Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

ETF Plays If CEOs Win Over Washington

Fri, Oct 26, 9:35 AM ET, by Michael Johnston

Late Wednesday night, the Chief Executives from more than 80 different mega-U.S. corporations came together to tackle a seemingly impossible task – call the Congress to action, specifically to reduce the astronomical federal deficit. The campaign, aptly dubbed “Fix the Debt,” aims to pressure Washington to push forward a simple, yet economically sound fiscal plan; raise tax revenues and cut spending. Is it possible that Wall Street is actually supporting a plan that sounds strikingly similar to Mr. Obama’s proposal? Has the ultimate business man Romney lost one of his biggest supporters? Not quite. A closer look at Fix the Debt’s proposal reveals that Wall Street’s CEOs have quite a different plan in mind. Remember, the devil is in the details [see 101 ETF Lessons Every Advisor Should Learn].

First, and foremost, CEOs who signed the manifesto make it crystal clear that tax increases are inevitable, no matter which candidate takes home the victory come November. Mark Bertolini, CEO of Aetna, pointed out, ”There is no possible way; you can do the arithmetic a million different ways (to avoid raising taxes). You can’t tax your way to fix this problem, and you can’t cut entitlements enough to fix this problem.” But unlike Obama’s plan, the crafty CEOs do not endorse only raising marginal income-tax rates for the top 2% of taxpayers. Instead they propose an overhaul of the tax policy (which Romney also endorses) in an effort to create a compromise between the two sides of the political spectrum.

A Mixed Bag of “Fix The Debt” Economics

While no specific plan has been laid out, the CEOs pointed out several steps they think the Congress should take:

Reform Medicare and Medicaid, improve efficiency in the overall health care system and limit future cost growth;

Strengthen Social Security, so that it is solvent and will be there for future beneficiaries; and

Include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit.

The CEOs’ statement went on to say that the infamous bipartisan Simpson-Bowles Commission – which deemed that every $3 in spending cuts should be coupled with a $1 tax increase - should be used as an “effective framework” for this new fiscal policy. The emphasis here is that there needs to be a well-defined balance between tax hikes and spending cuts, with the emphasis, of course, on more aggressive budget cuts to quell the uproar that would inevitably happen if there were only tax increases on the ultra-rich [see also Third Time's A Charm? Best ETF Plays For QE3].

From Wall Street To Washington: ETFs To Play

Should the CEOs of Wall Street successfully convince Congress to make a bipartisan fiscal policy that would effectively cut down our nations debt, investors will want to keep an eye on several asset classes that could be impacted by such a monumental plan [see Free Report: How To Pick The Right ETF Every Time]:

  • U.S. Treasuries: This, of course, is an obvious pick, but it’s an important one. If the Congress is able to reduce the federal deficit, demand for U.S. Treasuries would surge since investors would be willing to pay a higher price tag for the debt of a nation that is essentially cash-flow positive. There are roughly 52 Treasury-specific ETFs available on the market that span across a wide array of maturities and positions, including the short-term SHY and the leveraged LBND.
  • U.S. Dollar: Following a similar thought process, the U.S. dollar would become much more valuable if our debt piles were substantially diminished. Whether or not this uptick would counteract the inevitable inflation that would come with the continuation of the Fed’s money-printing stimulus package is certainly debatable. A nice short-term option for bullish investors is the PowerShares DB US Dollar Index Bullish Fund (UUP) [see also King Dollar ETFdb Portfolio].
  • Precious Metals: Should Congress steer the economy away from the “fiscal cliff,” investors would likely shed their precious metals holdings, specifically position in everyone’s favorite safe haven – gold. Popular leveraged short gold ETFs include GLL, DZZ and DGZ.

Follow me on Twitter @DPylypczak

[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro]

Disclosure: No positions at time of writing.

Click here to read the original article on ETFdb.com.


SDI Glossary: "Bullish" Definition
SDI Glossary: "Debt" Definition
SDI Glossary: "price" Definition
SDI Glossary: "Economics" Definition
SDI Glossary: "ETFs" Definition
SDI Glossary: "the Fed" Definition
This Article's Word Cloud:   CEOs   Congress   Debt   Dollar   ETFdb   ETFs   Every   Obama   Romney   Should   Street   There   Treasuries   Wall   Washington   also   course   cuts   debt   deficit   different   emphasis   fiscal   future   gold   investors   leveraged   make   more   only   plan   policy   problem   proposal   quite   reduce   several   short   should   specific   specifically   spending   term   that   there   this   which   will   with   would

| More

Alexion Pharmaceuticals Moves Up In Analyst Rankings, Passing EOG Resources
Fri, Apr 28, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

iShares Residential Real Estate Capped Breaks Below 200-Day Moving Average - Notable for REZ
Fri, Apr 28, 11:14 AM ET, by ETF Channel

In trading on Friday, shares of the iShares Residential Real Estate Capped ETF (REZ) crossed ...

