If Congress can't cut taxes, will market rally fizzle?


New Look at Potential Impact of Tax Cuts on Economy and Markets as Dow Crosses 23,000 for First Time Ever

Gary B. Smith: I'm surprised to hear Mnuchin talk about the market almost like a threat, but whether he meant it or not, and whether he thinks it'll get congress to pass those tax cuts, it's really immaterial. One I don't think there's going to be any resolution or legislation passed this year on tax cuts, so I look back and say what is the market running on? It seems to me, yes earnings are good and Trump's doing a pretty good job of cutting regulation, but it seems to me honestly it's running on fumes. You know people think Dagen, that the crash for example in '87 was a one day thing, it wasn't! It started back in August for crying out loud, and that 22 percent drop we had on Black Monday was a part of an overall 35 percent drop. If we start going sideways and we start tailing off, and then we hear the news about the tax cuts, we could have a pretty awful market.

John Layfield: You look at what happened this week, the market was up significantly on that tax cut news and by the way the White House dropped the tax reform verbiage and switched to tax cuts, so I don't think we're going to get tax reform, I think that's impossible. I think we could get tax cuts, repatriation of money which will certainly help the market. Gary B. is right about something, this is the second longest Bull market in history. And at some point we're going to have a pull back at some point we're going to have a recession, at some point we're going to have a bear market. The difference this time, and that's always scary when you say that, the difference this time is the competition. Look bonds are extremely expensive, there's no yield anywhere else the best place to put your money is in the U.S. equity market. So because competition is so weak, I think this rally continues right now, I'm not sure how far, but I think it continues.

Emily Jashinsky: I think of course if tax reform fails there would be a correction. The significance of that correction would depend on how it fails. Tax reform could fail in a way sort of like health care where it's not completely off the table, it could be picked up next year it could be done at a later date or it could fail in a way in which the GOP Congress is incapable of really passing any legislature at all. And if it fails in that way you could see that correction being more significant because that casts doubt on the republican party's ability to make any economic progress in this country.

Chuck Rocha: Let's take a step back, and under Barack Obama the stock market literally doubled. Now if you bought a puppy in the last few months and named it Donald J., I'm not talking to you, you're not going to believe me anyway, what I'm talking about is, will it double again? And can it do that, I think what Gary B. is exactly right, what is it running on? As a small business man I paid 52 percent taxes last year because I had the best year I ever had because I got to run a presidential race. What's that mean next year? If I got a little relief as a small business man I would hire a few more people.

Jonas Max Ferris: It could be running on higher after tax corporate income, if there's a corporate tax cut that would lower evaluations in the market, by means of corporations paying less tax. What we don't know is how baked in that is, are people really expecting a corporate tax cut that's significant and for it to go through, and if I lose it, for it to cause a crash? In my book crashes happen when the market goes up too fast. There's always a reason and I will say the '87 crash one of the worst ever in a short period of time, one of the leading causes was taxes, they were talking in the ways and means committee about removing tax breaks a distortion for mergers and acquisitions and then the whole market globally crashed because just talking about, which gets to the reform issue. If we had a bad reform package or one that gets to it too quick you could get the market to crash because of action, for example removing IRA and 401k reduction could lead to less money going into the market, removing overnight the mortgage reduction all the sudden home prices adjust, these are distortions that need to go away, but they can't go away fast or that could lead to a crash, so how reform is done over what time frame could definitely lead to a crash if it's done wrong again I don't think a small across the board people sending money tax is going to make a crash or not, but these issues and distortions are big and caused the '87 crash.

John Tamny: Well I think Mike's right; both sides on this subject are hopeless. You don't create markets by government spending more money. Markets quite simply are. And so the idea is if you want health care markets you get government out of the way, markets will form and then through competition in markets price for health care services will go down. The problem is republicans and democrats, health care is easy.

New Questions as FBI Reveal Former Director Comey Drafted Statement Clearing Clinton Before Email Probe Ended

Emily Jashinsky: There may be nothing unusual about it but we need to know the content of the draft that was being circulated around May. Hillary Clinton herself was not actually interviewed until early July yet we know from what the FBI has released in transcripts and in a document itself that James Comey began circulating a draft of a statement that would clear the case that would conclude the case as early as April. That is highly, highly worth looking into he needs to come to congress to testify and explain the content of that draft and why it was being drafted before Hillary Clinton and other witnesses were even interviewed over the course of the investigation.

