Stocks Churn; Bitcoin Crashing

Following Monday's start-the-week-off-right rally, stocks have gyrated about the flatline the rest of the week, signaling that a good number of major players have already left the exchanges for holidays and that the recently-completed tax reform bill has been almost completely priced into stocks.

Thus, we're left with little other than churn as the days before Christmas dwindle to none. There are likely to be few surprises on Wall Street as the week closes out, though overnight, the cryptocurrency world had plenty upon which to contemplate going forward.

Bitcoin, the gold standard of cryptos, crashed below $13,000, marking a 17% drop in less than the past 24 hours.

A number of suspect factors are to blame for its recent demise, those consisting largely of rumors and some fact, such as large "whale" investors getting out while the mania is still hot, the emergence of Hashgraph, which was of mention here yesterday, and the abrupt realization by more than a few people that Bitcoin - due primarily to the severe slowness of clearing transactions and the unwieldy large amount of computing power necessary to mine coins - is unreliable and unworkable as a currency.

Within a short time, it's highly likely that bitcoin could be trading in the hundreds of dollars rather than in the thousands. Recall that its current price was largely achieved in just the past 12 months, growing from sub-1000 at the start of the year.

Other cryptos are being mercilessly battered, led by IOTA, down nearly 40% overnight, denoting the downside of 24/7 markets.

What goes up, must come down, and that is the lesson for the day. Stocks will also suffer at some point, though betting on that happening has been a fool's game since the worrisome days of 2008-09.

For now, it looks like a quiet day of trading stocks ahead, with downside risk prominent.

At the Close, Thursday, December 21, 2017:
Dow: 24,782.29, +55.64 (+0.23%)
NASDAQ: 6,965.36, +4.40 (+0.06%)
S&P 500: 2,684.57, +5.32 (+0.20%)
NYSE Composite: 12,800.21, +52.66 (+0.41%)

Wall Street Yawns at Tax Reform; Hashgraph May Supercede Bitcoin

Wall Streeters aren't completely happy with the tax reform package that passed both houses of congress on Wednesday, despite howls of victory from assembled Republicans at the White House. If they had, the "sell the news" trading of the past two days would have been overwhelmed by a furious buying frenzy as US corporations see their federal tax burden reduced from 35% to 21%, below the world average.

While the politicians are happy back-slapping each other and highly paid traders on Wall Street see their tax burden increase due to the loss of some deductions for local taxes (SALT), there are bigger, less-well-defined events occurring far from DC or New York.

Bitcoin and other cryptocurrencies are all the rage, now that the CBOE has gotten into the game with bitcoin futures trading, assuring that the financial genii that DID NOT invent blockchain technology will be able to participate.

That's all the more reason that crypto is soaring, both in value and interest. The promise of the blockchain was initially to exclude current government and financial entities (banks, brokers, exchanges) from transactions, freeing up the new "money."

That has changed, but, outside that, a newer, potentially even more disruptive idea has emerged: Hashgraph, which speeds up transaction processing by light years over Bitcoin and provides even better security and privacy in a distributed ledger environment.

It's the latest development in a fast-changing game and deserves full attention to anyone who is thinking about freedom. Mike Maloney has put together an interesting look behind the scenes of the crypto world in his latest installment of the Hidden Secrets of Money (Episode 8) in Bitcoin to Hashgraph: The Crypto Revolution.

The video is over an hour long, but it should be tops on every Christmas list for thinking individuals, silver and gold bugs, heads of companies and anybody looking for better solutions than tax brackets, thousands of pages of federal tax code (estimated at over 70,000), a puzzling phalanx of rules, regulations and confusing calculations all of which are the bread and butter of the stock market and fractional reserve skimmers.

A day will come when stock prices, interest rates, and tax considerations aren't the most important financial parameters. That day is coming sooner than many people with knowledge want to accept.

Happy (Hashgraph) Holidays.

At the Close, Wednesday, December 20, 2017:
Dow: 24,726.65, -28.10 (-0.11%)
NASDAQ: 6,960.96, -2.89 (-0.04%)
S&P 500: 2,679.25, -2.22 (-0.08%)
NYSE Composite: 12,747.55, +0.01 (0.00%)

Stocks Slip As Congress Readies Tax Bill For President Trump's Signature

In what can only be described as a premature "buy the rumor, sell the news" moment, stocks gave up early gains and ended uniformly on the downside as the House and Senate passed the tax reform bill that's been the focus of news and speculation the past three weeks.

With only a minor tweaking needing to be handled by the House on Wednesday morning, the bill will travel to the president's desk for his signature, confirming a promise to have a tax bill before Christmas and essentially ending the individual mandate for the Affordable Care Act (Obamacare) by reducing the penalty for not having health insurance to zero ($0.00).

The inclusion of the mandate-crushing language in the bill was a masterstroke for Republicans, who failed to repeal (and replace) the morally-flawed Obamacare legislation earlier in the year, but manages to effectively make non-compliance a victimless violation.

While Democrats are furious over this development, which will undeniably send premiums even further into the stratosphere, those millions of people who neither can afford nor need healthcare coverage (think healthy people in their 20s through 50s) will be freed from the tyranny of a law that never should have been.

