Obama Speaks, and The Land Grab Has Been Set
Posted on | November 24, 2008 Time: 11:11 am |
I just finished listening to Obama’s press conference announcing the new economic team, and the market seems generally disappointed by the lack of juicy details. We wanted to hear how big the stimulus package would be, and we secretly hoped to hear that capital gains rates would be preserved to expiration.
We didn’t get either, but between the lines the strategy has been set. In his resume readoff of the economic team, Obama made several glowing mentions to the Larry Summers ideology. He even went so far as to say in essence, “I’m going to take Larry’s brain and turn it into economic policy…the debate on what to do right now starts with Larry Summers”
The Race is On
That’s enough for us to head off to the races with, as Larry’s philosophy is well-documented. His recent piece in the Washington Post made it clear that he wants to see us spend, and spend big. Summers could easily push for a stimulus package equal in size to the original TARP layout of $700 bilion. More specifically, Mr. Summers has pinpointed energy, healthcare, and education as immediate targets for heavy stimulus.
Alternative energy is getting a huge boost today, such as SunPower Corp. (SPWRA) shares up over 35%. Soon we’ll see selective speculation within industrials, materials, medical devices, and selected infrastructure names. Setting up a framework for a Summers-induced stimulus landscape is officially the top research priority on my list.
Ideally I’ll be able to identify several companies that are already undervalued and set to benefit from the Obama Response. Caterpillar (CAT), The top holding in the Secular Trends Portfolio, is one company primed to benefit from global infrastructure stimulus.
Chart is Vastly Improving
disclosure: author does not hold positions in the companies mentioned.
Tags: Caterpillar > Larry Summers > Obama > Stimulus Packages > Treasury Secretary
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