Fri 2/22/2019 01:23 ET
S&P 5002774.889.710.35%BANKS444.382.220.50%OIL56.980.020.04%BITCOIN3952.1015.020.38%
Welcome Stranger!  Please sign up or log in to enable additional features.Sign Up | Mail | Log In
Forum - Wall Street Pit    Stock Due Diligence for All

Msg Top | Msg List | < Prev | Next > | Post New | Reply | Privately | Search
From: franconia (Rep: 108) reply to maybeDate: 03/23/2018 19:33
Forum: Wall Street Pit - Msg #2726292Thread #673999534 (Rec: 7)
Re: Trump took credit for the rally, lets see if he takes credit for the fall...

Certainly there's more time to see what Trump can really do, but recall that markets went up under OBama approx 144% during his tenure. It was steady and measured without a lot of drama.

There was no need to spike the market with a tax cut as Trump has. I think we'll find in hindsight that it created a one time profit surge that can't be repeated again next year or in future years. It rerouted cash flow from paying government debts to increasing profits for one year and not paying those same taxes. In the end we get a stock price spike with a 1.5 trillion increase in government debt.

Typically, or at least according to traditional economic theory, as an economy cycles out of a depression into prosperity, you use taxes from increased profits to pay down government borrowing. In other words, Trump should have used profits from the current upturn to pay down the borrowing OBama used to rescue the spending used to rescue the banking and real estate depression.

So what's going to happen now, at the top of an economic cycle with low employment, we take the expected taxes to pay down debt and move it into the profits side of the ledger for those who own stock?

Debt increases, creating a vulnerability in the dollar, our treasury markets, meaning that even a small increase in normalizing bond rates imperils essential spending or worse yet, forces the US to increasingly adopt a more military posture in the world.

Recall that the great British Empire followed this route into economic retreat.

Reply to maybe - Msg #2726285 - 03/23/2018 16:11

Re: Trump took credit for the rally, lets see if he takes credit for the fall.

"Its really just the aftereffects of the Obama adfailurestration."
What would you like to do? Message: Endorse | Bookmark | Report AbuseUser franconia: Reward | Watch | Ignore

Msg Top | Msg List | < Prev | Next > | Post New | Reply | Privately | Search | About Us | Agreement & Disclaimer | Privacy | Twitter
© 1999-, Inc.