Politics

First it was the Chinese, now it’s the Europeans, as the rest of the world is suddenly very unhappy with the prospect of US tax reform (or maybe it is an unexpectedly strong US economy). As we discussed yesterday, with the historic Trump tax reforms on the verge of passage and the Fed’s dot plot signalling another 7-8 rate hikes (soon to be revised much lower), China is nervous that the capital outflows, which it thought it had bottled up, might be about to return.

Juist minutes after hope for Senator Cornyn on the tax bill deal sent stocks to new record highs, Senator Rand Paul threw cold water all over the government shutdown budget bill with a tweet, sparking algos to sell on the "Paul says no" headlines.

I cannot in good conscience vote to add more to the already massive $20 trillion debt. I promised Kentucky to vote against reckless, deficit spending and I will do just that. pic.twitter.com/BUYqm91mli

Over the past 10 days we've learned a lot about FBI agent Peter Strzok, a man who very likely would have lived the remainder of his life in relative obscurity as an FBI counterintelligence agent but for his sudden dismissal from Special Counsel Mueller's "Russian Collusion" investigation.

Despite numerous headlines indicating a tax bill deal early next week, Republican Senator John Cornyn just told media that there "may be a tentative tax bill deal today." Algos liked the news and immediately bid stocks higher (despite no knowledge of what is in the 'deal').

“It’s possible,” John Cornyn, the No. 2 Senate Republican, tells reporters of tax bill, according to Bloomberg.

 

The Senate has “ping-ponged” offers back and forth with House and is making good progress, he says.

Yesterday, we highlighted a one-page report prepared by the Treasury Department which claimed that – in what was perhaps one of the most unrealistically optimistic budget projections to ever be produced by the US government agency - the Senate’s version of the Republican tax plan would, somehow, bolster GDP to a 2.9% real growth rate over 10 years.