I am not as pessimistic as you about the political situation.
The statement the treasury, Fed, etc. put out yesterday morning about the banks was pretty clear, and pretty friendly for the markets, IMO.
The stimulus package has some non-stimulus parts but is an improvement over the tax cut only type of stimulus we got from the previous administration, which is almost no stimulus at all.
Obama's declaration that he will work towards decreasing the deficit has some credibility, since he pointed out partially how he will do it: jack up tax rates back to Clinton levels for some of us. I am sure we will also get energy taxes down the road and perhaps some consumption taxes. Decreasing the deficit may not be something that should be done in the middle of a near-depression, but Obama does not want to provoke the bond vigilantes and, especially, he does not want the Chinese joining them -- they have been making a lot of noise lately. I thought that was a smart preemptive move, which also happens to be bond-friendly.
Finally, none of my positions are long term buy and hold. My move is a judgement call that we are near a bounce point. |
