The Day 2010 Budget will be Released

Politics is Why You Should Buy

March 11th, 2009

President Obama has recently proposed a budget outline for 2010 that contains some programs he feels will balance social issues with growth in our nations economy. His political capital will not be enough to carry the day if the stock market hangs in mediocrity.

Individuals are starting to wake up to the fact that their investments into 401K have lost much more than proposed tax cuts for those who make less than $250,000 will gain. President Obama’s political capital will have to remain at it’s current levels to have any hope of getting the budget mostly intact through the congress.

For that reason alone I think you will see and hear many policies released over the next 3-4 weeks, prior to the release of the full 2010 budget proposal, that will but the nations financial institutions back to work.

You are already hearing about the reinstatement of the up-tic rule which will slow market decline by placing rules on the short sellers. You are now hearing about the possibility of modifications to the mark-to-market accounting as it relates to the toxic assets. I expect other policies to be announced in the short term which will endear the president’s administration to Wall Street.

I think you will see each of the major banks report higher earnings and increase in capital for the second quarter of this fiscal year. It is when you have the market report of those banks gains released in the first week of April you will see the bulls take hold of the market and we will see 4 continuous days of market gains. It is then President Obama will release the full budget proposal details with what will be reported signs the economy is back on hard pavement with serious traction. It is all about politics.

It wouldn’t surprise me to hear President Obama say after the budgets release, “the fundamentals of our economy are strong.”

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