U.S. President Barack Obama’s tax deal has yet to pass Congress, but the compromise – hatched as an appeasement to Republican opposition – already has had an effect on the currency and stock markets.
What’s more is the deal looks as though it could offer a significant impetus for the U.S. economy as we move into 2011.
What has happened in the political arena over the past month has been magnificent theater. I don’t believe in coincidences, so we have to try to understand what is being staged.
U.S. President Barack Obama’s tax deal has yet to pass Congress, but the compromise – hatched as an appeasement to Republican opposition – already has had an effect on the currency and stock markets.
What’s more is the deal looks as though it could offer a significant impetus for the U.S. economy as we move into 2011.
What has happened in the political arena over the past month has been magnificent theater. I don’t believe in coincidences, so we have to try to understand what is being staged.
With all that’s happening in Europe right now – not to mention economic expectations and consumer-spending trends both overseas and here in the United States – I find that we have an interesting “pairs trade” available to us.
And the trade that I’m talking about is to have investors sell Fiat SpA (Pink ADR: FIATY) and buy Ford Motor Co. (NYSE: F).
The inspiration for this trade stems from an experience I had as a teenager.
Indeed, it’s been more than 25 years since the story I’m about to relate took place, but the memories are so vivid that they’re never far from my thoughts.
Neither are the lessons I learned – which is fortuitous, since those lessons are especially applicable in today’s unforgiving financial markets.
You see, I was 18 and was in the market for my very first car. Against my father’s wishes – and against what should have been my better judgment – I purchased a used-and-abused Fiat Spider.