IBDL Crosses Above Key Moving Average Level
Fri, Apr 28, 11:14 AM ET, by ETF Channel

In trading on Friday, shares of the iBonds Dec 2020 Term Corporate ETF (IBDL) crossed ...

SPLV, DTE, PNW, ES: ETF Inflow Alert
Fri, Apr 28, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: SPLV, DTE, PNW, ES Exchange traded funds (ETFs) trade just ...

PPC Crosses Above Average Analyst Target
Fri, Apr 28, 9:15 AM ET, by ETF Channel

In recent trading, shares of Pilgrims Pride Corp. (PPC) have crossed above the average analyst ...

Forward Air Reaches Analyst Target Price
Fri, Apr 28, 9:15 AM ET, by ETF Channel

In recent trading, shares of Forward Air Corp (FWRD) have crossed above the average analyst ...

Entegris Reaches Analyst Target Price
Fri, Apr 28, 9:15 AM ET, by ETF Channel

In recent trading, shares of Entegris Inc (ENTG) have crossed above the average analyst 12-month ...

Z Crosses Above Average Analyst Target
Fri, Apr 28, 9:15 AM ET, by ETF Channel

In recent trading, shares of Zillow Group Inc (Z) have crossed above the average analyst ...

The LRCX Paradox: Analysts Bullish But Forecast -1.12% Fall
Fri, Apr 28, 9:15 AM ET, by ETF Channel

Analyst ratings can sometimes be complicated, and we here at ETF Channel have noticed a ...

PYPL Crosses Above Average Analyst Target
Fri, Apr 28, 9:15 AM ET, by ETF Channel

In recent trading, shares of PayPal Holdings Inc (PYPL) have crossed above the average analyst ...

TREE Crosses Above Average Analyst Target
Fri, Apr 28, 9:15 AM ET, by ETF Channel

In recent trading, shares of LendingTree Inc (TREE) have crossed above the average analyst 12-month ...

Everbridge Reaches Analyst Target Price
Fri, Apr 28, 9:15 AM ET, by ETF Channel

In recent trading, shares of Everbridge Inc (EVBG) have crossed above the average analyst 12-month ...

IPGP Crosses Above Average Analyst Target
Fri, Apr 28, 9:15 AM ET, by ETF Channel

In recent trading, shares of IPG Photonics Corp (IPGP) have crossed above the average analyst ...

TRI Crosses Above Average Analyst Target
Fri, Apr 28, 8:54 AM ET, by ETF Channel

In recent trading, shares of Thomson Reuters Corp (TRI) have crossed above the average analyst ...

FTXR's Underlying Holdings Imply 11% Gain Potential
Fri, Apr 28, 8:54 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

PII Crosses Above Average Analyst Target
Fri, Apr 28, 8:54 AM ET, by ETF Channel

In recent trading, shares of Polaris Industries Inc. (PII) have crossed above the average analyst ...

WST Crosses Above Average Analyst Target
Fri, Apr 28, 8:54 AM ET, by ETF Channel

In recent trading, shares of West Pharmaceutical Services, Inc. (WST) have crossed above the average ...

TWI Crosses Above Average Analyst Target
Fri, Apr 28, 8:54 AM ET, by ETF Channel

In recent trading, shares of Titan International Inc (TWI) have crossed above the average analyst ...

Aqua America Reaches Analyst Target Price
Fri, Apr 28, 8:54 AM ET, by ETF Channel

In recent trading, shares of Aqua America Inc (WTR) have crossed above the average analyst ...

NOK Crosses Above Average Analyst Target
Fri, Apr 28, 8:54 AM ET, by ETF Channel

In recent trading, shares of Nokia Corp (NOK) have crossed above the average analyst 12-month ...

Lowe's Companies Reaches Analyst Target Price
Fri, Apr 28, 8:54 AM ET, by ETF Channel

In recent trading, shares of Lowe's Companies Inc (LOW) have crossed above the average analyst ...

LEMB: Large Outflows Detected at ETF
Thu, Apr 27, 11:54 AM ET, by ETF Channel

Symbols mentioned in this story: LEMB Exchange traded funds (ETFs) trade just like stocks, but ...

iShares Core MSCI Emerging Markets ETF Experiences Big Inflow
Thu, Apr 27, 11:54 AM ET, by ETF Channel

Symbols mentioned in this story: IEMG, NTES, CTRP, YUMC Exchange traded funds (ETFs) trade just ...

KIE, FNF, FAF, PRI: ETF Outflow Alert
Thu, Apr 27, 11:54 AM ET, by ETF Channel

Symbols mentioned in this story: KIE, FNF, FAF, PRI Exchange traded funds (ETFs) trade just ...

SPDR S&P Oil & Gas Exploration & Production ETF Experiences Big Inflow
Thu, Apr 27, 11:54 AM ET, by ETF Channel

Symbols mentioned in this story: XOP, RICE, EQT, COG Exchange traded funds (ETFs) trade just ...

