Direct result of the idiotic tax bill

[lapfog_1]

Stocks tumble 500 points.

"It didn't help that the yield on the 10-year US Treasury note rose above 3% for the first time in more than four years Tuesday morning.

If this benchmark bond rate keeps climbing, it may make it more expensive to borrow money for mortgages and auto loans and could eat into profits at big US companies -- especially since the Federal Reserve is expected to keep raising short-term rates."

From CNN

[elleng]

1. Not exactly the cause, but helped.

Here: Trump threatens Iran deal and threatens trade war with Europe, DOW down 500+ pts.

Causation always difficult to prove, but this looks like pretty causative to me.

[bearsfootball516]

2. Unless it causes a continued slide over several days, today's slide doesn't really mean much.

The market has gone up and down 500, 600, 700 points many times over the past few months. It almost always corrects itself over the next few days. It'll really mean something when it just continuously falls every single day.

[leftyladyfrommo]

8. Yes but it is slowly sliding downward.

This is what it did in 2006 or 2007 or whatever. I just watched my 401k slowly go lower and lower. It would go up a little and I would think it was starting to go up again. And then it dropped sone more.

[Blue_true]

10. You are exactly right.

In 2007, the Dow went up and down early on. Though it stayed constant, small investors were getting hammered by the churn. I know because I had gone into cash at the end of 2006 and watched as people suffered loss after loss. Then near the end of 2007, Bear Stearns tumbled from around $60 per share to $2 per share almost overnight and the FEDS had to broker a buyout of the firm to prevent market panic. Bear Stearns was absolved and the market rose again. In around April 2008, Lehman Brothers suddenly went bankrupt and there was no buyout done after the FEDS under Paulson got heavily criticized for stepping into the Bear Stearns situation. After Lehman Brothers, the market would start a sustained swoon downward, with some rallies upward. I watched people's retirement money vanish before their eyes. After President Obama was elected, in around March 2009, I went fully back into the market from my cash position and did well while other people were still coming from underwater, most people would not get flush until around 2012, where some started breaking even.

My point is times are very volatile now. Old line companies are going bankrupt, brick and mortal businesses of all types are closing, I just witnessed a local business that I thought was doing ok from the outside close it's doors for good. A person who provides dental services to me tells of friends that are $1 million or more in debt. At some point, time will come to pay the piper. These are dangerous times to have money in the market, maybe not if one is really young, but people in their fifties and sixties, no.

[IADEMO2004]

3. Caterpillar Inc. lost 6% today. Billionaires needed more billions than U.S. infrastructure.

GOP dumb shits

[gratuitous]

4. This is what grinds my gears

We're taking on a lot of debt for the country. What are we getting for it? We're not able to pay for stuff we want or things we need. We're not upgrading crumbling highways. We're not building state-of-the-art schools. We're emptying the Treasury into the overstuffed pockets of the wealthy. For what? So they can stash it overseas? Buy another yacht? Get a bigger house?

If we were getting something for this massive outlay of revenue, it might make some sense. Instead, we're just handing it over to the greediest motherfuckers to walk the planet with no expectation of any kind of return. The wealthy aren't obligated to do anything to support the country that's giving them so much money, although they are complaining about even now not having enough.

[Blue_true]

11. The economy has weakened over the last nine months.

I look at six things that worked well for me in late 2006 as the economy was headed for trouble, although three are somewhat difficult in a heavy retirement region. The first is the rough percentage of people that use a credit card on Monday or Friday to buy lunch instead of using cash or a debit card. I have been seeing more people buying lunch with credit cards over the last 3 months, that is bad. The second one is the volume of morning rush hour traffic, the more, the better, traffic has been dropping for two months, I see the same with the third, quitting time rush hour traffic. The fourth is the number of people that look idle when I go out to lunch, the number is increasing relative to those that seem to be in a hurry to get somewhere. The fifth is the number of idle working age people that I notice, the number has risen sharply over the last three month. The final one is the number of open bids, this one is sort of technical, I look at the frequency that business people and neighbors change suppliers, contractors, lawn services, ect, more changes mean more of the suppliers available to take the work, in a tight, healthy economy, supplier availability is low or if you do get a new one, a wait time is involved, what I have been seeing, particularly in the last month is business people and neighbors making changes, that means, to me, more suppliers need work.

[Hortensis]

5. "Idiotic," no. This is a major THEFT of national wealth

by Dark-Money Donors demanding return on their investment in Republican-controlled government. And betrayal by the traitors they put in office.

[Ms. Toad]

6. Connect the dots. please?

I found what appears to be the CNN article you are referencing, but it doesn't connect the dive to the tax bill.

[lapfog_1]

7. Easy

Tax reduction without spending cuts have increased the dificit. Dificits have to be paid for with borrowing. Lenders are not eager to loan more at low interest rates. Interest rates and therefore US bonds have to increase yiekds to atttact purchasers - or our lenders.

Increased yields make it more difficult for companies and individuals to borrow meaning more expensive. So... Tax cuts will increase buisnesd costs. Short term windfall and longer term increased operating expenses. Stocks go down.

All predicted by ali velshi before the tax cut

[Ms. Toad]

9. Thanks.

I understand the general economic principles. Is there a specific connection to today's tumble?

[Blue_true]

13. The long bond yield curve may have done something funky.

The yield curve for the long bond (10 year FED notes), is supposed to signal what the economy will be doing 4 to 6 months out. The market declines indicates that whatever the long bond yield curve did signals an economic slowdown coming up.

[Blue_true]

12. The connection is real, but indirect.

Larger deficits increase FED borrowing, which increases long bond yields and that ultimately increase borrowing cost for businesses and consumers. The connection is delayed, but very real.

[Ms. Toad]

14. Thank you

That's what I expected.