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b"Market Rallies on News of Passing Tax Cuts Act
\\nLate Friday night, or I guess early Saturday morning, the Senate passed its version of the Tax Cuts and Jobs Act.\\xa0 Last week the market, as it became more apparent that the Senate was in fact going to pass the bill, the market was rallying, and continued to rally and, in fact rallied again today.\\xa0 This was the first chance the market had to react to the Senate actually passing their version of the bill.
\\nDJIA Up, NASDAQ Down
\\nAt one point today: the DJIA was at 24,534, that's the new record high.\\xa0 It had surrendered most, if not all the gains by the close.\\xa0 The Dow closed up only about 58 points - still, a new record close at 24,290.\\xa0 The NASDAQ, on the other hand was down as the correction, and maybe the beginning of a bear market (we don''t know yet).\\xa0 The correction in the technology sector continues. The NASDAQ was down 72 points today.\\xa0 Although, even when the Dow was up 250 points earlier this morning, the NASDAQ was still down about 50 points.\\xa0 So the tech stocks are weak. The S&P ended up negative on the day, although it hit a record high intra-day.
\\nWho Benefits?
\\nPart of the justification for the markets rallying is the tax cuts. If corporate taxes are going down, then your after tax earnings are going up, and since stocks' value is in theory a function of their after tax earnings, if your after tax earnings goes up, then all else being equal the stock is going to be more valuable. But clearly taxes that are not earning money will not benefit from lower taxes.
\\nRepublicans Abandon Any Pretense of Smaller Government
\\nI wanted to get into an analysis of the Senate version of these tax cuts. There was one Republican senator who voted the Tax Cuts and Jobs Act, of course all the Democrats voted against it, but Senator Bob Corker, who voted against it on the principle of\\xa0 \\xa0adding to the debt.\\xa0 There were some interesting rumors floating around last week that in order to get Corker to vote yes, they considered adding an automatic trigger (implementation\\xa0 seemed crazy to me, and that's why they did not do it) that if the tax cuts did not pay for themselves or the deficit got bigger, an automatic tax increase would be implemented.\\xa0 What disturbed me the most about this, is:\\xa0 Why would there be automatic tax increases, why not automatic spending cuts? Why not say that if the tax cuts don't pay for themselves, we'll cut spending in order to pay for the tax cuts?\\xa0 If this doesn't tell you that the Republican party has completely abandoned any pretense of wanting smaller government, I don't know what does.
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