Flying Pink Unicorns

Obama will dedicate leftover monies from the bailout to deficit reduction and job creation

As you may have heard, the Treasury Department has announced that it now expects to recover a lot more of the money it lent out to banks and other financial institutions in the various bailouts than was previously announced. In fact, as of this moment, the Treasury expect to MAKE A SMALL PROFIT from the money lent to the banks.

www.nytimes.com/2009/12/07/business/07/tarp.htmp?_r=18&hp

In short, the bank bailouts worked, and worked spectacularly well, at saving the banking system, as I have been saying. Bernanke/Geithner/Paulson are, at least as of now, heroes for their post September 2008 actions. (Their role pre September 2008 is, happily, beyond the scope of this post).

There is a large amount of money currently available to the Treasury Department for additional bailouts. I don't know how much, as this amount hasn't been released, but it is likely over $100 billion, possibly way over. The huge majority of this money is very unlikely to be needed for additional bailouts. I therefore predict that Obama and Congress will soon agree to dedicate around half of this "found money" to deficit reduction, in order to sound concerned about the deficit/high levels of spending, and around half to a new stimulus package, labelled a job creation program. Its a political win-win, and reasonable economically. This new job creation package will likely focus on construction spending. This could happen quickly, perhaps even as soon as Obama's speech on the economy tomorrow night.

Folks, the bailouts worked, the economy is recovering, the economy is on the verge of creating new jobs, and a new road/highway/bridge/tunnel building program is about to begin (which program is perfectly reasonable, given the decrepit state of our nation's infrastructure). My predicted Obama Boom will be clear to all in a few short months. If you have money you're thinking about investing, for heaven's sake, MOVE. Stocks and houses will both be more expensive in a few months than they are now, stocks much more so. Buy now, before the market realizes that the Obama Boom has begun!