President-Elect Barack Obama headed to Capitol Hill yesterday (Monday) to meet with House and Senate leaders to push for quick action on his broad economic stimulus package that could cost as much as $775 billion. 

But in a concession to his need for bi-partisan support to pass any package, Obama promised “radical reforms” to impose more control over the federal budget in the future, The New York Times reported.

Republican leaders have already started voicing criticism of the recovery plan, offering their own ideas about what it should contain. Obama aides hope to soften the perception of the plan as an “open checkbook” by focusing more on tax cuts than on spending.

To firm up support among Congressional skeptics worried that Obama was too focused on government spending, Obama’s team revealed the package will devote about 40% to tax cuts, costing roughly $150 billion. The package will

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Paulson heads back to congress…  BOJ cuts rates to below the US…  China to continue increasing the value of the Renminbi… And Now… Today’s Pfennig! Good day… The currencies took a breather overnight as the dollar bounced back up. When we left last night, the Euro was still holding above $1.42, but the single unit dropped 3 cents overnight and is now hovering around the $1.39 level. This move back down was to be expected, and serves as an excellent opportunity for investors who were afraid they had missed out on getting back into the currency market.

I have searched the news wires this morning and can’t find any good reasons for the dollar’s turn around other than it had simply gone too far too fast. Mike Meyer and I were talking about this yesterday morning, as we were looking at the trading screens in amazement. The dollar’s move down over

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President-elect Barack Obama yesterday (Thursday) named Mary L. Schapiro – a strong proponent of protections for individual investors – to head the U.S. Securities and Exchange Commission when his administration takes office next month, the biggest of three nominations with potential financial crisis implications.

And in the latest addition to his Obamanomics plan, the president-elect has also proposed a massive stimulus package of as much as $775 billion over the next two years as part of a historic infusion that’s aimed at overhauling America’s infrastructure, schools, broadband networks and energy use, a Congressional source told MarketWatch.com yesterday.

But making the Schapiro nomination official was considered a key move. In its Thursday morning issue, Money Morning reported that Schapiro had been chosen and that an official announcement would be made later in the day. And that’s just what happened.

Obama named

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We at Election Stocks not only keep track of stocks and sectors that are sensitive to Obama’s moves in the White House, we try and predict when these moves are going to happen. As for Obama’s plans for reforming healthcare, news from The Hill is that Congress may attempt to delay this action until 2010. Pete Stark of the Ways and Means subcommittee on healthcare is a respected expert in the field; he feels as though there are more pressing economic issues to address before Congress can turn to Obama’s priorities. Obama and the Senate would both rather do this sooner than later - perhaps their influence will hasten action from the lower house of the legislature. But until we see indication of that, it looks as though healthcare will not be addressed in the first hundred days.

FOMC to cut further…  Bernanke turns his back on inflation…  Kiwi and Australia rally…  Gold continues to shine… And Now… Today’s Pfennig!

Good day…and welcome to another week, hopefully the currency markets can continue their assault on the dollar which began a few weeks ago. The dollar index peaked back on November 21, and with the exception of a few days around the beginning of December, the greenback has consistently fallen vs. most of the major currencies. Friday was no exception, and the dollar continued to give back gains over the weekend with the Euro climbing back over $1.35 for the first time in two months.

This morning the markets are focusing on the Fed’s Open Market Committee meeting and rate announcement which will come tomorrow. It is widely expected that Bernanke and his compatriots will push US interest rates close to just 0.5%, the lowest on records dating back to July

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HIDDEN VALUE

Dear Value Seeker,

Welcome to the 100th edition of Hidden Value.

The financial world was a far more tranquil place when we started this daily newsletter on July 25. But we knew a storm was brewing…

“Automakers bailout falls apart in Senate” reads a Marketwatch headline today.

Republican Senators blocked the passage of a $14 billion loan to Detroit ‘bad boys’ GM and Chrysler. A refusal of the United Auto Workers, headed by Ron Gettelfinger, to agree to lower wages and benefits by a certain point in 2009 was reportedly the key sticking point.

“Bankruptcy is the best possible result. I am sick and tired of taxpayer money funding corporate ineptitude,” says Mike Shedlock on his Global Economic Analysis blog. “Nonetheless I am fearful that [President] Bush and [House Speaker Nancy] Pelosi will try one more time to revive the dead.”

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The Bush administration Friday dropped its opposition to using the $700 billion bank bailout fund to provide financing for U.S. automakers after the Senate balked at approving $14 billion emergency loans. “Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry,” Treasury spokeswoman Brookly McLaughlin said in a statement. No specific announcement of a bailout was made, as there is still time before General Motors Corp. (GM) and Chrysler LLC - the companies in most at risk of foreclosure - run out of cash. However, the White House made it clear that the government is ready to backstop the companies by using a portion of the funds allocated to its Troubled Asset Relief Program (TARP). “The current weakened state of the economy is ...

After U.S. Federal Reserve policymakers meet today (Monday) and tomorrow (Tuesday), most experts expect a half a percentage point cut in the benchmark Federal Funds Rate – which is already 1.0%.

That doesn’t leave members of the central bank’s policymaking Federal Open Market Committee (FOMC) much room to maneuver. Still, the policymakers may have more ammunition in their arsenal and the statement that accompanies the rate decision at the end of the two-day session could shed some insight on the “creative” actions the Fed could consider in addition to rate cuts (For instance, the central bank could extend the new investment firm discount window, offer additional loan guarantees, or utilize any number of other tools).

And the Fed may well have to use those other tools. As Japan’s “Lost Decade” demonstrated, “zero” interest rates won’t necessarily jump-start an economy – especially when interest

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Risk-taking revived but uncertainty lingers… U.S. dollar hits 2-month low vs euro, down vs yen… Don’t let go of recession trades just yet - JPMorgan

Asian stocks climbed nearly 4 percent on Monday on renewed hopes the U.S. automaker industry would be rescued, strengthening willingness to take risks and knocking the U.S. dollar to a two-month low against the euro.

Investors have been funnelling capital back to emerging Asia for the last few weeks and word the White House was considering using some of $700 billion meant to rescue financial institutions for the struggling car manufacturers extended the trend.

European stock index futures were also pointing to opening gains of at least 2 percent.

However, worsening U.S. economic data, a rapidly growing fiscal deficit and the likelihood the Federal Reserve will cut interest rates again this week all combined to weaken the dollar.

“The

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After U.S. Federal Reserve policymakers meet today (Monday) and tomorrow (Tuesday), most experts expect a half a percentage point cut in the benchmark Federal Funds Rate – which is already 1.0%. That doesn’t leave members of the central bank’s policymaking Federal Open Market Committee (FOMC) much room to maneuver. Still, the policymakers may have more ammunition in their arsenal and the statement that accompanies the rate decision at the end of the two-day session could shed some insight on the “creative” actions the Fed could consider in addition to rate cuts (For instance, the central bank could extend the new investment firm discount window, offer additional loan guarantees, or utilize any number of other tools). And the Fed may well have to use those other tools. As Japan’s “Lost Decade” demonstrated, “zero” interest rates won’t necessarily jump-start an ...