By ANDREW TAYLOR
Associated Press Writer

(AP:WASHINGTON) President Barack Obama said Wednesday the recession will turn into "a catastrophe" if the economic stimulus is not passed quickly, lobbying anew for the plan as its price tag climbed above $900 billion and drew more criticism.

The president rejected several complaints about the plan, including arguments that tax cuts alone would solve the problem or that longer-term goals such as energy independence and health care reform should wait. Obama opposed such piecemeal approaches.

Instead, he argued that recalcitrant lawmakers need to get behind him, saying the American people embraced his ideas when they elected him president in November.

While urging members of Congress to act swiftly, he also promised to make changes to the legislation, which has been criticized as larded with spending that won’t have an immediate impact on the economy.

"No plan is perfect, and we should work to make it stronger," Obama told reporters at the White House. "Let’s not make the perfect the enemy of the essential. Let’s show people all over our country who are looking for leadership in this difficult time that we are equal to the task."

Obama has sought each day to ratchet up the pressure on lawmakers, bringing different supportive groups to the White House, scheduling a series of TV interviews, even traveling to a charter school to tout one portion of the bill.

"A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future," he said. "That’s why I feel such a sense of urgency about the Economic Recovery and Reinvestment Plan."

The Senate added money to its version of the bill for medical research and tax breaks for car purchases. The price tag could go yet higher Wednesday if a tax break for homebuyers is made more generous, even as centrists in both parties promise to clear away spending items that won’t jump-start the economy immediately.

In an interview on CNN on Tuesday, Obama signaled a willingness to drop items that "may not really stimulate the economy right now." He also signaled he’ll try to remove "buy American" provisions in the legislation to avoid a possible trade war.

In a victory for auto manufacturers and dealers, Sen. Barbara Mikulski, D-Md., won a 71-26 vote to allow most car buyers to claim an income tax deduction for sales taxes paid on new autos and interest payments on car loans. The break would cost $11 billion over the coming decade but could mean savings of $1,500 on a $25,000 car.

"Just as we need to get the housing market going, we need to get auto sales going," said Sen. Debbie Stabenow, D-Mich.

Wednesday’s session could produce even more generous savings for homebuyers.

Sen. Johnny Isakson, R-Ga., is pressing for a tax credit of up to $15,000 for everyone who buys a home this year, at a cost of $18.5 billion. The pending measure would award a $7,500 tax credit only to first-time homebuyers.

At the same time, centrist senators, including Ben Nelson, D-Neb., and Susan Collins, R-Maine, are seeking to cut tens of billions of dollars from the legislation. They’re operating with the blessing of Democratic leaders, who hope a successful effort could attract some GOP votes for Obama’s plan.

Obama summoned Collins to a White House meeting Wednesday afternoon, a Collins aide said.

Democratic leaders conceded they may soon be obliged to cut billions of dollars from the measure. "It goes without saying if it’s going to pass in the Senate, it has to be bipartisan," said Sen. Dick Durbin of Illinois, the second-ranking Democratic leader, adding that rank-and-file lawmakers in both parties want to reduce the cost of the bill.

In a series of skirmishes Tuesday, the Senate turned back a proposal to add $25 billion for public works projects and voted to remove a $246 million tax break for movie producers. Both moves were engineered by Republicans who are critical of the bill’s size and voice skepticism of its ability to create jobs.

But several hours later, GOP conservatives didn’t contest approval of a $6.5 billion increase in research funding for the politically popular National Institutes of Health. That amendment, by Tom Harkin, D-Iowa, drove the price tag of Obama’s plan just above $900 billion.

Democratic leaders have pledged to have the bill ready for Obama’s signature by mid-month.

INO Headlines

P.S. “Fundamentals vs Technicals”

Every once in a while, I like to flip the TV channels and watch Jim Cramer on CNBC. It’s not that I think that Jim Cramer is a spectacular trader, I just think he is a talented and amusing guy. The last time I tuned on the tube, CNBC’s Jim Cramer was naming his top five picks to get you through these recessionary times.

So with pencil in hand, I quickly scribbled down his top five stock picks on a piece of paper and shoved it into my pocket. I actually forgot about Mr. Cramer’s picks until today when I found this crumpled piece of paper with my handwriting on it. This paper listed the five stocks that Mr. Cramer picked on the close of business on January 8.

So here are Mr Cramer’s top 5 picks and where they closed on 1/08/09:

Caterpillar: (NYSE_CAT) – Closed @ 44.08
Home Depot: (NYSE_HD) – Closed @ 24.38
Johnson and Johnson: (NYSE_JNJ ) – Closed @ 59.02
Hewlett – Packard Company: (NYSE_HPQ) – Closed @ 37.61
Verizon Communications: (NYSE_VZ) – Closed @ 32.42

So I decided to put MarketClub’s “Trade Triangle” technology right next to Jim Cramer’s picks to compare how we both have done for the past few weeks. The one thing that struck me as odd with Mr. Cramer’s trading, is that he never seems to implement a stop loss technique. He talks about money management, but never about the use of stops. He just seems to let his positions run. For example, in the case of Caterpillar (NYSE_CAT), Mr Cramer’s first pick is down 25% from the date it was recommended. I don’t know about you, but a 25% loss in any market is enough to give me the heebie jeebies.

Click HERE for technicals vs. fundamentals video!

Admittedly that’s extreme, but if your only looking for a 25% upmove and the stock is down 25% you really have to make 50% just to get back to even. It’s the type of trading I just don’t understand. I learned a long time ago that trying to pick bottoms and tops in the markets is a loser’s game and a futile exercise that can be very expensive.

So, if Mr. Cramer is long all the stocks listed above, what positions is MarketClub’s “Trade Triangle” technology suggesting for those stocks … are we long or are we short? Well, it turns out we are short all of the above stocks and we see the trend in those stocks as still being negative.

So what’s an investor to do? You can be entertained by Jim Cramer or you can use the “Trade Triangles” to scientifically make money in the markets. The great thing about MarketClub’s “Trade Triangle” technology is that there is no emotion in the signals, it is purely a mathematical algorithm that keeps you on the side with the better odds.

A systematic market proven program approach has flaws like anything else. However, if one follows an approach like this you will make money over time. It also allows you to sleep much better at night when using a systematic program to buy and sell stocks, futures, precious metals and the forex markets.

So while Mr. Cramer is enormously popular and entertaining, I’m not sure that I would want to put my money with this type of approach. I would much rather approach the market in a systematic, scientific way knowing that the odds are in my favor.

We will follow up on these trades when we receive a buy signal or an exit-short position signal and we’ll see exactly how our “Trade Triangle” technology is working vis-a-vis Mr. Cramer.

Watch the video…

Please feel free to make comments on this post and if Mr. Cramer decides to cover his positions and you hear about it first let us know and we will make any adjustments necessary. Thanks.

I look forward to hearing from you.

Every success in the markets,

Adam Hewison
President, INO.com
Co-creator, MarketClub