Otherwise, the tax reform legislation is great for corporations and marginally good for individuals, depending upon income level and family size. Overall, the fresh 500 pages of tax code will likely make the United States more competitive in global markets and put more money in people's pockets.

Wall Street, which has been pricing in the tax plan nearly every day in December, is poised to take its gains, take a few days off, and continue next week with a bona fide "Santa Claus rally" which will extend the gains for the year.

If stocks take the indicated course, January should commence with some serious tax-selling profit taking. After that, it's anybody's guess how much longer the bull market can continue.

At the Close, Tuesday, December 19, 2017:
Dow: 24,754.75, -37.45 (-0.15%)
NASDAQ: 6,963.85, -30.91 (-0.44%)
S&P 500: 2,681.47, -8.69 (-0.32%)
NYSE Composite: 12,747.54, -38.28 (-0.30%)

With Rubio and Corker Backing Tax Plan, Stocks Take Off

Maybe the scuttlebutt about Senators Marco Rubio (R-FL) and Bob Corker (R-TN) being persuaded to vote for the long-awaited tax reform plan circulating in the congress caused stocks to career higher on Friday, but the more likely catalyst was probably much more mundane: the expirations of options on a quad-witching day.

There were certainly a boatload of long bets on individual stock and index options, and, since the market is so overtly controlled by a handful of "whales" it was simple business to boost stocks throughout the day no matter what the news of the day portended.

Anybody who doesn't believe the market is rigged to go higher - incessantly - in support of central bank plans to intercede in global markets by buying assets and printing fiat, is simply fooling themselves.

Thus, bears have been declawed, pension funds and IRA are becoming whole (or, at least less underfunded) and top stock holders have been handed capital gains on a silver platter with little to no effort or brainpower on their parts.

Since congress appears poised to pass the pending tax legislation in the coming week, investors are sure to get a gift-wrapped Christmas present in advance of the give-away holiday.

2017 will go down in history as one of the best ever for stock market investors. The major averages are well into the green and some individual stocks are boasting gains of 30, 40, 50 percent or more.

Happy Holidays. Keep Dreaming.

At the Close, Friday, December 15, 2017:
Dow: 24,651.74, +143.08 (+0.58%)
NASDAQ: 6,936.58, +80.06 (+1.17%)
S&P 500: 2,675.81, +23.80 (+0.90%)
NYSE Composite: 12,699.68, +70.61 (+0.56%)

For the Week:
Dow: +322.58 (+1.33%)
NASDAQ: +96.50 (+1.41%)
S&P 500: +24.31 (+0.92%)
NYSE Composite: +56.62 (+0.45%)

Stocks Stumble As Marco Rubio Voices Concern Over Republican Tax Plan

Appropriately, with the latest installment of the "Star Wars" franchise opening in cinema theaters around the country, Wall Street sensed a disturbance in the "force," the force being Janet Yellen and her merry band of storm trooping central bankers, the disturbance being upstart senator "little" Marco Rubio, who inadvisably pondered that he may not cast his vote in favor of the magnificent GOP tax plan that's been bandied about the halls of congress for months.

The former presidential candidate and current senator from Florida, Rubio voiced concerns over a minuscule detail in the overall grand scheme, the child tax credit, and on Friday morning made it clear that unless the amount of the credit that is deductible ($1,100 of $2,000) is increased, he's voting against the plan.

Notwithstanding Rubio's need to be seen, heard and appear important on occasion, his grandstanding is purely designed as entertainment value over the weekend for the cable news outlets. A final rollout of the bill and votes will come next week, just prior to congress' two-week holiday vacation.

Also adding to the folly is John McCain, who was hospitalized this week with complications from his cancer treatment, may not be present for a vote, should his condition worsen. Republicans cannot survive more than two defections, and Senator Bob Corker, the statist senator from Tennessee is staunchly opposed to the measure, purely out of hatred for president Trump.

Failure of the bill's passage would be a blow to Wall Street being that the measure approves a reduction of corporate taxes from 35 percent to 21 percent, something for which major corporations - many of which pay little to no federal tax already - have been lobbying for years.

Thus, with doubt overshadowing the happy passage of bellwether legislation, stocks took a notable turn for the worse on Thursday. The loss ended a string of five straight days higher on the Dow, and an overall run-up from 23,200 to beyond 24,600 over the past month.

As is the usual case, there's probably nothing about which to worry, since the Fed has Wall Street's back, front, and middle, and little tolerance for anything more than a few hundred point drop on the hallowed Dow Jones Industrial Average.

With Christmas a little more than a week away, neither congress, the Fed, nor Wall Street want to appear as Scrooges or Grinches, much less a poor likeness of Darth Vader or the death planet, especially with heavy upside bets on options and futures, which expire today. Trying not to mix metaphors - but failing badly - Friday is a quad witching day.

Happy trading, and happy Friday.

At the Close, Thursday, December 14, 2017:
Dow: 24,508.66, -76.77 (-0.31%)
NASDAQ: 6,856.53, -19.27 (-0.28%)
S&P 500: 2,652.01, -10.84 (-0.41%)
NYSE Composite: 12,629.07, -70.41 (-0.55%)