Reagan Adviser: Why Trump Wont Cut Taxes
BY DAVID STOCKMAN, EDITOR, BUBBLE FINANCE TRADER
Editors Note: Today, Reagans top economic adviser David Stockman explains why Trumps tax cuts and his stimulus plan are dead on arrival.
https://ci4.googleusercontent.com/pr...eadshot-01.jpg
The mules of Wall Street were back at it again, buying the dips after the overnight whoosh downward in the futures market. Apparently, it will take an actual two-by-four between the eyes to break a habit that has been working for 96 months now since the March 2009 post-crisis bottom.
We think it is plain as day, however, that we are in a new ball game that the "stimulus-blinded mules don't see coming at all. To wit, they have been juiced for eight years running by the Keynesian apparatchiks at the Fed who needed permission from exactly no one to run the printing presses full tilt or to rescue the market with a new round of QE or an extension of ZIRP whenever the indices began to wobble.
But now, even the money printers have made it clear in no uncertain terms that they are done for this cycle, anyway, and that they will be belatedly but consistently raising interest rates for what ought to be a truly scary reason.
That is, the denizens of the Eccles Building have finally realized that they have not outlawed the business cycle after all and need to raise rates toward 2-3% so that they have headroom to "cut" the next time the economy slides into the ditch.
In effect, the Fed is saying to Wall Street: "Price in" a recession because we are!
After all, our monetary central planners are not reluctantly allowing interest rates to lift off the zero bound because they have become converts to the cause of honest price discovery----nor are they fixing to liberate money rates, debt yields, and the prices of stocks and other financial assets to clear on the free market.
Instead, they are merely storing up monetary ammo for the next downturn.
But the Wall Street mules keep buying the dips anyway because they are under the preposterous delusion that one source of "stimulus" is just as good as the next.
And since the gamblers have now decreed that the "stimulus" baton be handed off to fiscal policy, it only remains for Congress and the White House to shape up and get the job done with all deliberate speed.
But they won't.
Not in a million years.
The massive Trump tax cut and infrastructure stimulus is DOA because Uncle Sam is broke and the U.S. economy has slithered into moribund old age.
In that context, it's not remotely the same as the 12 members of the FOMC sitting behind closed doors for two days jawing about the short-term economic weather; and then at the conclusion of their gabfest, ordering the New York Fed's open market desk to flood the canyons of Wall Street with cash by buying another $80 billion of bonds with digital credits conjured from thin air.
Au contraire. Fiscal policy is inherently an exercise in herding cats and an especially impossible one when the cupboards are bare.
The essence of the matter at the present state of play is the legislative equivalent of "no ticky, no washy."
Without a 10-year budget resolution for FY [fiscal year] 2018 and associated reconciliation instructions, there is no possibility of passing a tax bill or even an infrastructure spending boondoggle.
But hammering out a budget resolution, passing it in each house, and reconciling the differences in conference would take months under the best of circumstances. But given the parlous state of Uncle Sam's fiscal condition and the partisan acrimony that already suffuses Washington in the era of Trump, passage of a budget resolution by summer would be a miracle in itself.
Indeed, even the thought of surmounting this next daunting legislative obstacle course puts to rest this week's particular Wall Street fantasy. Namely that after being burned by the Freedom Caucus on Obamacare Lite, the Trump White House will now "pivot" to the middle and form a coalition with the Democrats to make a deal on corporate tax cuts and infrastructure spending.
Yes, and if dogs could whistle, the world would be a chorus.
That is to say, there is no conceivable fiscal policy menu that could be agreed upon by Speaker Ryan, Nancy Pelosi, Chuck Schumer, and the Donald, and then be shoe-horned into a 10-year budget resolution.
Yet without a budget resolution and reconciliation instructions, there is not a fiscal stimulus "ticky" and no grand bipartisan compromise on building airports and slashing corporate tax rates.
So what lies directly ahead, therefore, is another bumbling attempt by the White House and Congressional Republicans to hammer out an FY 2018 budget resolution and what amounts to a 10-year fiscal plan. And it is there where the whole fantasy of the Trump Stimulus comes a cropper.
Recommended Link
https://ci3.googleusercontent.com/pr...hart-80x80.png
The EXACT Date of the Next Market Crash?
WARNING: The pattern you're about to see has preceded every market crash since 1919. Using this pattern, David Stockman had identified when the next market collapse is set to begin. Click here and discover when the bloodbath is set to begin. Hurry... we only have a few days left.
