It looks like President-Elect Obama will begin his administration with a couple of smart moves.
First, Obama advisor William Daley said on Meet the Press that it was unlikely he'd repeal the Bush tax cuts prior to 2011. It's a dramatic flip flop from his campaign, but a wise one. It would be pure lunacy to take $100 billion of liquidity out of rapidly slowing economy. Thankfully, team Obama came to their senses.
And on This Week, Senator Chuck Schumer said that Congress will likely pass a stimulus package in the $500-700 billion range, which could be sitting on Obama's desk as early as inauguration day. It would be the largest package of its kind in history, and an indication of the gravity of the situation.
Of course, the devil will be in the details: how will the stimulus be allocated, and will there be any attempt to pay for it (not likely).
But it should be encouraging news for the markets, even as we struggle through a miserable holiday season.