15.9% of MGV Holdings Seeing Recent Insider Buys
Thu, Apr 27, 9:34 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Vanguard Mega Cap Value ETF (MGV) ...

CCL Crosses Above Average Analyst Target
Thu, Apr 27, 9:24 AM ET, by ETF Channel

In recent trading, shares of Carnival Corp (CCL) have crossed above the average analyst 12-month ...

PBE's Holdings Could Mean 23% Gain Potential
Thu, Apr 27, 9:24 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

We Did The Math UOP Can Go To $33
Thu, Apr 27, 9:24 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

The Math Shows MLPX Can Go To $16
Thu, Apr 27, 9:24 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

The MZOR Paradox: Analysts Bullish But Forecast -14.85% Fall
Thu, Apr 27, 9:14 AM ET, by ETF Channel

Analyst ratings can sometimes be complicated, and we here at ETF Channel have noticed a ...

Maxwell Technologies Reaches Analyst Target Price
Thu, Apr 27, 9:14 AM ET, by ETF Channel

In recent trading, shares of Maxwell Technologies, Inc. (MXWL) have crossed above the average analyst ...

Bloomin' Brands Reaches Analyst Target Price
Thu, Apr 27, 9:14 AM ET, by ETF Channel

In recent trading, shares of Bloomin' Brands Inc (BLMN) have crossed above the average analyst ...

H.B. Fuller Reaches Analyst Target Price
Thu, Apr 27, 9:14 AM ET, by ETF Channel

In recent trading, shares of H.B. Fuller Company (FUL) have crossed above the average analyst ...

NMFC Crosses Above Average Analyst Target
Thu, Apr 27, 9:14 AM ET, by ETF Channel

In recent trading, shares of New Mountain Finance Corp (NMFC) have crossed above the average ...

Tanger Factory Outlet Centers a Top Ranked SAFE Dividend Stock With 4.4% Yield (SKT)
Thu, Apr 27, 8:14 AM ET, by ETF Channel

Tanger Factory Outlet Centers, Inc. (SKT) has been named to the Dividend Channel ''S.A.F.E. ...

MPC Named A Top Socially Responsible Dividend Stock
Thu, Apr 27, 8:14 AM ET, by ETF Channel

Marathon Petroleum Corp. (MPC) has been named a Top Socially Responsible Dividend Stock by Dividend ...

TechnipFMC Takes Over #129 Spot From Abbott Laboratories
Wed, Apr 26, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

FEZ: Large Inflows Detected at ETF
Wed, Apr 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: FEZ Exchange traded funds (ETFs) trade just like stocks, but ...

RSX, MBT, YNDX, VEON: ETF Outflow Alert
Wed, Apr 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: RSX, MBT, YNDX, VEON Exchange traded funds (ETFs) trade just ...

UPRO, MDT, MCD, ABBV: Large Outflows Detected at ETF
Wed, Apr 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: UPRO, MDT, MCD, ABBV Exchange traded funds (ETFs) trade just ...

SSO, MRK, UNH, AMGN: Large Outflows Detected at ETF
Wed, Apr 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: SSO, MRK, UNH, AMGN Exchange traded funds (ETFs) trade just ...

PowerShares High Yield Equity Dividend Achievers Portfolio Experiences Big Outflow
Wed, Apr 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: PEY, PPL, CNP, ED Exchange traded funds (ETFs) trade just ...

EWP: ETF Inflow Alert
Wed, Apr 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: EWP Exchange traded funds (ETFs) trade just like stocks, but ...

EWZ: ETF Outflow Alert
Wed, Apr 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: EWZ Exchange traded funds (ETFs) trade just like stocks, but ...

15.2% of DVY Holdings Seeing Recent Insider Buys
Wed, Apr 26, 10:34 AM ET, by ETF Channel

A look at the weighted underlying holdings of the iShares Select Dividend ETF (DVY) shows ...

Healthstream Reaches Analyst Target Price
Wed, Apr 26, 10:34 AM ET, by ETF Channel

In recent trading, shares of Healthstream Inc (HSTM) have crossed above the average analyst 12-month ...

CDW Reaches Analyst Target Price
Wed, Apr 26, 10:24 AM ET, by ETF Channel

In recent trading, shares of CDW Corp (CDW) have crossed above the average analyst 12-month ...

ICHR Crosses Above Average Analyst Target
Wed, Apr 26, 10:24 AM ET, by ETF Channel

In recent trading, shares of Ichor Holdings Ltd (ICHR) have crossed above the average analyst ...

BIDU Crosses Above Average Analyst Target
Wed, Apr 26, 10:24 AM ET, by ETF Channel

In recent trading, shares of Baidu, Inc. (BIDU) have crossed above the average analyst 12-month ...

  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

ETF Plays If CEOs Win Over Washington | Self Directed Investor | Copyright © 2008 - 2017, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of serious individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.