SNIPPET:
We’ve been handed the date on a silver platter.
Because the pattern is pointing to April 21.
This pattern is invisible to most investors because it only appears in the US Treasury bonds market…
When the government, through the US Federal Reserve, starts to increase interest rates.
Now, you might have heard about the Fed increasing interest rates…
But what we’re talking about here is something completely special.
See, minor adjustments in key interest rates, both up and down, are fairly normal.
But it’s when the Fed raises interest rates THREE times in a row that things tend to get ugly.
The third consecutive rate hike has a special meaning for the market.
It’s an indication the Fed is serious about cooling the economy and withdrawing its easy money stimulus.
As a result, stocks tend to crash.
This is known on Wall Street as the “three steps and a stumble rule.”
And it was discovered by the economist Edson Gould in the 1970s.
He noticed that when the Federal Reserve hiked interest rates three times in a row…
The stock market tended to roll over and crash.
And that brings me to the situation we have today.
The Fed recently hiked interest rates for the third time in a row.
And that completed the pattern.
Here’s how the pattern looks right now…
https://d13p2xj50zkyqm.cloudfront.ne...n_0317_004.jpg
The first and the second “steps” didn’t matter much.
The Fed hiked rates for the first time in December 2015. That was the first step.
Nothing happened! Stocks kept going up.
It hiked them again in December 2016. This was the second step.
Nothing happened! Stocks kept going up.
But now the Fed has just hiked them again last month.
This is the third consecutive hike.
And it’s the one that counts… the one that completes the pattern.
Based on the last five times this pattern appeared…
The crash started 37 days after the third hike, on average.
***That points to another crash… starting on April 21.
No wonder Wall Street bank UBS recently issued a note warning:
"The old saying 'three steps and a stumble' could put stocks to the test.”
COMMENTS FROM BENJAMINIS: As much as I respect and admire the KNOWLEDGE and EXPERIENCE of David Stockman and Bill Bonner and Jim Rickards the three of them have one thing in common and that while their information is FACTUAL in most cases they and no one person can predict the timing so please keep that in mind when you read the information. Their CONFLICT OF INTEREST in my opinion is that they are selling Newsletters and Information. So the urgency is their method (Marketing) of getting people to subscribe. I know because I have subscribed to Stockman and Bonner and Rickards and while the information and research is excellent and mainly factual there is no urgency and dates predicted rarely happen as suggested.
--
There are not remotely 218 GOP votes for what would be a $12 trillion-13 trillion add to the national debt with the Trump Stimulus program over the next decade----even with all the "dynamic" scoring and revenue "reflows" that are imaginable.
To be sure, this is why the GOP Congressional leadership stoutly insists on a deficit-neutral tax cut. They are keenly aware of the debt monster they have been kicking down the road----even if the headline-reading robo-traders of Wall Street are not.
What that means, in turn, of course, is that the rapidly fracturing Trump/Republican coalition must find the offsets on the spending side of the ledger.
In short, the whole enterprise amounts to budgetary madness and demonstrates the monumental magnitude of the Debt Trap that has enveloped the Imperial City.
And the buy the dip crowd will soon be getting that two-by-four between the eyes.
So now is not the time to buy.
Regards,
https://ci3.googleusercontent.com/pr...-signature.png
David Stockman
Editor, Bubble Finance Trader
Editors Note: David Stockman spent the last 40-plus years influencing the highest levels of Washington and Wall Street. And thats why his advice is so highly sought after even by Team Trump.
In his just-released Urgent Warning, David tells you how to avoid getting crushed by the market crash he sees beginning on April 21. He also shows you his system for making money as stocks turn south. Read on here.
--
Bonner & Partners | About Bill | The Archives | FAQ
Comments from Benjaminis: I have been speaking of numbers in my last few posts. 1 + 1 Equals 2...
Now to another topic that ALWAYS MOVES MARKETS.
It is called PERCEPTION, (Lack of Common Sense) and this has driven the Equity Markets to ALL TIME HIGHS.
The article that you have just read from someone that knows is called REALITY.
When REALITY hits the markets then the PERCEPTION changes and the Money Flows in a different direction which would be out of Equities and into the safety of the US Bonds (At Least For The Immediate Moment) and into such Safe Haven Currencies such as USD/JPY and USD/CHF.
The Money Flow also will go into Silver and Gold.
I hope my posts of today have been informative and helpful and I am finished posting for today so any comments and or questions will be replied to on Sunday.
