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The Wall Street traders think a huge tax cut is coming for them, but more importantly they believe Dodd Frank will be repealed and the casino will be back in business.
Out of 30 Dow Jones companies, only five of them are financial services/investment banks. Why would DuPont give a shit about Dodd Frank?
"OK. Fair enough -- I should not diminish the costs. The wedding-cake example is spot-on. There's a certain symbolism there and forcing a baker to do that, and then persecuting him out of business is awful. That's a lot more in your face than serving them a pizza."
If you two are talking about the pizzaria in Northern Indiana, get your facts straight. The owners publically said they would never cater a gay wedding because it violated their "religous beliefs". Forget the fact they had NEVER BEEN ASKED TO DO SO. Following a public reaction, the owners received over $800,000.00 through a go fund me account. They weren't put out of business because of their religous beliefs. Talk about fake news being used to try to bolster one's position.
The crash had everything to do with Credit Default Swaps and CDOs, specifically the synthetic ones starting in 2005. None of the things you had listed generated those.
You have to differentiate between the housing crash and the subsequent market crash IMO. The former may have been spurned in part by government incentivization of loans (Although, as hack has demonstrated, that angle itself is overblown) but the latter was not inevitable because of it. The behavior of the major banks made an industry downturn into a catastrophe that also burst commodity bubbles across the spectrum.
Last edited by Wild Hoss; February 28, 2017, 03:32 PM.
There might be massive structural changes to the economy coming. Moratoria on and repeals of legislations could be a massive needle mover. Consumer optimism and stock market optimism reflect some of that too. I can't speak for anyone else, but the possibility that decades of job-killing government growth could be reversed has made me absolutely ecstatic.
Last edited by Hannibal; February 28, 2017, 03:44 PM.
I will give you one guess on which company in the Dow is powering the rally since the election.
The rally has been a broad one that includes the NASDAQ too.
Anyhow, I'm not here to argue that the stock market is something that Trump should take credit for, since in the end, it is still just speculation and he is going to have to deliver. But there is more to that speculation than one sector and it's not unfounded IMHO.
There might be massive structural changes to the economy coming. Moratoria on and repeals of legislations could be a massive needle mover. Consumer optimism and stock market optimism reflect some of that too. I can't speak for anyone else, but the possibility that decades of job-killing government growth could be reversed has made me absolutely ecstatic.
You must have been truly ecstatic during the Obama years when the crash eliminated so many job killing government jobs at all levels. Huge gains in private payrolls and losing jobs on the government payrolls. I know, fake news.
The rally has been a broad one that includes the NASDAQ too.
Anyhow, I'm not here to argue that the stock market is something that Trump should take credit for, since in the end, it is still just speculation and he is going to have to deliver. But there is more to that speculation than one sector and it's not unfounded IMHO.
You could have at least provided a guess. I'll eliminate DuPont, so now you are down to 29.
You must have been truly ecstatic during the Obama years...
Not really. 2% or less GDP growth, spiraling budget deficits, and plunging workforce participation doesn't really excite me. I'm glad that we have a President who hasn't accepted this as the new normal.
Last edited by Hannibal; February 28, 2017, 04:09 PM.
You could have at least provided a guess. I'll eliminate DuPont, so now you are down to 29.
I don't see much of a point. If one investment bank is the biggest winner then it doesn't offset the fact that there have been other big winners from other sectors, nor does it lend much support to your conclusion that the stock market rally is due to speculation over the repeal of one banking law.
Exxon and Chevron have exposure to Dodd-Frank section 1504. Apple, du Dont and GE, Boeing and some others may have exposure to Section 1502. I don't know how much, especially to 1502, but Exxon has fought pretty mightily against 1504. But IMO it's probably the potential tax amnesty that has the stock prices going up as well. Apple and Cisco have huge pools of capital held in US securities by their foreign subsidiaries.
Exxon and Chevron have exposure to Dodd-Frank section 1504. Apple, du Dont and GE, Boeing and some others may have exposure to Section 1502. I don't know how much, especially to 1502, but Exxon has fought pretty mightily against 1504. But IMO it's probably the potential tax amnesty that has the stock prices going up as well. Apple and Cisco have huge pools of capital held in US securities by their foreign subsidiaries.
I don't think that tax amnesty moves the needle very much if it's just a one time deal. An across the board tax cut does. What moves the needle even more is a relaxation of the regulatory environment, something that Trump has been promising more adamantly as of late than any President since Reagan. I think even more than Reagan. Reagan slashed his share of regulations, but there were lots of new ones that made up for it. I'm not sure how far back in our history you would have to go to find a year where there were, overall, fewer government regulations on the books than the year before. I'm guessing the end of World War II.
Last edited by Hannibal; February 28, 2017, 04:24 PM.
I think it depends on your pay-back period. Nobody whose payback period extends beyond 2020 is likely to take their cues from what happens right now. People won't sink money into long-term projects if they think there will be a regulatory snap-back in four years, or even in eight years. JMO but what businesses want more than light-touch regulation is stable regulation. Or at least that's what I hear all the time. Doesn't apply as much to the financials. Won't need capital investment or a long pay-back period, have that year-end bonus culture that leads to hopping on whatever short-term trend for now. Good fit for this environment.
I think the tax situation is pretty complicated, given international commitments via the OECD and the global tax rewrite underway. It's not clear that simplifying the code will mean less tax paid. But it could simplify things. The repatriation = certainty, and will possibly mean share buybacks.
I will give you one guess on which company in the Dow is powering the rally since the election.
<sarcasm> I am sure it is just an amazing piece of luck that Goldman Sachs has gone up $71.14 a share from Nov. 3 thru 2/24. I mean there is no way that having 5 members in White House. Saying Dodd-Frank is going to be gutted has anything to do with that stock price going up.</sarcasm>
I would be very curious who among the Trumps holds Goldman Sachs stocks/business dealings with them.
2012 Detroit Lions Draft: 1) Cordy Glenn G , 2) Brandon Taylor S, 3) Sean Spence olb, 4) Joe Adams WR/KR, 5) Matt McCants OT, 7a) B.J. Coleman QB 7b) Kewshan Martin WR
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