Want to know how much the Republicans are the creek in this presidential election? A Bloomberg News/Los Angeles Times poll found that voters believe Democrats are better able to handle the economy than President George W. Bush by a margin of 51% to 29%.

Moreover, more than two-thirds respondents said they believed the economy was doing badly, up from 56% in December. More people -- about 80% -- see a recession as likely, up from 71%. A Wall Street Journal/NBC News poll found similar results.

Is it any wonder that President Bush buried the bipartisan hatchet and worked out a fiscal stimulus package?

Wouldn't the economy have gotten more of a kick if unemployment insurance was extended?

That issue will be hotly debated when the bill gets to the Senate. Sen. Max Baucus, the chair of the Senate Tax Committee, told the Wall Street Journal that leaving it out was a "mistake." Let's hope the new spirit of bipartisanship in Washington lasts a little longer.

But I wonder whether sending tax rebates -- mine would be about $1,500 -- will really stimulate the economy? Odds are pretty good that my wife and I are going to wind up handing a lot of that money right back to Uncle Sam which isn't very stimulating if you ask me.

George F. Will, a man so WASPy that he would be cast as a conservative TV pundit if he wasn't one in real life, is downright depressed about his beloved Republican party.

Writing in the Washington Post, Will said "Nov. 4 could be their most disagreeable day since Nov. 3, 1964. Actually, this November could be even worse, because in 1964 Barry Goldwater 's loss of 44 states served a purpose, the ideological reorientation and revitalization of the party. ... Today, all the usual indicators are dismal for Republicans."

Among the problems cited by the bow-tied commentator:

More people identify themselves as Democrats,

independents are sympathetic to the Democrats,

Democrats control the majority of seats in states with 303 electoral votes,

Most Americans believe the country is on the wrong track,

The stock market is not exactly cheering about the announcement of a $140 billion stimulus plan which would give people $800 tax rebate checks. In a $14 trillion economy, that 1% of GDP rebate won't do much.

I think the money would go much further if it was used to recapitalize the banks that are writing down their collateralized debt obligations (CDOs). To maintain their capital ratios -- for instance, Citigroup (NYSE: C)'s Tier 1 capital ratio target of 7.5% -- banks that write down their assets need to either raise more capital or shed more assets or both.

But the great thing about recapitalizing banks is that they could lend out that capital to people who would put down some of their own capital and borrow the rest to make a purchase. $1 of capital invested in a bank could add almost $17 to GDP. Here's a rough example: if a bank trying to maintain a 7.5% capital ratio gets $1 of capital, then it can theoretically make roughly $13.33 worth of loans. If a person wants to buy a house with a 20% down payment, then that $13.33 can be used to buy $16.66 worth of real estate.

While traveling in the Middle East today, President George Bush made his case to OPEC nations for an increase in global oil supplies. Bush stated that current high oil prices could create an economic slowdown in America and that all consuming economies could feel the pain of recent record high prices.

The statement came during the President's first visit to OPEC powerhouse Saudi Arabia, and he argued that a slowdown by consuming economies, such as the United States, would lead to less oil and gas purchases which will in turn hurt OPEC nations. Bush has also visited Kuwait and the United Arab Emirates and is doing his best to spread his view that "oil prices are very high, which is tough on our economy".

OPEC will next meet on February 1 to discuss the possibility of increasing supplies. Bush is not the only one in the Middle East pleading their case for OPEC's lifting of their quotas. U.S. Energy Secretary Samuel Bodman headed to the Middle East yesterday to push for increased output from the cartel.

The New York Times reports that President Bush -- whose visit to Jerusalem this week is likely to roil the energy markets -- is considering what to do about the U.S. economy. Although the cheerleader in him says "the markets are strong and solid", the tax cutter in him sees an opportunity to cut taxes as a way to face "economic challenges" due to rising oil prices, the home mortgage crisis and a weakening job market.

Bush certainly listed some of the right problems. Oil prices have quadrupled from $24 a barrel to $95.60 since he took office. Two million people are expected to lose their homes due to foreclosure by the end of 2008. And the unemployment rate rose to 5%. He just happened to exclude other problems from his list -- like a dollar that's down 60%, $9 trillion in government borrowing, and hundreds of billions in Federal budget deficits -- because they make it harder for him to argue for tax cuts.

These are all problems as are rising food prices and health care costs. But I think the problem that most concerns the typical citizen is the high price of oil. 149,000 people responded to a poll of most worrisome consumer trends and high oil prices got 55% of the votes -- second most important with 23% was the subprime crisis. I was surprised by how much people are worried about oil prices but if you have to make a choice between driving to work or heating your home, high oil prices could be a big worry.

Today's news that Pakistani opposition leader Benazir Bhutto was killed in a terrorist attack has reminded everybody, including the Democratic Party, just how dangerous a world we live in. We are once again reminded that there is a very large movement of individuals bent on the destruction of the West, along with the democratic ideals that the West represents. For those who feel that it's President Bush's fault we are not well-liked, today's incident shows that the deep-rooted hatred has nothing to do with the current U.S. president, but everything to do with the ideals on which the U.S. was founded. It is these ideals that are not well-liked by these extremist elements.

