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

XLB Crosses Above Key Moving Average Level
Fri, Oct 31, 3:54 PM ET, by ETF Channel

In trading on Friday, shares of the Materials Select Sector SPDR Fund ETF (XLB) crossed ...

SPDR Global Dow (DGT) Shares Cross Above 200 DMA
Fri, Oct 31, 3:54 PM ET, by ETF Channel

In trading on Friday, shares of the SPDR Global Dow ETF (DGT) crossed above their ...

Cimarex Energy Achieves #93 Analyst Rank, Surpassing PepsiCo
Fri, Oct 31, 12:24 PM ET, by ETF Channel

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

DFJ Makes Bullish Cross Above Critical Moving Average
Fri, Oct 31, 11:44 AM ET, by ETF Channel

In trading on Friday, shares of the Japan SmallCap Dividend ETF (DFJ) crossed above their ...

EFAV Crosses Above Key Moving Average Level
Fri, Oct 31, 11:44 AM ET, by ETF Channel

In trading on Friday, shares of the iShares MSCI EAFE Minimum Volatility ETF (EFAV) crossed ...

EXI Crosses Above Key Moving Average Level
Fri, Oct 31, 11:44 AM ET, by ETF Channel

In trading on Friday, shares of the iShares Global Industrials ETF (EXI) crossed above their ...

PHO Crosses Above Key Moving Average Level
Fri, Oct 31, 11:44 AM ET, by ETF Channel

In trading on Friday, shares of the PowerShares Water Resources Portfolio ETF (PHO) crossed above ...

TZA: Large Inflows Detected at ETF
Fri, Oct 31, 11:34 AM ET, by ETF Channel

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

FXR, ALK, VEC, UAL: ETF Outflow Alert
Fri, Oct 31, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: FXR, ALK, VEC, UAL Exchange traded funds (ETFs) trade just ...

EIDO: Large Inflows Detected at ETF
Fri, Oct 31, 11:24 AM ET, by ETF Channel

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

Shares of FXY Now Oversold
Fri, Oct 31, 11:14 AM ET, by ETF Channel

In trading on Friday, shares of the Japanese Yen Trust ETF (FXY) entered into oversold ...

EWV Crosses Critical Technical Indicator
Fri, Oct 31, 11:14 AM ET, by ETF Channel

In trading on Friday, shares of the Proshares UltraShort MSCI Japan ETF (EWV) entered into ...

iShares MSCI Japan Small-Cap (SCJ) Shares Cross Above 200 DMA
Fri, Oct 31, 11:14 AM ET, by ETF Channel

In trading on Friday, shares of the iShares MSCI Japan Small-Cap ETF (SCJ) crossed above ...

Permanent Breaks Below 200-Day Moving Average - Notable for PERM
Fri, Oct 31, 11:14 AM ET, by ETF Channel

In trading on Friday, shares of the Permanent ETF (PERM) crossed below their 200 day ...

PowerShares DB Gold Fund (DGL) Enters Oversold Territory
Fri, Oct 31, 11:14 AM ET, by ETF Channel

In trading on Friday, shares of the PowerShares DB Gold Fund ETF (DGL) entered into ...

KBE Makes Bullish Cross Above Critical Moving Average
Thu, Oct 30, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the SPDR S&P Bank ETF (KBE) crossed above their ...

EEB Makes Bullish Cross Above Critical Moving Average
Thu, Oct 30, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the Guggenheim BRIC ETF (EEB) crossed above their 200 ...

Bank and Brokerage (RKH) Shares Cross Above 200 DMA
Thu, Oct 30, 3:54 PM ET, by ETF Channel

In trading on Thursday, shares of the Bank and Brokerage ETF (RKH) crossed above their ...

Shares of SRS Now Oversold
Thu, Oct 30, 3:54 PM ET, by ETF Channel

In trading on Thursday, shares of the Proshares UltraShort Real Estate ETF (SRS) entered into ...

SLVP Crosses Critical Technical Indicator
Thu, Oct 30, 3:54 PM ET, by ETF Channel

In trading on Thursday, shares of the iShares MSCI Global Silver Miners ETF (SLVP) entered ...

IEMG Makes Bullish Cross Above Critical Moving Average
Thu, Oct 30, 3:54 PM ET, by ETF Channel

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

GDXJ Crowded With Sellers
Thu, Oct 30, 11:54 AM ET, by ETF Channel

In trading on Thursday, shares of the Junior Gold Miners ETF (GDXJ) entered into oversold ...

GDX Crosses Critical Technical Indicator
Thu, Oct 30, 11:54 AM ET, by ETF Channel

In trading on Thursday, shares of the Gold Miners ETF (GDX) entered into oversold territory, ...

EPU Crosses Critical Technical Indicator
Thu, Oct 30, 11:54 AM ET, by ETF Channel

In trading on Thursday, shares of the iShares MSCI All Peru Capped ETF (EPU) entered ...

