the line. Trickle Down economics (which is what this entire tax plan is based on) DOES. NOT. WORK. We KNOW it does not work. We know trickle down economics states that if we give the rich all our loaves of bread, we'll get some crumbs back. In reality they won't even given you crumbs, they'll just put their bread in offshore bank accounts and foreign investments, taking even more money out of the circulating American economy.
2014 Gamergate: "If you want games without hyper sexualized female characters and representation, then learn to code!"
2023: "What's with all these massively successful games with ugly (realistic) women? How could this have happened?!"
More specifically, there has been a lot of discussion on how repatriation would bring a lot of money back "in" to the country. Rather than spending that on investing in growth, the expectation is that much of that money will be used in stock buybacks and dividends, increasing stock values, hence the anticipatory market increase.
So yes, no tax cut will spook a lot of investors who have these expectations built into stock prices.
Conversely, a tax cut itself may not boost the market so much if the expectations are already built in.
Help control the population. Have your blood elf spayed or neutered.
This is my thought too. As long as corporations are dumping over half of their record profits into share buybacks while the average worker's salary stays flat, ad the cost of healthcare and education continue to rise...the underlying economy can only handle the bubble for so long.
"We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."
-Louis Brandeis
I'm totally getting deja vu on this. Its like when the Administration starting holding the ACA hostage over the CRS payments.
- Then they went ahead and shot the hostage anyways.
Also how can the Trump and Kushner organizations personally profit from this?
- Short the stocks of particular industries
- Attack those industries with taxes, regulatory shenanigans, or the Presidential Twitter ???
- Profit
My bet is on Profit.
http://www.macrotrends.net/1319/dow-...storical-chart
Looking at the past 10 years, that's quite a lot of growth for "not doing well under Democratic leadership".
Yes.
Yes they will.
It's a lot like saying "medical insurance prices will go up if Trump cuts their federal funding". That happened damn near overnight.
I don’t know about that. CA has 48 - 49 companies on the SP500. The cumulative market cap of these companies grew from 3.2 trillion in 2014 to 3.7 trillion in 2015, and over 4 trillion in 2016, and still growing in 2017. The same with the profit margins for these companies. You can check the trend and their financial statements yourself since they are available to the public. I would like to share my old employer’s profit margin trend.
https://ycharts.com/companies/ORCL/profit_margin
Which is pretty much representative of most of the CA SP500 companies.
It seems to me these companies will do well no matter who is in power. Tax cut or no tax cut.
Sarah Sanders tweeted that lowering the corporate tax rate will equal a raise for all employees.
Who believes this shit?