Benjaminis
BY DAVID STOCKMAN, EDITOR, BUBBLE FINANCE TRADER
Editors Note: Today, Reagans top economic adviser David Stockman explains why Trumps tax cuts and his stimulus plan are dead on arrival.
https://ci4.googleusercontent.com/pr...eadshot-01.jpg
The mules of Wall Street were back at it again, buying the dips after the overnight whoosh downward in the futures market. Apparently, it will take an actual two-by-four between the eyes to break a habit that has been working for 96 months now since the March 2009 post-crisis bottom.
We think it is plain as day, however, that we are in a new ball game that the "stimulus-blinded mules don't see coming at all. To wit, they have been juiced for eight years running by the Keynesian apparatchiks at the Fed who needed permission from exactly no one to run the printing presses full tilt or to rescue the market with a new round of QE or an extension of ZIRP whenever the indices began to wobble.
But now, even the money printers have made it clear in no uncertain terms that they are done for this cycle, anyway, and that they will be belatedly but consistently raising interest rates for what ought to be a truly scary reason.
That is, the denizens of the Eccles Building have finally realized that they have not outlawed the business cycle after all and need to raise rates toward 2-3% so that they have headroom to "cut" the next time the economy slides into the ditch.
In effect, the Fed is saying to Wall Street: "Price in" a recession because we are!
After all, our monetary central planners are not reluctantly allowing interest rates to lift off the zero bound because they have become converts to the cause of honest price discovery----nor are they fixing to liberate money rates, debt yields, and the prices of stocks and other financial assets to clear on the free market.
Instead, they are merely storing up monetary ammo for the next downturn.
But the Wall Street mules keep buying the dips anyway because they are under the preposterous delusion that one source of "stimulus" is just as good as the next.
And since the gamblers have now decreed that the "stimulus" baton be handed off to fiscal policy, it only remains for Congress and the White House to shape up and get the job done with all deliberate speed.
But they won't.
Not in a million years.
The massive Trump tax cut and infrastructure stimulus is DOA because Uncle Sam is broke and the U.S. economy has slithered into moribund old age.
In that context, it's not remotely the same as the 12 members of the FOMC sitting behind closed doors for two days jawing about the short-term economic weather; and then at the conclusion of their gabfest, ordering the New York Fed's open market desk to flood the canyons of Wall Street with cash by buying another $80 billion of bonds with digital credits conjured from thin air.
Au contraire. Fiscal policy is inherently an exercise in herding cats and an especially impossible one when the cupboards are bare.
The essence of the matter at the present state of play is the legislative equivalent of "no ticky, no washy."
Without a 10-year budget resolution for FY [fiscal year] 2018 and associated reconciliation instructions, there is no possibility of passing a tax bill or even an infrastructure spending boondoggle.
But hammering out a budget resolution, passing it in each house, and reconciling the differences in conference would take months under the best of circumstances. But given the parlous state of Uncle Sam's fiscal condition and the partisan acrimony that already suffuses Washington in the era of Trump, passage of a budget resolution by summer would be a miracle in itself.
Indeed, even the thought of surmounting this next daunting legislative obstacle course puts to rest this week's particular Wall Street fantasy. Namely that after being burned by the Freedom Caucus on Obamacare Lite, the Trump White House will now "pivot" to the middle and form a coalition with the Democrats to make a deal on corporate tax cuts and infrastructure spending.
Yes, and if dogs could whistle, the world would be a chorus.
That is to say, there is no conceivable fiscal policy menu that could be agreed upon by Speaker Ryan, Nancy Pelosi, Chuck Schumer, and the Donald, and then be shoe-horned into a 10-year budget resolution.
Yet without a budget resolution and reconciliation instructions, there is not a fiscal stimulus "ticky" and no grand bipartisan compromise on building airports and slashing corporate tax rates.
So what lies directly ahead, therefore, is another bumbling attempt by the White House and Congressional Republicans to hammer out an FY 2018 budget resolution and what amounts to a 10-year fiscal plan. And it is there where the whole fantasy of the Trump Stimulus comes a cropper.
Recommended Link
https://ci3.googleusercontent.com/pr...hart-80x80.png
The EXACT Date of the Next Market Crash?
WARNING: The pattern you're about to see has preceded every market crash since 1919. Using this pattern, David Stockman had identified when the next market collapse is set to begin. Click here and discover when the bloodbath is set to begin. Hurry... we only have a few days left.
SNIPPET:
We’ve been handed the date on a silver platter.
Because the pattern is pointing to April 21.
