An Important Issue

Millions of Americans are losing their extended unemployment benefits as Congress has not been able to pass an extension. Most of the unemployed use their unemployment checks immediately so there is a tremendous short term bang from this type of stimulus. Its sudden disappearance will be felt very quickly throughout the economy.

Congress returns from vacation this week and is in a bind. They want to stimulate the economy before the elections but many don't want to vote for any more bailouts and stimulus packages as it is being used against them in campaigns. I believe it is imperative for the bull case that these benefits be extended by Congress otherwise the chances of this being something more than an oversold rally becomes very slim.

In the long run by passing these types of stimulus we might be delaying the inevitable. But every rally in the past decade has been about delaying the inevitable.

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