With this grim reminder of the dangers still common in the world, I think this means a renewed focus on security stocks. When speaking about security, no conversation is complete without looking at the Israeli market. The undisputed leader in security technology, Israel's security establishment gained fame because of the reign of terror that the country has faced for decades. Nice Systems (NASDAQ: NICE) is one such company. The stock is bucking today's downward market pressure and is gaining more than 1.5%.

Nice is a security company specializing in two markets: Security and Call Centers. Its security solution empowers security personnel to detect, prevent and respond to threats in real-time. The system also helps in investigating and reconstructing criminal and security cases using video surveillance and control services, incident monitoring and reconstruction solutions. NICE is the market leader in providing fast and efficient solutions for the capture, storage, retrieval and analysis of customer interactions for contact centers and the enterprise. Nice will be playing an active role in the upcoming summer Olympics in Beijing.

As long as there are bad guys out there, there will be a need for a company like Nice.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has a position in NICE and is long the stock. Writer has no position in any other stock mentioned as of 12/27/07.

With all the bad news already made public, I would expect a strong move to the upside at the beginning of 2008. No matter what the doomsayers say, the fact is that the economy is humming along (President Bush is right), chances of a recession are quite low, corporate profits are not as bad as pundits say (see Goldman Sachs(NYSE:GS)), and insiders, not just companies, are putting money where there mouth is and buying up shares in their own stock.

There is no question that there is huge volatility in the markets right now. Each day brings with it a move of more than 1% in either direction with wild intra-day swings as well. Certainly not for the faint of heart. But it's just this volatility that brings me to this prediction.

With all the shorts out there and lots of cash on the sidelines itching to get back into the game, I predict that within the next six months we are going to have a 1,000 point move to the upside in the DOW.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer has no position in any stock mentioned as of 12/18/07.

Some might say that President Bush started fiddling with things during his first election. Many in the opposition certainly felt that one of the Bush's was fiddling with something down in Florida. In any event a whole lot of fiddling has been going on since that time. Whatever credit he wants to take for the economy because of his tax cuts (think manipulation or confuscation) of which I am a benefactor, I think it is more delusion on his part.

The real reason as most would acknowledge, even if it is in hindsight, has been the easy credit. We have heard of dumb money -- this was stupid money or insane money -- but fiddle he did. And now that the house (deflated of course) of cards is in the process of coming down, along with the value of our currency we do not see anyone stepping up to shoulder the blame or offer true leadership how to improve our position. Instead we see a lot of finger pointing.

So any day I expect to see President Bush pick up a fiddle just like Nero, position himself on the balcony and start to whip out a tune. As he does, you can just picture Hillary Clinton ordering him to be gently lifted out of the White-house while he continues to play, not realizing that his time has past and it is her turn to point fingers.

Even though Hillary Clinton appears to have high negative sentiment in certain corners, it is also looking more and more like she can start thinking about running mates. Not publicly of course, but the nomination seems to be hers to lose on the Democrat's side. On the Republican side there does not seem to be a bounty of ideas, and none of the candidates will be able to help themselves in any way by linking their futures to Bush or any recent successes of the party. As it stands now, no matter who wins the Republican nomination, it is hard to run on $100 a barrel oil, 40% less potent dollars, no game plan for Iraq, growing deficits, and more.

After reviewing Wednesday's post, Bush administration pushing dollar down or allowing it to fall? IMF chief sounds alarm, I thought of one more point that is of paramount importance. Either many people are ignoring or do not understand how a devalued dollar facilitates our giving away the country wholesale, even if in the short term it appears to help with our trade deficit.

This concept does not seem to have resonated in Washington and, along with his advisers, our president is either ignorant or avoiding the issue altogether because he does not want to discuss the remedy: everyone tightening their belt financially and taking some economic pain.

Warren Buffett has sounded the alarm many times about this subject, and I will, too. When the dollar falls in value, say 30% (each currency varies), that gives foreign investors 30% more buying power here. Yes, it is true they buy more when our goods and services are "on sale" (and we buy less of theirs). However, what if instead of buying perishables, they buy income-producing property and companies. As long as this trend continues, they would be wise to buy more and more.

A simple example: They buy a company that makes widgets in the United States. They are able to sell (export) more widgets along with their American counterparts because of the devalued dollar. Who makes a higher return on invested capital? The foreign investor, of course, because they paid 30% less for the widget company!

I have been wondering lately if the sagging value of the dollar is actually going down through economic gyrations or being pushed down by design.

There are many repercussions. No one less than Rodrigo Rato, head of the International Monetary Fund, warned Monday of a potential "abrupt fall" in the US dollar that could roil the global economy. "There are risks that an abrupt fall in the dollar could either be triggered by, or itself trigger, a loss of confidence in dollar assets," Rato said at the close of annual meetings here of the IMF and the World Bank, according to news reports.

Here is what is really on his mind: Europe may take steps to temper the strong appreciation of the Euro, which is weighing on exports from the 13-nation bloc. "There is a risk that exchange rate appreciation in countries with flexible exchange rates -- including the Euro area -- could hurt their growth prospects, and that in these circumstances protectionist pressures could worsen," he said.