This pattern is invisible to most investors because it only appears in the US Treasury bonds market…
When the government, through the US Federal Reserve, starts to increase interest rates.
Now, you might have heard about the Fed increasing interest rates…
But what we’re talking about here is something completely special.
See, minor adjustments in key interest rates, both up and down, are fairly normal.
But it’s when the Fed raises interest rates THREE times in a row that things tend to get ugly.
The third consecutive rate hike has a special meaning for the market.
It’s an indication the Fed is serious about cooling the economy and withdrawing its easy money stimulus.
As a result, stocks tend to crash.
This is known on Wall Street as the “three steps and a stumble rule.”
And it was discovered by the economist Edson Gould in the 1970s.
He noticed that when the Federal Reserve hiked interest rates three times in a row…
The stock market tended to roll over and crash.
And that brings me to the situation we have today.
The Fed recently hiked interest rates for the third time in a row.
And that completed the pattern.
Here’s how the pattern looks right now…
https://d13p2xj50zkyqm.cloudfront.ne...n_0317_004.jpg
The first and the second “steps” didn’t matter much.
The Fed hiked rates for the first time in December 2015. That was the first step.
Nothing happened! Stocks kept going up.
It hiked them again in December 2016. This was the second step.
Nothing happened! Stocks kept going up.
But now the Fed has just hiked them again last month.
This is the third consecutive hike.
And it’s the one that counts… the one that completes the pattern.
Based on the last five times this pattern appeared…
The crash started 37 days after the third hike, on average.
***That points to another crash… starting on April 21.
No wonder Wall Street bank UBS recently issued a note warning:
"The old saying 'three steps and a stumble' could put stocks to the test.”
COMMENTS FROM BENJAMINIS: As much as I respect and admire the KNOWLEDGE and EXPERIENCE of David Stockman and Bill Bonner and Jim Rickards the three of them have one thing in common and that while their information is FACTUAL in most cases they and no one person can predict the timing so please keep that in mind when you read the information. Their CONFLICT OF INTEREST in my opinion is that they are selling Newsletters and Information. So the urgency is their method (Marketing) of getting people to subscribe. I know because I have subscribed to Stockman and Bonner and Rickards and while the information and research is excellent and mainly factual there is no urgency and dates predicted rarely happen as suggested.
--
There are not remotely 218 GOP votes for what would be a $12 trillion-13 trillion add to the national debt with the Trump Stimulus program over the next decade----even with all the "dynamic" scoring and revenue "reflows" that are imaginable.
To be sure, this is why the GOP Congressional leadership stoutly insists on a deficit-neutral tax cut. They are keenly aware of the debt monster they have been kicking down the road----even if the headline-reading robo-traders of Wall Street are not.
What that means, in turn, of course, is that the rapidly fracturing Trump/Republican coalition must find the offsets on the spending side of the ledger.
In short, the whole enterprise amounts to budgetary madness and demonstrates the monumental magnitude of the Debt Trap that has enveloped the Imperial City.
And the buy the dip crowd will soon be getting that two-by-four between the eyes.
So now is not the time to buy.
Regards,
https://ci3.googleusercontent.com/pr...-signature.png
David Stockman
Editor, Bubble Finance Trader
Editors Note: David Stockman spent the last 40-plus years influencing the highest levels of Washington and Wall Street. And thats why his advice is so highly sought after even by Team Trump.
In his just-released Urgent Warning, David tells you how to avoid getting crushed by the market crash he sees beginning on April 21. He also shows you his system for making money as stocks turn south. Read on here.
--
Bonner & Partners | About Bill | The Archives | FAQ
Comments from Benjaminis: I have been speaking of numbers in my last few posts. 1 + 1 Equals 2...
Now to another topic that ALWAYS MOVES MARKETS.
It is called PERCEPTION, (Lack of Common Sense) and this has driven the Equity Markets to ALL TIME HIGHS.
The article that you have just read from someone that knows is called REALITY.
When REALITY hits the markets then the PERCEPTION changes and the Money Flows in a different direction which would be out of Equities and into the safety of the US Bonds (At Least For The Immediate Moment) and into such Safe Haven Currencies such as USD/JPY and USD/CHF.
The Money Flow also will go into Silver and Gold.
I hope my posts of today have been informative and helpful and I am finished posting for today so any comments and or questions will be replied to on Sunday.
Benjaminis
1
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My gut instinct says, even applying this just to trade with existing trend/trading with the trend has great potential...
