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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; Lenny Dykstra, former MLB All-Star, and Tracy Byrnes, New York Post business writer.

    Trading Pit: North Korea Says "No More Nukes": Does Wall Street Buy It?

    North Korea reportedly apologizes for setting off a nuclear weapon and says it will abandon future tests. But stocks were unimpressed Friday... the Dow finishing down 9. Is Wall Street buying North Korea's promise?

    Tobin: No way! No one on Wall Street believes North Korea. If they did, the Dow would have been up triple digits on Friday. Wall Street can see through this and knows that North Korea is playing a game. This is on China's plate. It's time for them to step up.

    Gary B: If there were even a 1 percent chance we believed them, the market would have rallied. But no one believes him and the fact that he is trying to play us is idiotic.

    Tracy: Wall Street is tickled that China is finally stepping up. China had been so indecisive but decided to cut its money supply to North Korea. This didn't have that much of an effect on Wall Street, because Wall Street is always ahead of the curve and knew that China eventually would have to do something. This is not and should not be our problem.

    Lenny: How can you trust them? Kim Jong-Il is a freak. This guy is a character, a complete joke, and is running a country? He needs to be taken out by his own people. I favor diplomacy, but I want to know if Russia is going to step up to the plate.

    Pat: Kim Jong-Il's actions have been very inconsistent and irrational over time. What probably happened was that China said, "We're going to publicly threaten to cut off oil if you publicly say, ‘We're not going to do it again.' And then everyone goes home happy." But I'm sure in a few months Jong-Il will test another nuke because North Korea is going to do what they want to do.

    Scott: Wall Street views this as an Asian problem. Even though it appears China is stepping up to help us, they are not. North Korea is China's pit bull. This allows China to have more power in the region. If North Korea is belligerent and China is able to come in and calm things down, China looks good. North Korea is going to have another test. The U.S. should back out of Korea because it will eventually merge into one country anyway.

    D.C. Paralyzed: Just What Wall Street Wants!

    Democrats are leading in the polls as the midterm election draws near. If they win both houses of Congress and split the government — will that paralyze Washington, D.C.? And is that exactly what Wall Street wants?

    Gary B: Yes! That's exactly what Wall Street wants! Government is too big and it is getting bigger. There would be nothing that Wall Street wants more — D.C. paralyzed and no legislation going through. This would leave spending money in our pockets — good for us and for Wall Street.

    Tracy: Look where we are: Dow 12,000. We haven't had any terrorist attacks on U.S. soil in five years. How could Wall Street want change?

    Tobin: The Dems will win in a lot of key areas. Then, when Rep. Charlie Rangel, D-N.Y., introduces a bill that will backtrack everything the Republicans want to do, the President will veto it. Plus, there won't be the two-thirds vote to get over it. But, if we get a Democratic President plus a Democratic Congress and they pull back capital gains, watch out!

    Lenny: I actually almost agree with Tobin — again! If the Democrats take over, it adds uncertainty to an already overvalued and overbought stock market.

    Scott: They call this the "do-nothing" Congress. The Dow is up more than 40 percent and the Nasdaq has doubled since the crash of 2000 and recession of 2001. If nothing gets done, can you imagine how much higher we'll go?

    Pat: This Congress has done very well at spending money. I don't really care who wins as long as they stop spending like drunken sailors. If it takes Democrats and a paralyzed government, great! If it's the Republicans, I hope they wake up, smell the coffee, and realize we are spending way beyond our means. The deficit has got to come down because it is unsustainable.