John Layfield: I think Americans deserve to know the truth, but I don't think they want Congress to get to the bottom of it, because I don't think justice is going to be served. What should have been investigated was the collusion between the Secretary of State and the Clinton initiative, that was never investigated. I don't think anything is possibly going to be done out of this, this is just a waste of taxpayer money, we have $20 trillion of national debt, we have education in inner cities of America that is just in shambles, we have wildfires in California, a disaster in Puerto Rico, there's so many bigger things than dealing with alleged crooks in D.C. If you arrested all the crooks in D.C., we wouldn't have a Congress; let's get something done in our country that matters to the American people.

Gary B. Smith: It does matter, I agree with every single thing that Emily said. I'm going to put myself in the shoes of the average American, their eyes are glazing over honestly, for everything that John said, yes she probably did illegal things, she probably is a crook, but we've been going over this and going over the Russian investigation and now it's the Clinton and the Iranian deals, enough already! We've hashed this out we know what it's going to be, it's congressman and senator on each side show boating for C-Span, it's absolutely ridiculous, should we do it, yes, it's the politically correct thing to say yes, but on the other hand I think as John sums it up, people are just tired of it, get out and do the job we elected you to do.

Jonas Max Ferris: First of all the amount of money it would cost is why it shouldn't be done. The reason why, this seems fishy, there's no question about it, I mean to me Comey seems like a standup guy maybe it's because he's very tall, but I will tell you, you've got to look at these things through the eyes of the Government. Like this is an election year, it's the government, if they're going to have a release that someone's not going to get in trouble they need to get that cleared it probably takes weeks of bureaucracy, this guy's on vacation, he left at 4 o'clock, it's the government, so it's an election year let's say they were going to determine that Hillary was not guilty right before the election, they've got to get that news out immediately, so they had to pre-clear it, when the bureaucracy says it's time to get off her case. A normal investigation in a non-election year into someone running for president they would've just dragged it out for months and months before they eventually let the world know you're not a criminal. You could almost see how this would happen in the world of bureaucracy.

Chuck Rocha: I will say this; I do think people are tired of all of this, but one thing is for sure, if the federal government's ever come up with a jobs program he may have just given me a new business idea because there's nothing but prosecutors and investigators that's something that we employ a lot of here in DC, if you took all of that time and resource and put it towards trying to make lives better like John's talking about with all the natural disasters it would be huge. But like me make this quick point, that yeah Comey probably did something stupid, there's probably something there, to Gary's point, is it really worth going back and doing all of that, the one thing that's for sure, I don't think anybody would say Comey was a Hillary fan and what he did right before the election with putting out the information that he did, not that it might have cost her the election or not but I was in the trenches of that election and it did effect the electorate whether it meant to or not.

Comedian Will Ferrell Stars in New PSA Calling for Device-Free Dinners

Chuck Rocha: Let me tell you about my two grandfathers, I had pap-pa who was Charlie Bussel, and grandpa Pete, who was Pete Rocha. Those are two of the strongest men, when you think of old leather you think of both of my Pappas. They taught me how to be a man at the dinner table, and if you came to the dinner table, I remember pappa saying if you come here this ain't the place for foolishness, this is a place to eat and talk and they literally taught me how to be a man and show respect, we had great conversations we need to get back to much more of that.

Emily Jashinsky: This is great coming from Will Ferrell who presided over one of the best dinner scenes of all-time film history in Talladega Nights with the amazing fast-food buffet so I love that. It's absolutely true like I used to work with students a lot and I do worry absolutely that they're having a really hard time mastering the art of conversation, mastering the art of conversation without thinking about what's on their device, so good for Will Ferrell.

Gary B. Smith: It's hard to disagree with him, but here's my takeaway; stop preaching to us! If it's Jimmy Kimmel, it's Will Ferrell, it's government officials, yes you're all well-meaning! Yes it's all from the heart! Yes it's all emotional! Please, please stop telling us how to live our lives. If I want a TV dinner, with my tray in front of the TV darn it, that's how I'm going to live my life. Just stop already with the manipulation.

John Layfield: Look if I go to Whattaburger with my pal Chuck, or if I go to some fancy restaurant that serves caviar that Gary B likes, I don't need my phone cause they are fun people. Phones are made for boring people, I eat dinner with a lot of boring people and if it wasn't for my phone I would have to talk to them, so let me carry my phone with me.

Jonas Max Ferris: This is a huge problem, the way the tech industry is dominating our brains, it will be 24/7 at some point if we don't put it aside. We're not getting smarter from all the super computers in our hands, we're getting dumber, it's not learning, it's infotainment, it's got to stop, it's a huge problem.



John Layfield: VERIZON (VZ)