Ponzi World (Over 3 Billion NOT Served)

The globalized economy is a colossal Ponzi Scheme in which the vast majority survive on the bread crumbs falling off the table. The possibility of 7 billion people achieving a consumption-oriented lifestyle is zero, so the World Bank conveniently set the poverty line at $1.25/day to legalize global slavery. As long as someone else's children are doing the suffering, it's "all good". Post-2008, this illusion was extended merely by plundering all future generations.

Sunday, February 19, 2017

"Good News, The Tax Crash Is Already Priced In"

The second largest market crash in forty years preceded a corporate tax cut. The largest market crash in forty years was preceded by small cap outperformance...

Both risk factors are now in play...

"The S&P then infamously crashed in October of 1987, for a variety of reasons, one of which, Barclays suggests, was the rapid pricing in of the Reagan tax cuts."

the "S&P 500 has returned 10% since Election Day while consensus 2017E adjusted earnings have been lowered by 1%"

Regarding small cap outperformance:

The average effective tax rate among S&P companies that had posted calendar fourth-quarter results as of Friday was 24.11 percent — well below the current corporate rate of 35 percent

small-cap stocks will be the biggest beneficiaries from a reduction in corporate taxes and regulations.

Rapid pricing in of tax cuts visualized:

Russell 2000 with Futures Open Interest (black):