ETFS Physical Silver Shares (SIVR) Enters Oversold Territory
Thu, Oct 30, 11:54 AM ET, by ETF Channel

In trading on Thursday, shares of the ETFS Physical Silver Shares ETF (SIVR) entered into ...

VXF, TWTR, AAL, TSLA: ETF Inflow Alert
Thu, Oct 30, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: VXF, TWTR, AAL, TSLA Exchange traded funds (ETFs) trade just ...

Consumer Discretionary Select Sector SPDR Fund Experiences Big Inflow
Thu, Oct 30, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: XLY, DIS, AMZN, MCD Exchange traded funds (ETFs) trade just ...

IWO, PBYI, TMH, ISIS: ETF Inflow Alert
Thu, Oct 30, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: IWO, PBYI, TMH, ISIS Exchange traded funds (ETFs) trade just ...

Energy Select Sector SPDR Fund Experiences Big Outflow
Thu, Oct 30, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: XLE, CVX, EOG, OXY Exchange traded funds (ETFs) trade just ...

IVV, AAPL, XOM, MSFT: ETF Inflow Alert
Thu, Oct 30, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: IVV, AAPL, XOM, MSFT Exchange traded funds (ETFs) trade just ...

IVW, JNJ, SLB, GOOGL: ETF Inflow Alert
Thu, Oct 30, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: IVW, JNJ, SLB, GOOGL Exchange traded funds (ETFs) trade just ...

SHY: Large Outflows Detected at ETF
Thu, Oct 30, 11:34 AM ET, by ETF Channel

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

Shares of DBP Now Oversold
Thu, Oct 30, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the PowerShares DB Precious Metals Fund ETF (DBP) entered ...

Gold Explorers Getting Very Oversold
Thu, Oct 30, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the Gold Explorers ETF (GLDX) entered into oversold territory, ...

BKF Makes Bullish Cross Above Critical Moving Average
Thu, Oct 30, 10:54 AM ET, by ETF Channel

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

SPDR S&P Telecom (XTL) Shares Cross Above 200 DMA
Thu, Oct 30, 10:54 AM ET, by ETF Channel

In trading on Thursday, shares of the SPDR S&P Telecom ETF (XTL) crossed above their ...

16.8% of XOP Holdings Seeing Recent Insider Buys
Thu, Oct 30, 10:14 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SPDR S&P Oil & Gas Exploration ...

PX Named Top 25 SAFE Dividend Stock Increasing Payments For Decades
Thu, Oct 30, 9:24 AM ET, by ETF Channel

Praxair, Inc. (PX) has been named to the Dividend Channel ''S.A.F.E. ...

iShares Emerging Markets Infrastructure (EMIF) Shares Cross Above 200 DMA
Wed, Oct 29, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Emerging Markets Infrastructure ETF (EMIF) crossed above ...

CSJ Makes Notable Cross Below Critical Moving Average
Wed, Oct 29, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares 1-3 Year Credit Bond ETF (CSJ) crossed ...

AIA Crosses Above Key Moving Average Level
Wed, Oct 29, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Asia 50 ETF (AIA) crossed above their ...

Daily Junior Gold Miners Index Bull 3x Shares (JNUG) Enters Oversold Territory
Wed, Oct 29, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the Daily Junior Gold Miners Index Bull 3x Shares ...

RING Crowded With Sellers
Wed, Oct 29, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares MSCI Global Gold Miners ETF (RING) entered ...

SPDR S&P Regional Banking (KRE) Shares Cross Above 200 DMA
Wed, Oct 29, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR S&P Regional Banking ETF (KRE) crossed above ...

PRFZ Crosses Above Key Moving Average Level
Wed, Oct 29, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the PowerShares FTSE RAFI US 1500 Small-Mid Portfolio ETF ...

EMHY Crosses Above Key Moving Average Level
Wed, Oct 29, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Emerging Markets High Yield Bond ETF (EMHY) ...

PSCI Crosses Above Key Moving Average Level
Wed, Oct 29, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the PowerShares S&P SmallCap Industrials Portfolio ETF (PSCI) crossed ...

EGShares Emerging Markets Consumer (ECON) Shares Cross Above 200 DMA
Wed, Oct 29, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the EGShares Emerging Markets Consumer ETF (ECON) crossed above ...

PowerShares KBW Regional Bank Portfolio Breaks Above 200-Day Moving Average - Bullish for KBWR
Wed, Oct 29, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the PowerShares KBW Regional Bank Portfolio ETF (KBWR) crossed ...

EWQ: ETF Inflow Alert
Wed, Oct 29, 10:54 AM ET, by ETF Channel

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

Related videos | all videos »
  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 - 2014, 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 over 1000 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.