One of the biggest risks facing stocks, according to Goldman - Democrats

‘If there’s a probability or possibility that there could be a unified Democratic administration... then it’s highly likely that the tax cut of 2017 would be rolled back. Then you’re looking at... possibly even up to a 20% correction on the S&P.’


That’s Tim Moe, Goldman Sachs chief Asia-Pacific equity strategist, talking on Bloomberg about what could happen to the stock market if Democrats end up controlling both the Executive and Legislative branches of government in 2020.

The S&P 500 SPX, +0.56% currently sits at 3,110 after another positive close on Friday. A 20% haircut from here would bring the broad-market gauge all the way down below 2,500, a level not seen in almost a year.

And the election is just one of two major risks investors may have to grapple with in the coming year, according to Moe.

The other one, of course, is trade with China.

“The key point would be that the market... has rallied quite significantly on expectations of hope for a trade deal being done,” Moe explained. “Our sense is that the risk reward here is probably negatively skewed. In other words, if a trade deal is done, markets are probably flat to up modestly. But if something doesn’t happen, then I think there’s a bit of price appreciation to give back.”

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A lot of people try to tell us that the party in power doesn't control the stock market and the stock market has nothing to do with the economy. Many things tie into the up and down of the market but policies from the right, and their ideology, is always better. They said Trump would destroy this country if he ran it like a business, another failed prediction by the left. It shot up after Trump reversed Obama's Executive Orders but we were told it was because of Obama's policies that drove it up. It increased because of Trump's tax cuts, but we were told it increased because of Obama's former policies. Almost all of which had been reversed. And the China Trade talk, once China gives in to what Trump wants, will drive the market up even more. This is how you keep America great.

a reply to: LSU2018

Well, being the leader of a direct democracy, then, I'll crash the economy, following that logic.

a reply to: TaninimLong

What is your economic philosophy, Taninim?

Cheers

a reply to: F2d5thCavv2

Any that minimises marginalisation. I am always open to suggestions.

Ideally we would trade and barter. But humankind has a fascination with money. Well, it does standarise exchanges, and is easier to send then a truckload of wheat. Yet, it is clear that the current economic models of most superpowers is inefficient, and leads to the majority being poor - which I qualify as a failure. So, we need a new system. And that's something just one person cannot come up with. I only know that, like most of you, am the victim of poverty, the effect of the broken system. I only know of that particular experience. A new economy is something that has to be brainstormed by many people in that area of study and experience.

originally posted by: TaninimLong
a reply to: LSU2018

Well, being the leader of a direct democracy, then, I'll crash the economy, following that logic.

So you, I'll pretend you're Taninim, will drive up taxes and bad trade deals like American democrats? That isn't going to hurt you much since your population is about 330,045,117 people shy of being the size of ours.

a reply to: LSU2018

Hopefully we can build a system before it's broken. In other words: it's the chance for a do-over.

By the way, every nations start small.

China started as a tribe of villagers. Look at it today.

We can botch all we want about the economy. But if we just started exchanging, and addressing each other's needs, neighbors from neighbors, merchants with merchants, in its own this forms a new system that slowly grows and makes the old system less and less relevant.

a reply to: TaninimLong

Very true, but at this current moment, you're still very small.

originally posted by: TaninimLong
a reply to: LSU2018

Well, being the leader of a direct democracy, then, I'll crash the economy, following that logic.

You must have a currency to have an economy to crash.

Referring to your below post:

The barter system already exists in the US and all economies more than recognized. The use of the word "Trade" soon followed in this :

Barter and trade", no?

Both together just created negotiable notes as handshakes are unenforceable throughout all human history (history because it's written down) and when no record of a transaction (see Sumeria) conflict etc.

Now enters the judging body, a government that wants a piece of "Barter and Trade"...,which, btw deals with other governments with currency, barter and trade.

anyways, good luck.

mg

originally posted by: TaninimLong
a reply to: LSU2018

Well, being the leader of a direct democracy, then, I'll crash the economy, following that logic.

A direct democracy ?
Where is that ?
I know of none ,

They said Trump would destroy this country if he ran it like a business, another failed prediction by the left

He has, with his corrupt business policies...he has Not the country, just the republican party

You base everything on the stock market? If I do not own stock,how does that affect me?

We all know that Goldman has nothing to worry about

The dEmocrats will not hold the Presidency for a very long time now.

We ALL know that.

a reply to: LSU2018

What that industry wants is removal of rules that constrain their ability to make the most reckless of choices to make money.

Usually they end up killing the goose that laid the golden egg. Then entire economy tanks and we are all in trouble.

That's what they don't like Democrats.

originally posted by: tinner07
You base everything on the stock market? If I do not own stock,how does that affect me?

Most people have a direct or indirect interest in the stock market. People with pensions benefit from a rising stock market. The local governments that owe those pensions to govt and union workers benefit as a rising stock market means those pensions are getting higher returns that are paid out to employees. You do realize pensions are invested in the stock market, right?

Mutual funds, 401ks, etc. We all benefit.

The stock market doing well means businesses are growing (hiring people). Loans are being made to both individuals and companies.

originally posted by: tinner07

They said Trump would destroy this country if he ran it like a business, another failed prediction by the left

He has, with his corrupt business policies...he has Not the country, just the republican party

People are getting away from the Republican party just as fast as they're getting away from the democrat party. There's not a name for it, but it's a majority of people who support a candidate like Trump that can't be bought and paid by donors. Trump didn't destroy the R party, if they get destroyed, they did it to themselves.

originally posted by: tinner07
You base everything on the stock market? If I do not own stock,how does that affect me?

No, but it factors into the way things are going for America and foreign relations. I don't own any stock either but it's been a joy watching it break its own record well over 150 times since Trump became president and started reversing the BS and fighting off the left and RINOs.

originally posted by: TaninimLong
a reply to: F2d5thCavv2

So, we need a new system. And that's something just one person cannot come up with. I only know that, like most of you, am the victim of poverty, the effect of the broken system.

Ah yes, a booming economy and record low unemployment among minority groups, time to tear down the entire system and start again because you are poor. Surely if we get smart people to design a whole new system which revolves around the idea of equality it will work, it's not like anyone has tried that and every time it resulted in mass suffering and sometimes the destruction of entire nations... yes it's a sure fire plan, lets abandon the system which has produced the most advanced nations on Earth so we can try some experimental stuff and hope it all works out wonderfully so we can live in a Utopia where all hatred and crime will disappear.

originally posted by: TaninimLong
a reply to: LSU2018

Well, being the leader of a direct democracy, then, I'll crash the economy, following that logic.

You must hate people, since you would kill a whole lot of people and create more wealth disparity.

a reply to: ChaoticOrder

Surely if we get smart people to design a whole new system which revolves around the idea of equality it will work, it's not like anyone has tried that and every time it resulted in mass suffering and sometimes the destruction of entire nations... yes it's a sure fire plan, lets abandon the system which has produced the most advanced nations on Earth so we can try some experimental stuff and hope it all works out wonderfully so we can live in a Utopia where all hatred and crime will disappear.

Now let me see....

If you need equality amongst your citizenry first you need to weed out all of those who show weaknesses like gluttony, sloth, greed, envy, etc.

Then you need to have them all more or less equal in terms of intellect, physical prowess and they all need to have a firm belief that the needs of the nation outweigh the needs of the few...

They should probably be chosen from a single race with a single culture to promote social cohesiveness and uniformity.

We would need to put together a master race and go from there.

What could possibly go wrong with that idea?