THE TAX CUT BOOM

The amount of money that will be withdrawn from 401-K and similar plans between now and 2010 is going to be huge. The Bush tax cuts are set to expire in 2010. Over the next two years, huge amounts will be withdrawn and taxes paid at current maximum rates. The result will be a short-term windfall to the government and a lot of cash in the hands of individuals. Insurance companies are in a scramble to get a piece as are brokerage firms but a lot of this money will go into the purchase of second homes. The real estate market is primed for a major bounce. The fall in oil prices will be concurrent with a decline in already low mortgage rates. The false reports of a housing market collapse will be seen as false in more and more localities in the months ahead.

The stock market made an intra-day bottom back in January. It successfully tested the bottom around March 10. Stocks are headed higher. Bad news or good news is turning into good news for stocks. Major buy outs are still in the works. Verizon is bidding for Alltel, Yahoo is still toast. Shares are being removed from the market. Supply and demand forces are ready to push up prices hard!