Why Does Wall Street Not Fear ‘Mr. Smoot-Hawley’?

With all of the bullish hubris over tax cuts and deregulation anticipated under Trump, his threatening stance on tariffs seems to be of little concern on Wall Street. It ought to be, however. Historians have come to accept more and more that the Smoot-Hawley tariff, enacted in the summer of 1930 after a knock-down, drag-out battle in Congress, played a key role in precipitating the 1929 Crash and the Great Depression. Some have gone as far as tying the stock market’s ups and downs prior to the crash directly to news stories about Smoot-Hawley’s progress on Capitol Hill. The results are eye-opening, suggesting as they do that Wall Street was obsessed with the legislation. On days when its approval seemed in doubt, stocks rallied; and when passage appeared more likely, they fell. So why are investors and traders seemingly oblivious to the menacing trade-policy declarations of a president who personifies the very spirit of Smoot-Hawley? It’s a good question — one for which I have no compelling answer. Could it possibly be because speculators today are even more insane than their 1929 counterparts?

  • none March 24, 2017, 5:50 am

    Sentiment is driven by what is not there for the future and causes the majority to do the exact wrong thing at the exact wrong time. This is what makes the trading or sentiment cycle.

    The Pluto Cycle is fully engaged toward the longer-term cycle for the outcome, which the ‘actor’ is fully in change of the trend as this can be seen clearly on its pie chart.

    The finial cycle of 240 or so years starts and begins with what we do, that is to study the pass to avoid it, but in reality that is why we repeat it, because we observe and study it so much.

    The recent Brady cycle suggest Trump Low is dead ahead and inverse markets are on a major 1/2 decade turn upward, only the start of the worst is coming dead ahead.

    The trend for continue government, political and private sector failure is solidly in place, ‘failure’ is the trend to observe and markets that respond from such sentiment are the buy side of the new long trend.

    The great Black hope, and now a great White hope will continue the trend of failure solidity in place.

    Have a great weekend Rick and keep up one of the best thinking sites on the web going.

    Inverse markets are below they are Buy Side markets new trend upward:

    EC,AD,BP,CD,JYP,GC,SI,ZB/ZN,ED (euro dollar).