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Trade #5—The Consumer:Obama will get a middle-class tax cut and a stimulus package and in return will mitigate his plans to tax the top 5% of income earners and capital gains. I believe he will split the difference between 15% and 28% and put in a new regime of 21%–22%. In a 1% Fed funds rate environment, this makes no difference whatsoever to institutional investors although it might hit some individuals. And that tax cut is going to pat down credit cards. A stimulus package will also have a modest impact as it will be for longer-term infrastructure projects, and it may even be passed between the election and the inauguration. A third stimulus package will be passed to fund near-bankrupt states sometime later in 2009 simply to sustain programs. Not much new cash is going from Uncle Sam directly to increasingly down-and-out consumers. Recommendation: Short the Retail HOLDERs (RTH), the retail ETF. |
- What's Hot: DELL, DHI November 20, 2009
- Sidewinder: MCD, DKS, JPM November 20, 2009
- Options News: SII November 20, 2009
- Sidewinder: CY, ADSK, KG November 19, 2009
- Options for Dummies November 19, 2009
What are the five rules for constructing great short-side positions? Read on to find out.
10 Reasons to Use ETFs When Trading Options
How do investors and traders cope with a market that has fallen more than 40% in just one year and survive until greener pastures return?
The Bad News Victims of 2008 are the
New Victors of 2009
There were a lot of losing trades last year, but there were also winners for those willing to bet against conventional wisdom -- and this will be the case in 2009, too.
The 10 Dumbest Analyst Calls of 2008
This collection of calls has been easier to write than See Spot Run. My only difficulty has been restraining myself in order to not be sued, punched out or have my tires slashed.
Don't Stop 'Banking' on a Bailout
The Titanic is only just approaching the iceberg. And there aren't enough lifeboats handy for everyone who's going to need one.
