Friday, September 09, 2011

Bernanke Fired a Blank. How About Obama?

Thursday brought two highly anticipated events. First was a speech from Fed Chairman Bernanke. Those looking for an immediate response from the Fed were certainly disappointed as stocks tumbled into the close. More than likely the Fed is just setting the table to take action as early as their next meeting Sept 20th and 21st. Most assume that will be a reincarnation of "Operation Twist" from 1961 when the Fed pushed down long term rates to encourage investment. (Yet with rates already this low, will it really work???)

Then President Obama took center stage on Thursday night unveiling his jobs and growth plan. On the surface all speeches of this nature sound good as they promote great optimism. However, it may take some time for investors to research the true value of these concepts. And, more importantly, the ability for these ideas to become law given a VERY DIVIDED Congress.

Since it will take a little bit of time for the investment community to fully digest this news, you should not give too much credence to the initial reaction of stocks on Friday morning. Quite likely the final verdict will become clearer over the next couple weeks.

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