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Market Commentary: Waste and Hope

February 10, 2009 – 12:44 pm

With the government making us wait for the stimulus package, both by Congress and the Treasury Secretary, the market is in a holding pattern, but a very tense holding pattern. Most traders are uncertain what will happen to stock prices after the details are revealed.

The fear by the market is that it will do little to improve the economy, that the stimulus part of the bill is too small and the pork too large. The market has little confidence in the government especially after the revelations of waste in the first half of the TARP program.

There will be pork and there will be waste; of that no one outside of Washington has any doubt, but the burning question on everyone’s mind is ‘is there is enough left after the pork and waste to set our economy on a path of growth?

No one expects it to work overnight. There are no magic bullets but there is hope that firing off a number of bullets will eventually work. The problem is that the cost of those bullets may bankrupt us or produce massive inflation.

No wonder the market is tense.

Good Trading
Steve Peasley

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