Economic stimulus

Wasn't it just 4 months ago we were told that all they (central planners) needed 700 billion and all would be well? This is getting so absurd it reminds me of the part in the jerk where Steve Martin is walking out a broken man and saying "all I need is this phone, and this whatever it was, but as he was walking out it was more and more and more.

We are told now that a mere 900 billion (you see politicians have learned the sales skill. Do not ever round up, you know only 19.95, not 20 bucks) It would be much easier to call it 1 trillion but then that would be misleading of 100 billion somewhere. Not to worry, they will get there so we might as well start talking in trillions. Many pundits are throwing around numbers all over the place. The number I like is the 3 trillion for '09 deficit. Are we there yet? Have we finally gone bankrupt?

Then a read some knot head spouting off that the American consumer is saving more now but that is bad for the economy. It is stupidity like this that has us where we are. If I save a buck, it has to go somewhere. If it is in the bank the bank lends it out, if it is in a business it gives employment.

Why bring this up? Well if you look at bonds, they tanked the past week and prior weeks as well. This is simply too much debt and treasuries sloshing around out there and so supply and demand. This is telling me at least that more and more folks are cleaning up their debt. Something those idiots in DC should be doing but no....

What this does for investing means it will be a long time before the retail sector begins to rebound, or the building or the banking. However, have no fear. If we feel that these sectors have been hit hard enough, it just might be time to do some long calendars or selling puts if the price of the underlying is low enough i.e. UYG.

If I were to buy and hold these sectors, it could be a long time to get the reward I want. But by selling close month calls I can now collect premiums. In order to do this I need a large amount of capital sitting there gaining a pittance in interest. I can either buy the underlying thereby lessening the capital required, or buy a far away option to cover the sold close months.

On another note, Gold seems to have broken out. Did we miss it? I did, but then I usually miss the beginning on things. Not to worry, when it pulls back get in.

The dollar is sitting on a bounce here. Will it continue or will the multi year slide once again take over? I have no clue. Many analysts I respect are on differing sides on this. Time will tell. Once it does, I intend to get in using ETF's. See the Philadelphia stock exchange for the symbols for these