‘Horrendous Storm’ to Hit Stocks, Wall Street Not Rational
The comments above & below is an edited and abridged synopsis of an article by Stephanie Landsman
If David Stockman is right, Wall Street should hunker down. Stockman, who was director of the Office of Management and Budget under President Ronald Reagan, made his latest prediction after lawmakers grilled former FBI Director James Comey over whether President Donald Trump tried to influence the Russia investigation.
Stockman argues that the latest drama on Capitol Hill is a distraction from the real problems facing the economy. He contends it’s unlikely tax reform and an infrastructure package will become reality in this environment—two business-friendly policies seen as a huge benefit to Wall Street.
In fact, he warns, the country could see a government shutdown in a matter of months. A scenario like that could wipe out all of the stock market gains since the election and more.
Stockman believes the S&P 500 could easily fall to 1,600, about a 34% drop from current levels. He’s made similar calls in the past, but they haven’t materialized.
“There is nothing rational about this market. It’s just a machine-trading-driven bubble that’s nearing some kind of all-time craziness, mania,” he said.