Authored by Tyler at ZeroHedge
Having raged against President Trump’s ‘1500-word-airball’ of a tax reform plan, the Reagan administration’s director of the Office of Management and Budget, David Stockman told CNBC this week that Wall Street is “delusional” for believing it will even be passed.
“This is a fiscal disaster that when they [Wall Street] begin to look at it, they’ll see it’s not even remotely paid for. This bill will go down for the count,” said Stockman.
He said White House economic advisor Gary Cohn and Treasury Secretary Steve Mnuchin “totally failed to provide any detail, any leadership, any plan. Both of them ought to be fired because they let down the president in a major, major way.”
Stockman pulled no punches about President Donald Trump…
“You get a black swan in the old days, or maybe you get an orange swan now, the one in the Oval Office who can’t seem to stop tweeting and distracting the whole process from accomplishing anything.”
Reaffirming his thesis that the stock market rally is in serious trouble…
“There is a correction every seven to eight years, and they tend to be anywhere from 40 to 70 percent,” Stockman said recently on CNBC’s “Futures Now.” “If you have to work for a living, get out of the casino because it’s a dangerous place.”
“This market at 24 times GAAP earnings, 21 times operating earnings, 100 months into a business expansion with the kind of troubles you have in Washington, central banks [are] going to the sidelines,” he said.
“There’s very little reward, and there’s a heck of a lot of risk.”
Stockman puts a big portion of the blame on the Federal Reserve, and its ultra-loose monetary policy.
“This is a bubble created by the Fed,” he said.
“We’re heading for higher yields. We are heading for a huge reset of pricing in the risk markets that’s been based on ultra-cheap yields that the central banks of the world created that are now going to go away because they’re telling you that they’re done.”
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