Obamanomics
Investor Research for Online Investors

by John Dalt

02/11/09

If, and when a stimulus package passes both houses of congress it will signal the absolute stupidity of government. The $800 billion expected price tag would bring the total government commitment to over $9.7 trillion dollars to solve the financial crisis. That is enough money to pay off 90% of every home mortgage in the United States. In addition, what do we have to show for it? Money for every democratic special interest group; from the unions to ACORN. The market will recover, but it is going to take longer and be a deeper recession because of it. I hope the democratic socialists have not started the spiral that led Japan into the lost decade in the ‘90’s or the socialist ‘New Deal’ that impoverished our country in the ‘30’s.

OH! Bama is quick to rattle fear in the public, “We are facing another great depression”.  Not quite Mr. President, unemployment climbed to over 20% in the great depression, after FDR interfered with the free enterprise system.  The President never mentions the recession caused by Carter when interest rates, unemployment, and interest rates were all over 10%.  President Reagan cut taxes and the federal budget.  This put people back to work and began a productive recovery.  Too bad the democrats that took over congress could not control their spending.  From ’82 on every extra tax dollar was spent plus some more.  Today we are going to pay people not to work.  If you would like to read about Ronald Reagan and how he fixed the economy, the Wall Street Journal had a great article.  You can read it here.

Did you watch the President’s News Conference the other night? It was called a ‘news conference’ so the networks would not have to provide equal time to republicans. I noticed the president calling on reporters, which seemed odd. It was completely staged. The president had a prepared list of reporters to call on. So much for open government. If you are not called on, you cannot ask hard questions! You can read about it here. 

We did not make any new trades today.  The market bounced above support.  We are dependent on news to move.  I have no confidence in the government, and am not quite sure how the market will react to the stimulus bill when it passes.  There is a good argument for a bullish reaction; it is a lot of money floating around.  I have laid out the bearish argument above.  We shall see how traders vote their pocketbook.

Gold and silver had another good day.  Chris Dodd said that ‘mark to market’ was going to be addressed.  When it is, go long financials, I like XLF or FAS for real mojo(3X).  Crude oil sank to new lows.  I am anxious to get on the oil trade as a Swing Trade, but the inventories keep building, length of supply is longer, domestic production is up, and imports are down.  OPEC’s production cuts are having less impact!  The time will come; it is just not here yet.  Below are graphs for your information that paints the picture.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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