Obama's fights

President Obama starts to press big banks harder than previous measures. He proposed tough new limits on the size and activities of the country's largest banks, including restrictions on some banks' ability to trade for their own account or set up in-house hedge funds. This comes at a sensitive timing at which the Dem lost supermajority in the Senate. Thus, this proposal ignites fight with the Wall Street. No doubt, also, a fight with the Rep, who had critized Dem's approaches on banking system regulation policies.

Understandingly but interestingly or even stupidly, the approach from Rep was rather unwelcome. One Rep congressman responded that the proposal would drain the financial system. At the time, big bonus on Wall Street firms drew wide critism, such voice isn't very smart and responsive to main street's resort.

In the mean while, since the supermajority is lost at the Senate. This is widely thought as a threat to the health care plan. President reiterates that he will sign the bill. Dem still has majority so that is not problem of passing the bill. The problem is that how long Dem can make the bill in place. In retrospect, Dem probably realized that they have to do something to get over the senate supermajority. The banking proposal is a good measure to main street voters. It is aiming at November, not now. So it is a good and smart move.

Another uncertainty is Bernanke's second term. Media overly stress the dispute in the government and congress about his second term. The truth is he has no problem getting it especially at this critical moment. Any speculation by media and traders on this regard can backfire and be taken advantage of.

In terms of financial world response, there is for sure rockier than most people thought at the end of last year. Traders have turned to bearish side while some insisted this be a good buy. It is not going to be easy for both sides though. The markets will be running sideway, at least before November.