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As the Dow drops value today and last week’s two ending days of trading, the questions I have are –

  1. Dissonance in the economy shows up in job losses, layoffs, store and business closings, bankruptcies, share dividends being increased as well as execs bonuses even as those bankruptcies are underway or about to be underway, is this normal?
  2. Dow is overvalued from synthetically adding tax cuts into the revenues, but layoffs at those same companies receiving massive breaks on taxes are still occurring along with restructuring despite profitability, is that the way business was expected to respond to those tax cuts and if not, why not?
  3. As the Dow drops over the last three trading days in significant shifts, rumors of increased bond rates are hovering in the financial press outlets, but has that happened or simply feared?
  4. Did these large point drops in the stock markets happen because US markets are having international resources and investors pulling out of our markets or is it associated with the recent news which occurred on the same day as the first slide, that the US will have to borrow double (or more) than what was expected.
  5. Is the volatility in the US dollar that has been seen since just before Davos a couple weeks ago along with Trump and Mnuchin said about it created part of an image that the US administration is intentionally manipulating currencies and with the refusal to continue Yellen at the helm, obviously intending to manipulate markets as well through raising interest rates arbitrarily.CricketDiane 2017 NYC Wall Street Stock Markets 1DSC02119-2
  6. My other significant question – have any dollars or profits been repatriated to the US economy and employment picture at all as promised by the GOP and Trump with the tax cuts that knocked $1.5 Trillion dollars from our infrastructure that is most heavily impacted by those same businesses, and from our economy if those tax savings are moving elsewhere as well?

Found a few things about this trying to answer my questions today and thinking about what it all will mean for our real economy and people’s lives. It is more than hits to people’s 401K’s that is happening here and the Dow’s massive sudden slide is just an indicator of what is significantly changing in our economy right now.

  • cricketdiane, 02-05-2018

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US on track to double borrowing in Trump’s first full fiscal year: report

http://thehill.com/policy/finance/372235-us-on-track-to-double-borrowing-under-trumps-first-year-report

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Stock Markets Tank, Extending Sell-Off

The Standard & Poor’s 500-stock index was off by nearly 4 percent on Monday. The weakness built off the previous week, when stocks had their worst performance in two years.

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According to the Guardian UK –

Stock markets continue to fall amid interest rate hike fears

US Federal Reserve expected to increase rates at faster pace than planned

Wall Street joined a rout of global stock markets, tumbling by more than 450 points by about 6.30pm (GMT) as investors contemplated the end of an era of cheap lending by central banks to boost growth. The slide in share values of America’s largest industrial businesses followed the dumping of shares on stock markets across Asia and Europe earlier in the day.

In London, the index of Britain’s top 100 companies stretched its longest losing streak since last November into a fifth day, following a 1.3% fall. The FTSE 100 index tumbled to 7,345, having peaked at almost 7,800 last month.

https://www.theguardian.com/business/2018/feb/05/stock-markets-continue-to-fall-amid-interest-rate-hike-fears

 

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New Fiscal Worry: Too Much Short-Term Borrowing as Deficit Climbs

Change is in response to the Federal Reserve’s moves to shrink bond portfolio and a fiscal outlook

Updated Jan. 31, 2018 6:27 p.m. ET

https://www.wsj.com/articles/treasury-plans-to-increase-size-of-debt-auctions-1517408688

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One quick note –

BTW, when bonuses are given to execs – it doesn’t stimulate the economy, nor provide profits for the company, nor sales because executives are not the ones buying the products and services that most companies and industries provide. Aside from the fact that ten executives with millions are not going to spend what 800 – 8,000 families spend with any corporation across all the markets the company serves. Just a thought.

  • cricketdiane

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