Wall Street shrugs off January job losses of 598K
NEW YORK – Investors have taken another big gamble on the government's plans to help the economy — hoping that this one will finally work.
All the major indexes rose more than 2 percent Friday, including the Dow Jones industrial average, which rose more than 200 points as Wall Street looked past another bleak jobs report and awaited word from Washington about an economic stimulus plan and changes to the government's financial rescue program. The advance helped propel the indexes to their first winning week after four straight weeks of losses, and put the Nasdaq composite in positive territory for the year to date.
The Senate was expected to vote on its version of a stimulus plan that would include a mix of spending and tax cuts. The Senate bill would cost $937 billion; the House already passed a similar version.
Financial stocks led the market as investors also awaited the government's latest revisions to its lifeline for banks. Treasury Secretary Timothy Geithner and other top officials are close to finishing a plan to overhaul the government's $700 billion financial rescue fund. Geithner is expected to announce the changes in a speech on Monday.
Some investors were worried that the changes would involve nationalizing many banks and, in the process, wiping out shareholders. Many investors are hoping the plan will relax rules requiring businesses to assign a value to all of their assets each quarter. Advocates say altering the rule even temporarily could make it easier for banks to lend without worrying about depleting their cash reserves and running afoul of accounting standards.
Investors waiting for word on the government's plans were unfazed by a terrible employment reading. The Labor Department said U.S. employers slashed 598,000 jobs in January, the most since late 1974. The unemployment rate rose to 7.6 percent, the highest since late 1992.
"All focus right now is now is really on Washington," said Dan Cook, senior market analyst at IG Markets in Chicago. He said investors are hoping the unemployment report was bad enough to goad lawmakers into swift action on the stimulus plan.
http://news.yahoo.com/s/ap/20090206/ap_on_bi_st_ma_re/wall_street
Recall, if you will, what occurred in September after the Congress was "goaded" into passing the TARP Legislation. The markets crashed. And along with the markets, the precious metals were savaged. Technically at this juncture, particularly in Silver, the Precious Metals appear to be "setup" for a whack.
Now we all know, as do countless economists, that the Obama Stimulus Plan is a FARCE. But the "powers that be" are determined to see it through, no matter the consequences that may result from it's passage. DO NOT be fooled by the President's warnings that there will be catastrophe if this bill is not passed. The catastrophe will be if this bill is passed.
Precedent suggests that upon passage, the equity markets will tank, and the Precious Metals will get spanked. It might be suggested that passage of this bill might just be the straw that breaks the camels back with regards the US Dollar. Better safe than sorry, we chose caution here, and would refrain at this time from adding any new positions in the Precious Metals markets until the "uncertainty" that surrounds this bill like a London Fog has been lifted. Please click on the charts above for further commentary on the relevant markets.
Buy dips at support.
Senators downsize stimulus plan to win GOP support
WASHINGTON -- With joblessness rising and the nation's economic recession deepening, Democratic senators and a handful of moderate Republicans reached a compromise late Friday on a scaled-back $780-billion economic stimulus plan.
The deal was slashed by more than $100 billion from earlier estimates to win a few GOP votes.
Michigan's Sens. Carl Levin and Debbie Stabenow, both Democrats, said about $20 billion of the reductions had come from money set aside for school construction. They said billions of dollars more in aid to help states deal with their own budgetary issues was cut.
"It's essential that we pass a bill," said Levin, who said it was important to heed President Barack Obama's call for something to be done quickly to stem the drop in economic confidence. "People want us to act, and they want us to get things done.
"We're in dire straits," added Levin.
Earlier Friday, Obama said further delay would be "inexcusable and irresponsible" given the worst monthly jobs report in a generation -- 598,000 positions lost in January and the national unemployment rate rising to 7.6%.
Estimates have said the proposal could result in more than 1.3 million jobs saved or created.
"The bill before Congress isn't perfect, but it is absolutely necessary," said Obama
http://www.freep.com/article/20090207/NEWS15/902070364/Senators+downsize+stimulus+plan+to+win+GOP+support
Is it just me, or does there appear to be a concerted effort to scare the American People AND Congress into accepting this pork laden bill that will do little if anything economically stimulative, and goes a LONG way towards further indebting the nation. I will go on the record here today and predict that by September of this year, Obama will be asking the Congress for MORE stimulus funding. There is not a stimulus bill large enough in the wildest dreams of these clowns on Capitol Hill that is big enough to halt this economic travesty that was itself created by the US Government, the US Treasury, AND The US Federal Reserve.
End the Fed
By: Dr. Ron Paul, U.S. Congressman
Before the US House of Representatives, February 4, 2009, introducing the The Federal Reserve Board Abolition Act, H.R. 833.
Madame Speaker, I rise to introduce legislation to restore financial stability to America's economy by abolishing the Federal Reserve. Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve's inflationary policies. This represents a real, if hidden, tax imposed on the American people.
From the Great Depression, to the stagflation of the seventies, to the current economic crisis caused by the housing bubble, every economic downturn suffered by this country over the past century can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial "boom" followed by a recession or depression when the Fed-created bubble bursts.
With a stable currency, American exporters will no longer be held hostage to an erratic monetary policy. Stabilizing the currency will also give Americans new incentives to save as they will no longer have to fear inflation eroding their savings. Those members concerned about increasing America's exports or the low rate of savings should be enthusiastic supporters of this legislation.
Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state. It is time for Congress to put the interests of the American people ahead of special interests and their own appetite for big government.
Abolishing the Federal Reserve will allow Congress to reassert its constitutional authority over monetary policy. The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.
In fact, Congress' constitutional mandate regarding monetary policy should only permit currency backed by stable commodities such as silver and gold to be used as legal tender. Therefore, abolishing the Federal Reserve and returning to a constitutional system will enable America to return to the type of monetary system envisioned by our nation's founders: one where the value of money is consistent because it is tied to a commodity such as gold. Such a monetary system is the basis of a true free-market economy.
In conclusion, Mr. Speaker, I urge my colleagues to stand up for working Americans by putting an end to the manipulation of the money supply which erodes Americans' standard of living, enlarges big government, and enriches well-connected elites, by cosponsoring my legislation to abolish the Federal Reserve.
http://news.goldseek.com/RonPaul/1233818100.php
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