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, Free Forex Signals, Signal ResultsStimulus Checks: Second Time is a Charm
Author: The Geared Investor
July 31, 2008
I keep telling my self that temporary fixes for our economy are not really going to change earnings numbers significantly, and in the long run we may be worse off than we were as a country financially. But let's dig a little deeper here. As I have been saying all along, I feel sorry for companies that rely on producing goods that are expendable in an economy that is currently spinning its wheels. What I mean by this is companies that produce things like Twinkies, soda, or anything in a gas station. If you are spending all of your money to fill up your tank, you are much less likely to go inside and spend a few more dollars on snacks because you're already over your trip budget just with gas alone.
Now a second stimulus check might not be the right idea for a long-term solution, but what option does the government really have at this point. I have never seen so many 150-200 point fluctuations in a single day from the DJI. All of this market volatility is doing nothing for consumer confidence. If we can pump a little bit of money from each person into the economy, earnings for select companies might be good enough to drive a market.
But then there is the direct opposite way of thinking from the consumer:
What if you're so disgruntled about your 401(k) being wiped out recently that you decide to pocket the money for a rainy day because you know gas prices are going back up to $4.50 in the near future? I would call you an aveage American in that regard. It also sends a message to the new or inexperienced investor that is staring to worry because has a new baby and a home, and the message is that this economy is so sad right now that our goverment has to give us money just to keep us from cyring. It's kind of like when you punch your younger brother, and then you give him a dollar so he won't tell your parents.
We are going to look back on these stimulus checks and have a good chuckle in a few years. But once again I am going to be a good American and pump money back into the economy because I want to atleast try to help. Hey, I didn't say I wasn't going to pump it into the market by shorting an American company. Now that would just be cynical.
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