George Robertson

Let us use SP500 as the (x), the independent, that will define corporate profits (NIPA Table 6, BEA). In Covid lows, SP500 was pricing in a 25% + drop in corporate profits. Trump Liberation is pricing in now a drop of 35% in corporate profits.

The difference is now the context is unchanged from last year and in Covid lows we had end of the world via plague which the risk was eliminated not by vaccine and health policy but by chick in every pot fiscal panic spend. now the context has none of the four horsemen.

only one of the three constitutional articles have gone crazed, article II - all of Article I, Congress is intact and so is Article III, judiciary. none of Trump's policy will stay all will be eliminated by Article I and II. Trump must redo all policy in the form of law.

so we will still have the setting Biden left us - ongoing fiscal spend now not at wartime levels of Covid but unusually high and - this is the most important point - the spending was done in partnership with Congress.

So if Trump's policy is, in constitutional terms, vaporware a crazy political orgy of Y2K like running around with hair on fire, the fiscal spend, as has been since Covid dominates. Nothing in the new budget reduces this spend

unless Trump can drop fiscal impulse down by about 8% of NGDP, the first chart then has the (x) and (y) swapped. (x) becomes corporate profits that part of the economy has most to do with bridging the economy to stocks and (y) S&P 500. indicates stocks now Covid cheap

Everything is politics with value/metrics and monetary economics having little if nothing to do with anything. and politics, for now, is this Trump reality TV show. and the Trump reality TV show is about to be killed by the courts. so everything is the courts now.