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Bulls & Bears
This past week's Bulls & Bears: Gary B. Smith, Exemplar Capital; Tobin Smith, ChangeWave Research; Eric Bolling, FOX Business News; Pat Dorsey, Morningstar.com; Matt McCall, Penn Financial Group and Marc Lamont Hill, PhD, Temple University.
Dow Has Best Weekly Gain in Five Years; Is the Worst Over?
Matt McCall: Yes! The worst is over! The fear and panic selling that we've seen over the past two weeks is near the market bottom. What will be key to a follow-through for this rally is liquidity, which there will be approximately $2 trillion hitting the markets in the coming year as the array of "bailouts" begin to hit the books. Combine that with the hording of cash by investors and funds and it will lead to a mass exodus back into the markets just as it left over the last few months. The bottom line is that there have been times when everyone gives up on the stock market, only to see it rebound from what appeared to be the end for stocks.
Tobin Smith: No the worst isn't over yet. The idea of a "severe recession" isn't priced into the market along with the global shock yet. We still have some more downside.
Gary B Smith: It's impossible to say. The indicator our fund uses shows not to not venture back into the market until the QQQQ closes (on high volume) above its 50 day moving average. Right now that's at about $44 and QQQQ closed Friday around $32. So we're a long way from getting a buy signal.
Eric Bolling: I think we may have hit the bottom. The world central banks coming to the rescue is a game changer.
Pat Dorsey: We've stepped back from the financial abyss, so the risk of total credit seize-up has receded considerably. That's good. But we're still in for a nasty economy for a while. Unclear how much of that is already discounted into the market.
Obama's Tax Plan for Wealthy Companies: Good or Bad for Jobs?
Gary B Smith: Raising taxes on corporations is a killer. Obama likes to beat up on the Exxons of the world, but that company alone employs over 87,000 people. It also supports thousands of other businesses, cities, jobs, etc. Raising taxes on corporations would basically kill our economy!
Marc Lamont Hill: If we were to increase taxes on corporations like Exxon, they would still continue to create jobs and generate business. But we would also be able to fund programs and create opportunities for the most vulnerable people in society.
Tobin Smith: If we lowered corporate tax rates to 15% like Ireland we would have Dow 12,000 right now. Obama wants to give tax credits for start up business. Well this just shows that he doesn't know much about business, because most start-ups on average don't bay taxes for about 5 years!
Government Bailouts Nearing $2 Trillion: Will They Bankrupt America?
Matt McCall: With nearly $2 trillion already set to be pumped into the markets through a plethora of stimulus packages, I do not believe $300 billion more that Nancy Pelosi is proposing, will have any affect on the real issue with the economy and stock market. Sending out checks to Americans was a band-aid on a compound fracture and the new proposal is even more ludicrous. The Democrats would like to give cash to ailing states that have mismanaged their budgets. That makes sense – let's give more money to the government that has already proven there are not fiscally responsible!
Marc Lamont Hill: People need food stamps, people need jobless benefits, and we all need infrastructure in states. We need these things and we have to do it. We can't have one plan for the rich and not for the poor!
Eric Bolling: I think we are spending our way out of this crisis. It’s stimulus or war. And we already have 2 wars so I think it has to be stimulus.
Pat Dorsey: We'd be more able to afford these emergency costs if the GOP-led Congress had not spent like drunken sailors. We had a surplus not too long ago.
Gary B Smith: If Congress doesn’t bankrupt America, they'll mismanage it and run it into the ground!