Through all these months, even as the VIX continued to hit generational lows, euphoria is the one ingredient which has been missing. It's hard to get a market to top without euphoria because it is an emotion that can’t sustain. Try it sometime, it won’t work. Do you want to know when selling a winning trade? When you start bouncing off the wall, it is a major indication. Stuart Varney from FOX Business is a very good man, a great champion for tax reform this year. But since Friday morning he has been beside himself with glee.
It has been a long year and the two major themes of 2017 collided on Friday. There was a lot of horse-trading going on for the taxes since Thursday night. Will they, or won’t they? By Friday morning it appeared they will when the financial world was interrupted by a despicable report by ABC News. They initially reported Trump directed Flynn to make contact with the Russians prior to the election which fed the Russia, Russia, Russia collusion story. The market tanked despite the fact it looked like taxes were going to get done. As time wore on, people realized that story was not true. Instead, it turned into Trump directing Flynn to talk to the Russians after he won the election. Imagine, a new incoming President directed his top NSA chief to make contact with the Russians!
We’ve talked about the taxes all year. It looks like they will get a win, smaller than many hoped for, but it shows the GOP has a pulse. Stockman was correct to a degree, Congress is so dysfunctional it took until December when it should’ve been done by Labor Day. Until its signed by the President, it's not done but this one is as close as you can get. For my part, I always wondered about McCain, Flake and Corker. Flake and McCain managed to put their personal differences with Trump aside, but Corker would not. Suddenly Corker got concerned about the deficit. He never seemed to be concerned about the deficit when he had insider information to short and crush Fannie and Freddie back in 08 which needed federal bailout money or spread fake propaganda about the nature of their balance sheets when these two institutions started getting well. He certainly didn’t seem concerned about wasteful spending in the years of Net Worth Sweep, those payments to subsidize the insurance companies to keep the failing Obamacare going. But to give the American people a break, in the end, he was not there. So, it passed the Senate by the narrowest of margins, without a single Democratic vote. The American people will remember that as well.