Looks like our priors were correct.  The tax cut is morphing into nothing more than a financial engineering game.   The economics of corporations or the macro have not changed.

Random thought:  We hear much about how the corporate tax cut has changed the game for profits.   Isn’t this just the government jumping into the financial engineering game?  Did the underlying economics of Apple really change?

That is will it increase a companies revenues?  Generate new products?   Will economic profits change, not just accounting profits?  – GMM, March 23

After their earnings release this morning, Citibank closed 3.2 percent off its intraday high and JP Morgan was down over 4 percent from today’s high.

The tax cut has provided no big stimulus, no boost in aggregate demand.   Just moving deck chairs around to increase accounting profits and make room for more stock buybacks.

Economic growth in Q1 expected to come in around Q1 around 2 percent.   Punk at best.

A bigger concern for bank earnings is slow loan growth. At JPMorgan, total loans were up 4% from a year earlier but flat from the prior quarter. At Citigroup, they rose 7% from a year earlier but were up just 1% from the prior quarter.

Bank executives have generally been bullish on the recent tax reform, expecting it to boost corporate demand for loans. The chief financial officers of JPMorgan and Citigroup said Friday they haven’t yet seen much impact, but they both expect companies’ loan demand to pick up later this year.  – WSJ