The $750 Billion Question

When history is written, the current US economic stimulus package will clearly receive a lot of attention. The $750 Billion question will finally be answered.

The question is if, when, and by how much will the stimulus positively impact stock prices and liquidity through increased bank lending? So far, the first indication is that the TARP has been a profitable investment with gains in preferred stock, warrants and troubled securitized loans. In other words, the amount of the bailout to be funded by taxpayers has declined.

One stimulus to possibly occur to help the situation is the recurrence of the “January Effect” in 2009. The January Effect is a frequently occurring annual market anomaly indicating that stock market returns in the month of January are consistently significantly higher than in other months of the year. While this is not guaranteed to occur every year, January is most often the best month for stock price appreciation.

This anomaly is often credited to year-end tax-loss-selling by investors, followed by buying securities back in January. If we witness this trend in 2009, then we should also experience a corresponding improvement in the economy and further gains in TARP returns.

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Comment by su yure

2009-02-08 10:20:11

JUST IMAGINE…
I am not for sure on the math…( I could not find a calculator that would go up past 750,000,000,)…
but, here goes…
How about printing up the 750 billion and either giving every one in the USA 2.5 million / or giving every one in the world 1 hundred thousand.
Of course we would not have the welfare system, Medicare, Medicaid, social security, pension plans, retirement plans, and a bunch of other plans that are draining the system. There would also be a problem with immigration if we keep it all to our selves. And you know that some would use the monies to buy lottery tickets and blow the whole thing..
SO, no more lottery… Those that spend it foolishly would in turn be required to take responsibility for their actions and some would turn to stealing and other illegal action. We have that now any way.. I believe that those that have a passion for their work would remain working and others would fill in the gaps rather than stealing.
I could go on but I will let you play this out in your own mind.
At the very least I think it would be a world wind party, even for those that already have lots of money and really do not need more.
JUST IMAGINE…

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