Intentionally WRONG!!!!!!

If Massachusetts was not bad enough, the whole truth has not come about the diminishing Democrats against the power hungry republicans in public. With the turn of the Massachusetts seat from Kennedy to Scott Brown it seems the Democrats have become quiet vulnerable to any kind of further political revisions that may occur. Even in light of the new tax that Obama has promised to impose on the investment activities of the banks to curb use any form of public fund in the race for fund generation, the people still are not in favour of Obama. Scott Brown is a living example of that.

Besides the Massachusetts seat next state to go under elections is none other than Illinois of which Obama was a Senator. However environment in Illinois is in no form better than what was in Massachusetts. Herein the outcry of the public is so much that the Republicans freely sing alike that this state does not belong to Obama; it belongs to the people of Illinois. Well Martha Coakley was definitely a mistake but for now on Obama will have to rein a deadly battle in Illinois to reinstate what the democrats are losing- public trust and establish the Democratic hegemony.

With the huge failure of the Health Bill and the government officials picturing the reconciliation options it has become evident that Obama is bound to pass any form of health bill even if it is of any sub standard quality. Millions of dollars have already been invested by lobbyists and vested fund raisers for a health bill and most of them stand at a blank juncture with this recent development. However even with a reconciliation option Obama would not be able to put forth the same health bill.

Obama’s popularity more or less stands at a dicey juncture. People are speculating whether he would be able to last the January 27 declaration wherein he is going to device his understandings and put forth the new budget options that he had thought about.

Health bill was a palpable blunder however his propensity towards attracting obvious attention and charm sometimes overwrites much stuff including his votes. However there is still lot of speculations of what he might announce.

One thing that most Americans have in mind is the raising of the taxation on the public in the form of some form of federal tax. Well with so much liquidity in the market and growing inflation it is peremptory for any government to raise the interest rates however the economic situation in the United States is slightly different. It has just now recently risen from the ashes of the Great recession and the unemployment still hovers around the 10 digit number. Thus taking back the money from the people is going to wipe out lots of small time workers.

It has been argued by lots of financial analysts like Krugman that raising interest rates would not be a sound option right now however there may be an option to do it sometime after another round of bailout out money launched to stabilise the employment setup. But till then taking out money would kill more jobs. The whole American economy is walking on a thin line and slight divergence in the people’s attitude might lead to bear racing over bulls.

Another thing that Obama is going to discuss is his plan of action to curb the government appending to deal with his federal deficit of trillions of dollars. The freeze would cover the agencies and programs for which Congress allocates specific budgets each year, including air traffic control, farm subsidies, education, nutrition and national parks.

But it would exempt security-related budgets for the Pentagon, foreign aid, the Veterans Administration and homeland security, as well as the entitlement programs that make up the biggest and fastest-growing part of the federal budget: Medicare, Medicaid and Social Security.

The payoff in budget savings would be small relative to the deficit: The estimated $250 billion in savings over 10 years would be less than 3 percent of the roughly $9 trillion in additional deficits the government is expected to accumulate over that time.

Obama plans to exempt military spending while leaving many popular domestic programs vulnerable, his move is certain to further anger liberals in his party and senior Democrats in Congress, who are already upset by the possible collapse of health care legislation and the troop build up in Afghanistan, among other things.

With the announcement of the new tax on institutions above 50 billion USD businesses the common man have had the news of the day, however this piece is causing Wall Streeters the hard time of the life. The new tax that would most probably pass through curbs most of the trading and betting activities with public money and those allowed legally under strict jurisdiction.

Investment Banks in light of these events face closure of many of their huge firms. Warren Buffest hedge fund manager and a so called philanthropic investor have also claimed that such regulations would definitely derail the system. The policy would eat up the investment market. In part he is true but too much injustice had been done to taxpayers over betting technicalities.

This has provoked many banks especially Goldman Sachs to plan out an exit strategy which would most probably be going private.

"Goldman is already in the process of figuring out how to go private," said Tom Sowanick, chief investment officer of the Omnivest Group in Princeton, New Jersey. "Goldman did not need -- or want the TARP money to start with -- and there is no reason for them to keep their bank charter and remain a public company." Hedge fund manager Doug Kass, president of Seabreeze Partners, has made Goldman going private among his "20 Surprises for 2010."

Kass predicted: "Sick of the unrelenting compensation outcry, government jawboning and associated Populist pressures, Warren Buffett teams up with Goldman Sachs to take the investment firm private."

It was this company that had helped itself on the 10 billion USD of the TARP money and also participated in the bailout program of AIG where in it got 100 cents against each dollar it had invested in the credit default swaps as the write down were dismantled. It was this company that turned to a public holding company for the TARP backup and now with so much regulation in hand Goldman Sachs is planning to pursue an exit strategy.

So all in all there is lot of explanations for Obama to do while his regime goes under the hammer on 27 January. His political conflicts and the war promises in Afghanistan has degraded his stand however with this path breaking financial strategy in conjugation with the comeback of Paul Volcker the conditions may not be so bleak. There is still hope that he might revert back on the Republicans with full form.


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