Day: January 31, 2008

Looks Like Failed Rally

Notice the rally on light volume and today’s reversal on high volume. This action came on the Fed’s fifth rate cut in the past 4 1/2 months. Wednesday’s 50bp move, coupled with last week’s emergency 75bp move, marked the first time the Fed cut rates so much and so fast in over 25 years. Can you say failed bond insurers. Cheers.

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Article: Stimulus Gone Bad [Bushenomics]

From the New York Times:

January 25, 2008
Op-Ed Columnist
Stimulus Gone Bad

House Democrats and the White House have reached an agreement on an economic stimulus plan. Unfortunately, the plan — which essentially consists of nothing but tax cuts and gives most of those tax cuts to people in fairly good financial shape — looks like a lemon.

Specifically, the Democrats appear to have buckled in the face of the Bush administration’s ideological rigidity, dropping demands for provisions that would have helped those most in need. And those happen to be the same provisions that might actually have made the stimulus plan effective.

Those are harsh words, so let me explain what’s going on.