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

QQXT Crosses Above Key Moving Average Level
Fri, May 27, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the First Trust NASDAQ-100 Ex-Technology Sector Index Fund ETF ...

PSCD Makes Bullish Cross Above Critical Moving Average
Fri, May 27, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the PowerShares S&P SmallCap Consumer Discretionary Portfolio ETF (PSCD) ...

PowerShares Golden Dragon China Portfolio Breaks Above 200-Day Moving Average - Bullish for PGJ
Fri, May 27, 3:54 PM ET, by ETF Channel

In trading on Friday, shares of the PowerShares Golden Dragon China Portfolio ETF (PGJ) crossed ...

Equifax Moves Up In Analyst Rankings, Passing Tractor Supply
Fri, May 27, 11:54 AM ET, by ETF Channel

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

First Trust Health Care AlphaDEX Fund Breaks Above 200-Day Moving Average - Bullish for FXH
Fri, May 27, 11:34 AM ET, by ETF Channel

In trading on Friday, shares of the First Trust Health Care AlphaDEX Fund ETF (FXH) ...

EEMA Crosses Above Key Moving Average Level
Fri, May 27, 11:34 AM ET, by ETF Channel

In trading on Friday, shares of the iShares MSCI Emerging Markets Asia ETF (EEMA) crossed ...

SPDR S&P BRIC 40 Breaks Above 200-Day Moving Average - Bullish for BIK
Fri, May 27, 11:34 AM ET, by ETF Channel

In trading on Friday, shares of the SPDR S&P BRIC 40 ETF (BIK) crossed above ...

IYF, USB, AIG, GS: ETF Inflow Alert
Fri, May 27, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: IYF, USB, AIG, GS Exchange traded funds (ETFs) trade just ...

iShares Edge MSCI Min Vol USA ETF Experiences Big Inflow
Fri, May 27, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: USMV, NEM, GIS, PEP Exchange traded funds (ETFs) trade just ...

VTI, VIS, STOR, BXMT: ETF Inflow Alert
Fri, May 27, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: VTI, VIS, STOR, BXMT Exchange traded funds (ETFs) trade just ...

MDY, MTD, ALB, Y: Large Inflows Detected at ETF
Fri, May 27, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: MDY, MTD, ALB, Y Exchange traded funds (ETFs) trade just ...

16.7% of DIV Holdings Seeing Recent Insider Buys
Fri, May 27, 9:34 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SuperDividend U.S. ETF (DIV) shows an ...

Zacks MLP High Income Shares -- Insider Buying Index Registering 23.7%
Fri, May 27, 9:34 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Zacks MLP High Income Shares (ZMLP) ...

Public Storage a Top 25 Dividend Giant With 2.84% Yield (PSA)
Fri, May 27, 8:14 AM ET, by ETF Channel

Public Storage (PSA) has been named as a Top 25 ''Dividend Giant'' by ETF Channel, ...

Skyworks Solutions Achieves #17 Analyst Rank, Surpassing American Tower
Thu, May 26, 11:54 AM ET, by ETF Channel

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

SCPB: Large Outflows Detected at ETF
Thu, May 26, 11:14 AM ET, by ETF Channel

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

XBI, ACAD, MDVN, ANAC: Large Inflows Detected at ETF
Thu, May 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XBI, ACAD, MDVN, ANAC Exchange traded funds (ETFs) trade just ...

SMH, TSM, AMAT, ASML: Large Outflows Detected at ETF
Thu, May 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: SMH, TSM, AMAT, ASML Exchange traded funds (ETFs) trade just ...

INDA Makes Bullish Cross Above Critical Moving Average
Thu, May 26, 10:54 AM ET, by ETF Channel

In trading on Thursday, shares of the iShares MSCI India ETF (INDA) crossed above their ...

EEM Crosses Above Key Moving Average Level
Thu, May 26, 10:54 AM ET, by ETF Channel

In trading on Thursday, shares of the iShares MSCI Emerging Markets ETF (EEM) crossed above ...

EWT Crosses Above Key Moving Average Level
Thu, May 26, 10:54 AM ET, by ETF Channel

In trading on Thursday, shares of the iShares MSCI Taiwan ETF (EWT) crossed above their ...

