2/17/09 (Pork & Seals!)

Traders,

The week ended with the Stimulus Package passing both houses and being signed today by Obama in Denver. Obama SAID there was NO PORK in this bill – but it has gone from 100 pages, 400 pages, now to over 1,000 pages. Every Congressman and Senator got to add in their “for my vote” pork.

However, the list of PORK and EARMARKS was long by the time this got past; $15 million for 17 projects from the Senate Appropriations Committee, $14 million for 12 projects from the Senate Agriculture Subcommittee, $3 million for 4 projects from the House Agriculture Subcommittee, etc. The list is long and this 100 page legislation turned into 1,000 pages (of which it would seem from the list of projects it’s 900 pages of pork!) – Remember this is YOUR money the government is spending.

Of course some would argue it is only a few billion or maybe a few 10 billion – the stimulus check is $700 trillion. There is no such thing as “ONLY”! It’s like the CEO of GM (which is in debt just like our government) saying we will fly the private jet down to D.C. for the Congressional testimony – it’s ONLY $10,000 to fly it down there. Or the family that is underwater in their mortgage and the husband has lost his job and the wife is working two jobs to just make ends meet, and the husband comes home with a new flat screen TV and says “it’s ONLY….”
I guess “it’s ONLY…” wouldn’t be so bad if it were NOT for the fact that our GOVERNMENT is in TRILLIONS of DEBT!

This wasn’t just Democrats or Republicans – it was BOTH. These are our trusted politicians! They don’t seem to CARE about your tax dollars being spent (deficit spending remember) – it’s black mail time for votes. Pretty much they are saying, my vote cost you XXXX amount.
Here is how it goes. A company, a union, a special interest group donates money to help get a politician elected – of course they expect something in return. It doesn’t take a genius figure out who. FOLLOW THE MONEY - look at WHO gets the pork and connect the dots as to which member of Congress got the support from that group, business, or union.

Of course these Congress people will say all this money is to stimulate the economy by providing jobs. ($600k for the Congressional Cemetery? $500k to deepen the Anchorage Harbor? $2 million for bioengineering research training at Jackson State University? $4.5 million for comprehensive maritime domain awareness? $3 million in better counter-drug task force training? $1 million for advanced battery technology? $2 million for National Center Research on Student Testing skills? $3 million to protect the Harbor Seal?

Each one of these can be justified by the Congress person, and the company, union, or group getting the money. The problem is the Stimulus is not even CLOSE to being defined. It was a free-for-all. Justifying everything an anything – there was schools, companies, parks, museums, save this animal, save that tree, biomedical engineering, everything. It is a giant socialist bill. The problem is most of that money will go to a few people – because NO ONE really knows what happens to the money after you write the check. Do you really think that $3 million will go into actually protecting the Harbor Seal, or maybe that group will get some nice salaries and bonuses – along with new offices? Of course I could be wrong – but NO ONE will know – because there is no accountability or responsibility – which means no liability. Many of these groups and companies have all ready received millions if not 100s of millions over the year. I have read a couple of these programs – one that had ONLY needed about $30 million dollars (that was 5 years ago) now has received over $120 million and got some more in this round of pork.

It’s a prime example of the government flushing your money down the toilet. Guess what – they STILL do NOT know how they are going to finance it. Last week the Fed met with the same CEO’s they grilled in Congress to ask for their help (need more dealers) in financing the $2 trillion into treasuries this year. I can almost hear the toilet flushing right now – well at least we know those Harbor Seals are safe – or at least the people looking over them will have a nice new office in which to do so.

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Wal-Mart – recession proof!

Wal-mart is bucking the trend again and falls far less than analyst estimates. It looks up in the pre-market – as they continue to remain the one stop shop for food, drugs, clothes, and other staples and needs.

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Futures Pre-Market

The futures are getting hit pretty good. Spreads are in – expect ARB traders to buy futures and sell the basket causing pressure at the opening.

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Support / Resistance

We should didn’t get the rally on Friday – but we did stay in some of those key ranges. This morning doesn’t look good – but things could change after the opening.

INDU 7500 / 8000 (We could hit those NOV lows of 7500 again and that WOULD be KEY support. Watch the close)

NDX 1200 – 1250 (We will probably be down below the 1200 line at the opening – can we close above it?)

SPX 800 (850) 900 (We are moving to that 800 line and probably will be there this morning.)

RUT 400 (450) 500 (The RUT has held well at 450 – the question is can it close there today – if it does we could see a bounce in the narrower indices.)

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Conclusion

Obama will be talking today – he could spin the signing of the Stimulus into good news and a kick-start for the economy. The question is will the market bite? Right now the market is being sent down fast and hard – it will take another miracle speech to save it today, but don’t count Obama out he has pulled off the “Hope” and “Change” speech well. While we might bite on it – the big question is can we get the foreign nations to do so? That is the serious question.