This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Obama's Economists Need to Be Near Perfect

What remains to be seen is exactly what role Volcker and Summers will ultimately play in the economic recovery. "I'm not sure exactly what his and Larry Summers' role are going to be. But I think where he will help will be on certain matters and how they relate to finance markets," LaVorgna added.

Williams says that Volcker's decisions while head of the Fed makes him an ideal candidate to help Obama navigate the tough U.S. economic environment.

"What's phenomenal about Volcker is that he's battle-hardened," Williams said. "The economy became much stronger because of his actions at the helm of the Fed. He made some bold decisions. He increased interest rates dramatically when many thought this would hurt and not help. But he tamed inflation and interest rates came down. He's no-nonsense. He speaks his mind. This is not a footnote on his resume. His commitment is to improving the economy."

"An Incredible Amount of Speed"

Feroli says the first order of business for Obama's team must be to address is the continuing crisis in the financial system. On the day Obama took the oath of office, stocks were pressured as a lack of confidence continued to batter the financial sector. Royal Bank of Scotland (RBS - Get Report) plummeted 69%, State Street (STT - Get Report) fell nearly 60%, Bank of America (BAC - Get Report) dropped 29%, Citigroup (C - Get Report) declined 20%, and JPMorgan Chase lost 21%.

"Obviously there are a lot of issues with the banks today," said Feroli. "If they put the financial system third or fourth on their list, they could be in a lot of trouble. The problem is not going to sit around for a couple months for a solution."

LaVorgna said that the team needs to lay out a plan on how they expect to use the second half of the TARP funds. "If you want markets to improve, the sooner the better," he said. "Markets will improve depending on how they view the policies. If the markets improve, you can build in a bottom to forecasts. Right now, unfortunately, there isn't a bottom as economic data continue to worsen. There's a tremendous amount of uncertainty."

Fortunately, LaVorgna says the Obama economic team has moved with "an incredible amount of speed. I can't remember a time, if ever, you had a president-elect start giving economic speeches and announce his cabinet as quickly as he did. I think policymakers realize they need to do things quickly. They can do a lot in 100 days, more than we ever thought possible looking back at history."

5 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BAC $15.39 -0.84%
C $51.52 -0.23%
GS $187.97 -1.60%
JPM $60.58 -0.62%
RBS $10.09 -2.04%

Markets

DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs