Enviado: 26/3/2003 15:38"Senate's Tax Plan Slash Guts Expectations"
By James J. Cramer
03/26/2003 08:52 AM EST
The Republicans in the Senate blew it. They just bungled this tax package. They didn't even wait for Zell Miller, a Democrat who endorsed the tax package, to get back to Washington to vote for it.
Unfortunately, the result for the stock market is a spoiling of some of the fruit that would be had after the war. Alas, we have the first tangible setback in the longer-term scenario that a postwar Iraq could have given us. I can't mask it; if I thought that the dividend tax plan was a positive -- and I did -- I can't suddenly decide that the scrapping of the plan is a positive. It's a big negative, and the allies of the president in Congress really may have blown this one. (I am interviewing Bill Frist tonight on "Kudlow & Cramer" to confirm this, but I wanted to give you a head's up.)
I had hoped we could win the war in Iraq swiftly. That would have given the president enough clout to pass the tax package, which would have given dividend relief to many investors. The idea was that the market could reignite if people were given an incentive to rejigger their portfolios toward dividend-yielding stocks. This still might happen, but the vote Tuesday made it less likely.
Does that mean the bullish scenario is no longer bullish? No, but I am a realist. If we were going to see 20% gains this year, we needed to have the war end swiftly and the full tax package pass. The war still may end soon, but the tax package won't be passed in full.
For me, that means lowered expectations. I have felt that we would have a year of only 8% plus or minus if we don't get that package, vs. 20% if we did. As it becomes clear that we aren't going to get it, I have to readjust my sights for what we can get.
So much of what is happening in the stock market right now is being controlled away from the stock market. I still believe that much of the virtuous cycle is intact: Oil will go lower, confidence will be boosted, spending will be boosted. But the part of the cycle that includes a change in the way people invest, more toward dividend-yielding stocks like those in the Dow, suffered a big blow Tuesday.
Not good. Not what we wanted. Readjust downward on the fly. Hopefully, the markup mavens, who should be back today, will give you a chance to let some stock go into some strength if you are as disappointed as I am in how this stuff turned out in Washington. Amazingly, it didn't have to be this way. The GOP did have the votes; it just didn't know how to pull it off! "
(in www.realmoney.com)
By James J. Cramer
03/26/2003 08:52 AM EST
The Republicans in the Senate blew it. They just bungled this tax package. They didn't even wait for Zell Miller, a Democrat who endorsed the tax package, to get back to Washington to vote for it.
Unfortunately, the result for the stock market is a spoiling of some of the fruit that would be had after the war. Alas, we have the first tangible setback in the longer-term scenario that a postwar Iraq could have given us. I can't mask it; if I thought that the dividend tax plan was a positive -- and I did -- I can't suddenly decide that the scrapping of the plan is a positive. It's a big negative, and the allies of the president in Congress really may have blown this one. (I am interviewing Bill Frist tonight on "Kudlow & Cramer" to confirm this, but I wanted to give you a head's up.)
I had hoped we could win the war in Iraq swiftly. That would have given the president enough clout to pass the tax package, which would have given dividend relief to many investors. The idea was that the market could reignite if people were given an incentive to rejigger their portfolios toward dividend-yielding stocks. This still might happen, but the vote Tuesday made it less likely.
Does that mean the bullish scenario is no longer bullish? No, but I am a realist. If we were going to see 20% gains this year, we needed to have the war end swiftly and the full tax package pass. The war still may end soon, but the tax package won't be passed in full.
For me, that means lowered expectations. I have felt that we would have a year of only 8% plus or minus if we don't get that package, vs. 20% if we did. As it becomes clear that we aren't going to get it, I have to readjust my sights for what we can get.
So much of what is happening in the stock market right now is being controlled away from the stock market. I still believe that much of the virtuous cycle is intact: Oil will go lower, confidence will be boosted, spending will be boosted. But the part of the cycle that includes a change in the way people invest, more toward dividend-yielding stocks like those in the Dow, suffered a big blow Tuesday.
Not good. Not what we wanted. Readjust downward on the fly. Hopefully, the markup mavens, who should be back today, will give you a chance to let some stock go into some strength if you are as disappointed as I am in how this stuff turned out in Washington. Amazingly, it didn't have to be this way. The GOP did have the votes; it just didn't know how to pull it off! "
(in www.realmoney.com)