A mixed day with the Dow Jones down 1 point (-0.00%) and the Nasdaq up 44 points (+0.57%)

Not much new to report from the stock market, but red ink as far as the eye can see when it comes to budget deficits.

Over the last few years I have argued that Trump’s economic and tax policies will be disastrous for the long-term health of our Nation. Thus far, Mr. Trump has done the exact opposite of what he should have done.

So much so that Mr. Trump’s policies can be summarized in the following fashion. A drug addict going though slight withdrawal symptoms decides to go for it one more time with one giant infusion of pure heroin (tax cuts). And while that might feel wonderful for a moment or two, his impeding flat line is just around the corner.

So is the case with President Trump’s economic policy. He is not making America great again. He is bankrupting the nation at a pace that would make Ponzi operators Greenspan, Bernanke, Obama,  Bush Jr. and Yellen blush.

And we are beginning to see the fruits of his labor show up in official numbers.

US Budget Deficit Hits $530 Billion In 8 Months, As Spending On Interest Explodes

And here a problem emerges, because while Goldman claims that “the deficit path is known to markets, but academic research suggests these effects might not be fully priced immediately… the balance sheet normalization plan is known too, but portfolio balance effect models imply that its impact should be gradual” the bank also admits that “the precise timing of these effects is uncertain.”

What this means is that it is quite likely that Treasurys fail to slide until well after they should only to plunge orders of magnitude more than they are expected to, in the process launching the biggest VaR shock in world history, because as a reminder, as of mid-2016, a 1% increase in rates would result in a $2.1 trillion loss to government bond P&L.

In other words, things will get very ugly soon enough. If you would like to find out exactly when the stock market tanks, based on our mathematical and timing work, please Click Here