The Market. But First, Humor. February 6, 2018February 7, 2018 Well, really. Don’t we need some? Scott Pruitt Orders EPA Employees To Stay In Office Over Weekend While It’s Being Fumigated Satire, from the Onion. And then — devoid of any political edge — there was one-time aluminum-siding salesman Rodney Dangerfield, 1921-2004, remembered here. (So ugly when he was born that the doctor slapped his mother.) “Funny, funny stuff,” as Johnny Carson would have said. (Thanks, Brian.) As for the market, it would have been down 50% from November 8, 2016, Trump said last month, if Hillary had been elected. So it would have been 9,100 (down from 18,200) instead of the 26,400 it was when he made that comment. “Fifty percent,” he said for emphasis. “Remember that.” This from a guy who knows something about finance, having bankrupted several companies; yet it’s hard to follow his reasoning. To the extent Hillary’s tax, regulatory, and economic policy would have been largely in the mold of Obama’s and her husband Bill’s, the stock market might have been expected to do well, not collapse. Under Bill, the Dow nearly quadrupled over 8 years (despite tax and regulatory policy Trump hates, but that added 23 million jobs and got our National Debt shrinking relative to the economy as a whole). Under Obama, it more than doubled (tripled, if you measure from March, after the Bush crash bottomed) and added 11 million jobs (millions more, if you net out the millions lost in his first few months of the collapsing economy he inherited). And, again got the Debt shrinking relative to the ec0nomy as a whole. So what is it about Hillary that leads Trump to believe that, in her first year, the Dow would have fallen by 50%? Meanwhile, it may be instructive to note that when Bush 43 took office, slashing taxes on the rich, widening inequality, and ballooning the Debt relative to the size of the economy — as the Republicans have just done once more — the market did rise about 40% at its peak. But this massively irresponsible tax policy led to a crash (the Dow would bottom at 6,500 from its Bush 43 peak of 14,000 or so) and a near global depression. So: Will the massively irresponsible Trump/Republican tax policy lead to a similar collapse? Dunno. But throwing massive tax cuts — mainly for the wealthy and super-wealthy, like Trump — onto an already low-unemployment fire may not to end well. It could lead to higher interest rates, which could lead to a terrible cycle of deficits . . . (when you owe $21 trillion and the cost of borrowing rises 1%, that’s an extra $210 billion a year in interest payments, a little more than we spend on our veterans each year; a 3% rise would add $630 billion) . . . which could drive interest rates higher still. Ballooning the deficit still more. We could print money to try to make up the difference, but that can ignite inflation and drive rates up further still. I don’t think Friday and Monday were likely just minor bumps along an otherwise smooth ride to the moon. My own market exposure is fairly modest, and a lot of it is in stocks like SPRT, that trades around the value of its cash, and BOREF, which is no better or worse a lottery ticket than it was last week. For what it’s worth, the friend who told me he margined his stocks by 30% to buy cryptocurrency claims to have listened and to have cashed in, and paid off his margin loans, just in the nick of time. I hope it’s true.