From my perspective I have wondered if the Bush administration is at least applauding the weak dollar as it improves U.S. trade imbalances, helps prop up the stock market and worried investment bankers, and strengthens American companies in many regards.

"Don't come whining to us with your problems" could be the summary of both President Bush's declaration Friday afternoon basically repeating the commentary of Federal Reserve Chairman Ben Bernanke earlier in the day. This is not to say that sympathy cannot be found for those home owners caught in the squeeze of rising interest rates and lower home values. However, people who entered the housing market late speculating on continued rising prices hoping for quick flips will be left without a chair because the music has stopped playing. All except the funeral march perhaps.

Big Ben said "It is not the responsibility of the Federal Reserve-nor would it be appropriate- to protect lenders and investors from the consequences of their financial decisions."

JPMorgan Chase & Co (NYSE: JPM) is higher this morning as most financial stocks and other stocks affected by the mortgage problems are rising this morning after news that President Bush will unveil a proposal to expand the role of the federal government to stem a wave of mortgage defaults. Fed Chairman Bernanke is also set to make a speech where investors hope he will mention or hint at upcoming rate cuts. If you think this action will help to buoy the troubled lending industry, then now could be a good time to look at a bullish hedged trade on JPM.

After hitting a one-year high of $53.25 in May, JPM shares fell sharply in July and August to hit a one-year low of $42.16 earlier this month. JPM opened this morning at $45.00. So far today the stock has hit a low of $44.28 and a high of $45.13. As of 10:40, JPM is trading at $44.62, up $0.65 (1.5%). The chart for JPM looks bearish but improving slightly, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $40 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just three weeks as long as JPM is above $40 at September expiration. JPMorgan would have to fall by more than 10% before we would start to lose money.

JPM hasn't been below $40 at all in the past year and has shown support around $43 recently. This trade could be risky if the Fed decision discourages investors, but even if that happens, this position could be protected by strong support around $43, a price where investors have been buying JPM up to this point.

Brent Archer is an options analyst and writer at Investors Observer.

In what was billed as the speech of his career, Fed Chairman Ben Bernanke told investors that he will continue to keep a steady hand on the nation's economy and that he wants the markets to sort out their problems with a minimum of government involvement. Any rate cut may not come as quickly or be as dramatic as some on Wall Street expect.

'It's not the responsibility of the Federal Reserve--nor would it be appropriate--to protect lenders and investors from the consequences of their financial decisions," the text of his speech given today says. "But developments in financial markets can have broad economic effects felt by many outside the markets, and the Federal Reserve must take those effects into account when determining policy."

The stock market, which had risen this morning ahead of the speech, pared back some of its gains. Last I checked, the Dow Jones industrial average rose 62.19 points to 13,300.92 and the Nasdaq Composite Index was up 16.75 to 2,582.85.

With his popularity at an all time low and the very real prospect of the Democrats taking back control of the White House in 2008, President Bush is throwing a lifeline to subprime mortgage holders who are in danger of losing their homes to foreclosure.

The plan would allow homeowners who are 90 days behind in their mortgages to refinance their debt through loans insured by the Federal Housing Administration, a move that will help about 80,000 households. Homeowners also would be able to avoid taxes on forgiven debt under a temporary change Bush is proposing. The President also will call for Congress to raise FHA loan limits to $417,000 in some expensive markets. Interestingly, Bush is rejecting calls to let Fannie Mae and Freddie Mac increase the total value of the mortgages they hold in their portfolio.

Before people talk about the return of compassionate conservatism, it's important to remember that many subprime mortgage holders are speculators or people who bought second or third homes. Nonetheless, the administration had to do something to help people who were hoodwinked by sleazy brokers into mortgages that they couldn't afford.

In a televised address, Bush like Fed Chairman Ben Bernanke stressed that it isn't government's role to bail out speculators. He also argued that the economy "remains strong enough to weather any turbulance."

Regardless, investors took these reports as a positive sign, sending shares of financial stocks including Goldman Sachs Group Inc. (NYSE: GS), Countrywide Financial Corp. (NYSE: CFC) and Bear Stearns Cos. (NYSE: BSC) higher. Homebuilders, including Hovnanian Enterprises Inc. (NYSE: HOV), Toll Brothers Inc. (NYSE: TOL) and Beazer Homes USA Inc. (NYSE: BZH) all gave back their gains from earlier today after the speech.

Something has to be done to help the real victims of this crisis, though I'm not sure whether these moves will be enough to address the subprime problem. The government needs to be sure that it's helping the people who deserve to be helped.

Alberto Gonzales, probably the most incompetent and unpopular attorney general in history, resigned today effective September 17. This move is long, long overdue.

The Bush Administration is so out of touch with the American Public that it's frigtening. The anonymous official who leaked the resignation to the New York Times said, "The unfair treatment that he's been on the receiving end of has been a distraction for the department."

Oh brother.

People who are worried about negative publicity shouldn't do negative things.