I don’t have to remind you about the terrible position that most investors are in at present. The big question is what will Obama do about the market and the economy to turn our fears and hopes to a more positive venue? There has been nothing from our president and cabinet that has been positive for growth for the economy and at the same time beneficial to equity investors. Not a day goes by that Obama or one of his advisors puts out information that is negative for the 90 million Americans that own equities either directly or indirectly through retirement plans, trusts etc. He wants to let the Bush tax reductions on dividends and capital gains expire in 2010, reduce defense spending which employs Americans with real jobs, reduce incentives for oil and gas discoveries which according to American Energy Alliance could create in the coming years, $2.2 trillion in total new state and federal tax revenues, 1.2 million new jobs, and $70 billion in added wages to the economy each year. He would raise taxes on families earning over $250,000 a year. Recently, Obama removed the restrictions on funding human embryonic stem cell research. Please see my blog about the non-success of embryonic stem cell research. Obama reverses it probably because George Bush was against it.

      Meanwhile the housing situation is not improving and many banks have failed due to “toxic’ real estate loans fostered by pressure on Fannie and Freddie. One of my past blogs explains the real cause of the housing decline and the start of our economic downturn. Investors Business Daily headlines Barney Frank who has the audacity to suggest that he will seek prosecutions on those behind the “financial crunch”. It is hard to believe that this person, who is in my opinion guilty of being responsible for our current situation acts as if he was only a spectator to this fiasco. Frank opposed reform of Fannie and Freddie in 1992, 2000, and 2002. Frank received some $40,100 in campaign donations from Fannie and Freddie from 1989 to 2008. Another sinister movement within the Obama budget is that there is a possibility that tax deductions on charitable contributions might become increasingly limited. As far as the stock market is concerned, since Nov 4, election day, the S&P 500 stock index is off 25% and since Jan 20, when Obama took office the same index is down 15%.

      I will close this blog so please stay tuned as more news develops.

Gary E. Marsella

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