Where Will The Stock Market Stabilize?

People with a PhD in Economics will be able to add a lot of detail, but what does basic Econ 101 tell us about the value of stocks due to the corporate tax reduction?

The old rate was 35% and the new rate will be 21%. If we assume that the value of a corporation is related to net profit* (after taxes), then the old value was 0.65x and the new value will be 0.79x. The change in the stock market should therefore be 0.79/0.65 or 1.215. The stock market should stabilize at 21.5% higher than before the tax cut.

*The idea is that net profit can be either distributed (dividends or stock buy backs) or invested in the business, which would result in greater future profits.

I Can Now Die Happy

Not only did I finally clean and jerk 165 lbs, I got replied to and retweeted by the legendary James Taranto!

Romney lost to Obama and Hillary also lost to Obama. https://t.co/GMDEmXI9C7

— James Taranto (@jamestaranto) January 2, 2018

Another Reminder That The Will Of The People Is Not Reflected In The Laws

Our youngest daughter has just endured another lesson in, Having to do things nobody wants to do and nobody thinks you should have to and yet it is THE LAW.

She took driver's ed over her Christmas break.

Just to clarify, I think most parents would send their kids to driver's ed, even if they didn't have to. In fact, this blogger did that: Due to an older brother that crashed every car my folks owned, I was not permitted to drive till 18--which is when I no longer needed their permission to take driver's ed. It was also the point where it no longer was a pre-requisite for getting your licence. I felt like it would be a good idea and signed up anyway.

The quality of the instruction is notoriously poor. From the stories our daughter told us--the instructor shouldn't be allowed to drive, much less to instruct future drivers. The quality is poor because the customers are guaranteed: You cannot choose not to buy the service.

Around here, few make the logical leap: If it wasn't required, the instruction would be much better. As a result, most kids (mostly due to concerned parents--concern for their automobiles, if not their precious urchins) would still take the courses. But, but, some might not take the classes! Great! So instead of 90% of kids getting great instruction and 10% no instruction, we get 100% getting worthless instruction. For the Win!

End Of Year Sprint

I am just trying to keep up with last year's output and need two posts, today:

Some dad-jokes:

Yeast of Eden--for a bakery

Lumbar Liquidators--for a massage therapy studio.