EWT: ETF Outflow Alert
Thu, May 26, 10:54 AM ET, by ETF Channel

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

iShares MSCI Indonesia ETF Experiences Big Outflow
Thu, May 26, 10:54 AM ET, by ETF Channel

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

Add Up The Parts: SPXV Could Be Worth $47
Thu, May 26, 8:14 AM ET, by ETF Channel

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

FAB's Holdings Imply 10% Gain Potential
Thu, May 26, 8:14 AM ET, by ETF Channel

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

RXI Makes Bullish Cross Above Critical Moving Average
Wed, May 25, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Global Consumer Discretionary ETF (RXI) crossed above ...

RFG Makes Bullish Cross Above Critical Moving Average
Wed, May 25, 11:24 AM ET, by ETF Channel

In trading on Wednesday, shares of the Guggenheim S&P MidCap 400 Pure Growth ETF (RFG) ...

UVXY Crowded With Sellers
Wed, May 25, 11:24 AM ET, by ETF Channel

In trading on Wednesday, shares of the ProShares Ultra VIX Short-Term Futures ETF (UVXY) entered ...

iShares MSCI Eurozone Breaks Above 200-Day Moving Average - Bullish for EZU
Wed, May 25, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI Eurozone ETF (EZU) crossed above their ...

iShares Europe Breaks Above 200-Day Moving Average - Bullish for IEV
Wed, May 25, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Europe ETF (IEV) crossed above their 200 ...

IXG Makes Bullish Cross Above Critical Moving Average
Wed, May 25, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Global Financials ETF (IXG) crossed above their ...

HEWG Crosses Above Key Moving Average Level
Wed, May 25, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Currency Hedged MSCI Germany ETF (HEWG) crossed ...

iShares Global Healthcare Breaks Above 200-Day Moving Average - Bullish for IXJ
Wed, May 25, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Global Healthcare ETF (IXJ) crossed above their ...

PXF Crosses Above Key Moving Average Level
Wed, May 25, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the PowerShares FTSE RAFI Developed Markets ex-U.S. Portfolio ETF ...

IWO Makes Bullish Cross Above Critical Moving Average
Wed, May 25, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Russell 2000 Growth ETF (IWO) crossed above ...

Guggenheim S&P MidCap 400 Equal Weight ETF -- Insider Buying Index Registering 12.2%
Wed, May 25, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Guggenheim S&P MidCap 400 Equal Weight ...

We Did The Math VLU Can Go To $87
Wed, May 25, 8:15 AM ET, by ETF Channel

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

Sum Up The Parts: BIB Could Be Worth $57
Wed, May 25, 8:15 AM ET, by ETF Channel

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

STR Named Top 25 SAFE Dividend Stock Increasing Payments For Decades
Wed, May 25, 8:15 AM ET, by ETF Channel

Questar Corp (STR) has been named to the Dividend Channel ''S.A.F.E. 25'' list, signifying a ...

IEUR Crosses Above Key Moving Average Level
Tue, May 24, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Core MSCI Europe ETF (IEUR) crossed above ...

Daily Small Cap Bull 3x Shares Breaks Above 200-Day Moving Average - Bullish for TNA
Tue, May 24, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the Daily Small Cap Bull 3x Shares ETF (TNA) ...

CURE Crosses Above Key Moving Average Level
Tue, May 24, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the Daily Healthcare Bull 3x Shares ETF (CURE) crossed ...

IWC Makes Bullish Cross Above Critical Moving Average
Tue, May 24, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Micro-Cap ETF (IWC) crossed above their 200 ...

SLYG Crosses Above Key Moving Average Level
Tue, May 24, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR S&P 600 Small Cap Growth ETF (SLYG) ...

EWU Crosses Above Key Moving Average Level
Tue, May 24, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the iShares MSCI United Kingdom ETF (EWU) crossed above ...

PowerShares QQQ Breaks Above 200-Day Moving Average - Bullish for QQQ
Tue, May 24, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the PowerShares QQQ ETF (QQQ) crossed above their 200 ...

First Trust Developed Markets Ex-US AlphaDEX Fund (FDT) Shares Cross Above 200 DMA
Tue, May 24, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the First Trust Developed Markets Ex-US AlphaDEX Fund ETF ...

IYG Makes Bullish Cross Above Critical Moving Average
Tue, May 24, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the iShares U.S. Financial Services ETF (IYG) crossed above ...

Vanguard Health Care (VHT) Shares Cross Above 200 DMA
Tue, May 24, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the Vanguard Health Care ETF (VHT) crossed above their ...

FXL Crosses Above Key Moving Average Level
Tue, May 24, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the First Trust Technology AlphaDEX Fund ETF (FXL) crossed ...

  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 - 2016, 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.