Mnuchin to Congress: Cut taxes or market will dive

[KingsX]

The ORANGE SWAN set this up.  It won't be pretty.


Mnuchin to Congress: Cut taxes or market will dive


"Treasury Secretary Steven Munchin, speaking on the eve of the 30th anniversary of the 1987 market crash, predicted stocks will plunge if Congress fails to overhaul taxes.

"There's no question in my mind if we don't get it done you're going to see a reversal of a significant amount of these gains," Mnuchin told Politico on Wednesday. "

http://money.cnn.com/2017/10/18/investing/mnuchin-tax-cuts-stocks-wall-street/index.html

[KingsX]

.


The economic term, "black swan", is something unforeseen that comes out of left field to tank the market.

In this case, the swan is orange.

Trump was the first to tout tax cuts which sent the stock market to new breaking highs. In other words, Trump promised the sky and the markets shot to the moon.

Trump also promised low and middle classes huge tax cuts. Trump initially promised $25,000 single/$50,000 married couple standard deductions. This is why many common folk voted for Trump.

But the GOP's proposed tax cuts for the rich is an abomination that will greatly cut taxes on the most wealthy while increasing taxes on many low and middle incomes. In other words, the GOP's proposed tax reform has initiated class warfare and tells the lower and middle classes to "eat cake."

Trump has manipulated the GOP between a rock and a hard place... whether their tax cut for rich oligarchs passes or not... it won't be pretty.

[jmyrlefuller]

Mnuchin is fooling himself if he thinks he can manipulate the stock market this way. Investors are not stupid.

This boom is driven by one fact, and one alone: with Obama out of the White House, his administration's regulations that were putting a chokehold on growth are no longer in place. Most Wall Street investors can see through transparent boasting; if they don't have good reason to believe Trump was telling the truth (and let's be honest, Trump is not exactly Mr. Honesty), they won't buy or sell based on his claims.

[InHeavenThereIsNoBeer]

Mnuchin is fooling himself if he thinks he can manipulate the stock market this way. Investors are not stupid.

This boom is driven by one fact, and one alone: with Obama out of the White House, his administration's regulations that were putting a chokehold on growth are no longer in place. Most Wall Street investors can see through transparent boasting; if they don't have good reason to believe Trump was telling the truth (and let's be honest, Trump is not exactly Mr. Honesty), they won't buy or sell based on his claims.

This bubble is being driven by one group of things, central banks, purchasing assets at unheard of levels (the Fed stopped and held a few years ago, but others made up for that) and holding interest rates so low investors can't find yield anywhere else (and are afraid to "miss out"). 

[KingsX]

This bubble is being driven by one group of things, central banks, purchasing assets at unheard of levels (the Fed stopped and held a few years ago, but others made up for that) and holding interest rates so low investors can't find yield anywhere else (and are afraid to "miss out").

Historically low interest rates for the past decade have pushed many otherwise prudent people into the stock market.

But since Trump began touting his tax cuts for businesses... the market has shot over the moon.


" Major Index Performance Since the Presidential Election:

S&P 500 (SPY): Up by 23%
DJIA (DIA): Up by 28%
Nasdaq 100 (QQQ): Up by 30%
Russell 2000 (IWM): Up by 32%
Financials (XLF) Up by 36%

These are exceptional 11 month returns and have been achieved in part due to the expectations for tax cuts. If any suggestions materialize that the tax initiative is in jeopardy the moves to the downside could be swift and violent, especially in the small caps index which is up by over 10% in the last few weeks alone. "

https://seekingalpha.com/article/4111223-trump-going-love-huge-tax-cuts

[Fishrrman]

Mnuchin to Congress:
Cut taxes or market will dive...

Fishrrman to Mnuchin:
The market going to dive anyway (eventually)...