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Bulls & Bears
This past week’s Bulls & Bears: Gary B. Smith, Exemplar Capital managing partner; Tobin Smith, ChangeWave Research editor; Pat Dorsey, Morningstar.com director of stock research; Scott Bleier, HybridInvestors.com president; Mike Norman, BIZRADIO host; Rebecca Gomez, FOX Business News correspondent.
A Turnaround for Iraq: A Turnaround for Stocks?
Amid so much bad news out of Iraq, a monumental achievement: the finishing touches on its new parliament, an official government. If this helps turn Iraq around, will it also help turn around the sliding U.S. stock market?
TOBIN: This is definitely a first step and a step in right direction. Wall Street wants to see troops coming home and the tremendous cost of this war start to have some return. It also wants to see less people and American troops being killed.
MIKE: It is an undeniable fact that the war has been a stimulus for the U.S. economy. You may not like to hear that, but it's true. Don’t get me wrong; I want the troops to come home. But strictly from an economic standpoint, an earlier withdrawal of our forces would be bad for the economy and the stock market.
GARY B: This is great news for Iraq and the United States. However, as far as the stock market is concerned, it is far in the rear view mirror. I would bet 9 out of 10 money managers and private investors think the government of Iraq is already is place. This will have zero effect on the market. President Bush and stocks have bigger things to worry about.
REBECCA: This good news from Iraq will not have much effect on our stock market. One, it's happening on a Saturday and two, the market will see it more as symbolic, not so much economic. Investors are much more focused on interest rates and inflation.
PAT: This simply doesn’t have much of an effect on the market or economy. The election in Iraq doesn’t really make any difference at all. The market is rightfully worried about inflation and long-term unsustainable things that we’re going to have to pay out, like Medicare and Social Security. Stocks simply have bigger issues than what government is in Iraq, which at the end of the day, is a pretty small country.
SCOTT: There is a tremendous stimulus coming from Iraq. It’s no coincidence that the market took off after we went in. We’re not leaving anytime soon and will continue to make progress there. The American government and troops will continue to have a significant presence in Iraq for many, many years to come and this will continue to help the economy.
New Bush Border Plan: Will It Save GOP and Economy?
President Bush is sending the National Guard to the border to help tackle illegal immigration. According to the latest FOX News Opinion Dynamics Poll, most people agree with the president's plan. Can this save the GOP in the November elections and boost our economy and the stock market?
Mike: The president is doing the right thing by directing resources to the southern border to stop this problem. This will cost money, but it will be positive for the economy and stock market. Psychologically we’re dealing with the problem now and things will be good. If the GOP doesn’t win and the Democrats get in, there will be a problem.
Tobin: Economics tells me we should be sending 200,000 people down there, because it would really boost the economy. However, the base of the Republican Party pulled away. I’m a pro-business Republican. The “law and order” Republicans, who spend more money and have the majority, said they wanted action. This is a good plan. It doesn’t solve the problem, but politically, it’s good.
Gary B: This will mark a bottom in the president’s ratings, but I don’t know whether it will jack his ratings up enough to help the Republicans keep their current congressional seats. It looks unlikely at this point. Politically, this was a good move on the President’s part. Illegal immigration has become a hot issue. I’m not sure if it will have that much effect on the economy. Right now, the big worry for the economy is inflation.
Rebecca: I don’t think it’s going to make that much of a difference for the president. The base of people who wanted the immigration plan done are already on the president’s side. The GOP is still divided over what this plan is going to look like. The president doesn’t want to go as far as some conservatives want to go.
Scott: This is not going to help the president or his party. This is not really a Republican plan. It’s a Democratic plan. The Democrats love this plan because it brings in more immigrants into the fold. Immigrants usually vote Democrat because they want social services. This will help the economy because it will get more taxpayers and make a new middle class. But in the short term, it’s not going to do anything for the president or the GOP.