Stock market will tumble, if tax cuts aren't passed!

[Edge-]

http://www.businessinsider.com/trump...m-plan-2017-10

Related to the tax reform attempts - it took 24 hours for Trump to go from "NO TOUCHING 401K!" to "Well, it's on the table!"

He's words are reliably unreliable.

[Heladys]

The market will tumble if cuts are promised but not delivered. It will not tumble solely due to existing business conditions. That's fearmongering.

[Zan15]

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%.

that's the sad part is people think any of that 15% cut will end up as higher wages or helping anyone below the 1%

[Sunseeker]

The Stock Market is so ridiculously disconnected from the every-day income and employment reality of the common American as to be completely meaningless.

Short of the Stock Market dropping by something insane like half or more, a "tumble" will go absolutely unnoticed by the average American.

This is just more bullshit fearmongering by the 'cons to get stupid people to support things that are against their interests.

[Zan15]

[QUOTE=Mittens;47699248]That is common sense because none can actually predict the future. But if the financial experts of MMO-c are so sure that we are on a bubble, they are free to give it hand, else they are these guy:



lol 25% in such a short time, history kind of represents this as a sign of anything from a mini bust to a full on crash.

only time a gain like this sticks is right after the market drops 25-50%.


not to mention this is on top of a 200% run up prior to Trump even getting into office.


they might not be able to predict the future, but they sure are able to put odds on the table.

[Celista]

Fearmongering. Even if there is a short-term backlash, the market will correct itself. In any case, who cares, you should be investing in the long term anyway.

[Vankrys]

i don't see tax reform passing in its current format.

When the report shows that the current tax reform will actually increase tax on the middle class, and give massive cut on the wealthy.
The congress has shown its willingness to shut down any legislature that does not beneficiate its electoral base, regardless of parties.

People are opening their eyes on the ploy to make the rich richer at the cost of the average american.

[Rasulis]

Fearmongering. Even if there is a short-term backlash, the market will correct itself. In any case, who cares, you should be investing in the long term anyway.

I second this. People are working so hard to find the next Amazon/Google or trying to beat the market. They forgot that there are companies that have been beating the market for 30 years or more.

Take a look at Oracle. When Satya Nadella was asked which product he wishes that Microsoft had developed first, he had a somewhat surprising answer: The relational database, a key element of most software, which Oracle first brought to market in 1979. That 10-year lead gave Oracle a huge lead over their competitors that they have maintained to the present. Oracle's products market share is larger than nos. 2 and 3 combined (Microsoft and SAP). Actually it is larger than 2, 3 and 4, except I can't remember the name of no. 4.

Also Johnson & Johnson, Procter & Gamble and Quest Diagnostics. All three have one factor in common, even during the worst economic conditions, people still have to use their products.

[Rasulis]

There's a huge difference between investing in "the next Google" and investing in Oracle. The first will make you massively wealthy with generational income. The second will make your portfolio do well.

However I don't advocate people try to time the market. It's an easy way to make an expensive mistake. But investing while the irons are hot is the cornerstone of smart investing and the results are massive profitability. The elements analyzed to determine these are often not as sexy as simply finding a market disruption.

I agree with investing in non-cyclical, consumer staples.

While I was employed at Oracle 1983 – 1987 I took advantage of their stock discount program, and maxxed out my option every year. My roommate, we called him Mr. Wall Street Journal, kept telling me that I was wasting my money, and that the stock had already peaked. I wish we had kept in touch, just so I can say “I told you.”

[Deleted]

Technically, truth can be fear-mongering. But I would take a qualified guess that if those tax cuts aren't passed, it would make the stock market tumble to some degree (this going from either dropping or just stagnating). It should be fairly obvious that some of the purchases and prices of stocks are at their current level, because they were expecting said tax cuts.

Unless of course someone can convince people that the price they bought for will just take a bit longer to be profitable.

[Taso]

From the angle I’m looking at it would be good if the market fell so that trump looks really good with a tax cut and then we can blame obama like how every other stock market crash blamed the previous president.
On the other hand which is reality the market is not going to crash anytime soon. The stock markets current uplift is reflected on the positive global growth. Everywhere that is connected to the global economy seems to be improving tremendously since the financial collapse of 08. This in turn spurs more growth for the stock market and with new consumer demand will only add to this positive vibe.
The tax cut itself I’m not looking at from a down trickle economics perspective I just see it as a necessity since our tax codes are archaic. Thirty years is a long time and with technology we need simplicity not complexity.

[Gestopft]

The tax cut itself I’m not looking at from a down trickle economics perspective I just see it as a necessity since our tax codes are archaic. Thirty years is a long time and with technology we need simplicity not complexity.

You're talking about tax reform, not tax cuts. A tax bill could include both reform and cuts, but they are different things.

[Zan15]

While I was employed at Oracle 1983 – 1987 I took advantage of their stock discount program, and maxxed out my option every year. My roommate, we called him Mr. Wall Street Journal, kept telling me that I was wasting my money, and that the stock had already peaked. I wish we had kept in touch, just so I can say “I told you.”

That's odd since their stock did not go public till 1986.

Initial Public Offering (IPO) of 2,100,000 shares was on March 12, 1986 (Merrill Lynch & Co., Alex Brown & Sons, Inc.), with an offering price of US$15.

seems like you had less then a year to take advantage of their program

[Mormolyce]

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.

Kind of both, stock markets are fickle beasts and react in the short term to any such bad news.

Short term variations in the stock market =/= health of the economy though, which is the thing he's really trying to imply for political scare tactics.

[Rasulis]

That's odd since their stock did not go public till 1986.

Initial Public Offering (IPO) of 2,100,000 shares was on March 12, 1986 (Merrill Lynch & Co., Alex Brown & Sons, Inc.), with an offering price of US$15.

seems like you had less then a year to take advantage of their program

Two years. 1986 and 1987. When I quit to join T.Y. Lin I had around 19k of Oracle stock.

[Rasulis]

Part of the recent growth is a bubble but it is not that significant to cause capital flight. Some of the capitalization will be lost and there might be some turbulence for a week or two once it becomes clear that there will be no tax cuts but the market will self-correct. The value of the US to corporations has never been low levels of taxation anyway.

It is something that I have been trying to explain to people. All they need to do is look at these companies' financial statement. Amazon (a company with revenue over 130 billion in 2016) paid 1.5 billion in taxes on a 47 billion profit. Oracle (50 billion in revenue in 2016) paid 2.56 billion on 30 billion profit. These companies, especially the multi-national and tech companies, are not paying anywhere near 35% tax rate. Not even 20%.

[Rasulis]

I mean certainly they were excited at paying even less but it's not like they needed the cost cutting measures to make ends meet and they certainly did not lack funds for further investment that would only be financed by cutting taxes. If it makes sense for these companies to expand their activities and create new jobs, they can get the funds directly from the stock market or at worse they can issue debt; the market is hungry for investment opportunities. So maybe a bit of the growth will have to be trimmed but that's healthy imo. Noone profits from these surges other than speculators and they are a cancer.

Yep. Here is an interview with Satya Nadella. Check the last question about corporate tax. Better yet listen to the podcast. Here is a CEO whose company is listed by WSJ as one of the top 10 companies that will benefit the most from the corporate tax reduction, and if you listen to the interview, it barely elicited any response, let alone excitement.

https://www.marketplace.org/2017/09/...resh-microsoft