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Nostradamus On Stocks
There is no such thing as chaos. Everything is Predictable.

Thursday, October 9, 2008
Government To Halt Equity Markets, Slash Capital Gains Taxes In An Attempt To Stem Slide In US Equities...

Just as we predicted last month in our September 15th post entitled "Equity Market Being Used As Source Of Funds By Financial Institutions," equity prices have fallen dramatically over the past several weeks as the largest financial institutions across the globe rushed to liquidate their largest positions to meet margin calls, satisfy redemptions, and stave off ultimate failure. Next stage of the meltdown? Watch for a global halt of all equity markets (including all US markets) as all markets are now trading on absolute fear, and watch for the government to propose a MAJOR cut in capital gains taxes in an attempt to stem the slide in equities. This tax cut proposal will likely be THE rally-inducing event the market has been waiting for as the potential return on equities now becomes perceived as significantly higher than that of treasury bonds now producing yields near all time lows. Remember this is an election year and there are a confluence of very strong forces battling it out within the financial system right now....Republicans have wanted to slash capital gains taxes for a very long time now, and with a meltdown in financial markets they now have the excuse they've been looking and the ability to sell the idea to opposing Democrats.