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Economic Review |
12/01/08 Will it be an Auto Bail Out to keep the Equity upside going? Over the past shortened holiday week it was simply the process of printing money and throwing it at such names as Citigroup that managed to provide some upside to the beleaguered Equity sector. However, as the dust has settled, some of the negative ramifications have surfaced. Case in point was Germany’s Merkel who criticized US policy makers for potentially destabilizing the US$ due to the creation of cheap money used for bailouts. So what will keep the recent positive tone to Stocks going? Well, we’re now in the month of December (November went by like a blur) and it’s time for policy makers to address the ailing and desperate US auto industry. Remember, it was the “in your face” attitude by policy makers to the CEOs of the big three that sent the US Equity markets spiraling down. The heat is on as well as analysts from all walks are screaming that the Auto industry should be a shoe in for a bail out plan given all the money being thrown at the financial sector. So what’s the bottom line? Well Paulson will be leaving soon and many are calling for Bernanke to go as well (which would probably be a good thing)….so why not print money and put a short term boost in the US Stock sector and let the future administration deal with the creation of cheap money? Let’s see, it was policy making like this that got us into this mess in the first place. |
Stephan Kudyba (MBA, PhD) THE MARKET DOCTOR |
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