SMELLING SOMETHING ON WALL STREET
By David Stockman
Whatever small gains in reported corporate earnings that might result from the eventual Trump tax reforms is certain to be more than wiped out by the next cyclical downturn in the U.S. economy; and at 92 months of age, this so-called cycle is more than long in the tooth.
Corporate tax collections were down by 9% and excise collections by 3%. Those are signs of faltering business activity that is likely to weaken even further as the vaunted Trump stimulus morphs into the fiscal bloodbath that lies directly ahead when the current debt ceiling holiday expires on March 15, and the GOP Congress is required to vote to raise the debt ceiling to upwards of $21.5 trillion just to get through the next year. That’s not going to happen. What will happen is an extended period of legislative mayhem and multiple threats of government shutdowns and the potential need for the U.S. Treasury to actually prioritize and allocate in-coming revenues absent new borrowing authority. Needless to say, that will cause pandemonium in the casino, and trigger another round of panicked dumping of excess inventory and labor in the C-suites of corporate America.