Stuffed with $275 billion worth of tax cuts for both businesses and consumers, this new proposal also has $550 billion earmarked for spending on healthcare, infrastructure, and education.

But it wouldn’t be Congress without some hearty waffling. And while Democratic leaders unveiled the bill today, expect those numbers to fluctuate as the plan works its way through the Capitol. The goal is to get an agreement in place for Obama to sign by mid February.

And speaking multi-billion dollar aid packages…

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Please, Sir… Can We Have Some More?

It looks like lawmakers are going to have to set aside a few more pennies for Bank of America (NYSE: BAC).

Having already received $25 billion from the Treasury’s Troubled Asset Relief Program (TARP), BAC shares got crushed today amid fresh concerns that losses at Merrill Lynch (which Bank of America bought out) will prove too much for the bank to handle by itself. Government officials are currently mulling over another financial aid package similar to the one it threw to Citigroup (NYSE: C) in November.

This could include a new cash injection from the Treasury’s $700 billion financial bailout package, or government guarantees against losses on bad loans, the earlier version of which was broken down buy our Guest Editor William Patalon III in Banks, Bailouts and Your Money. Both Obama and Federal Reserve chairman Ben Bernanke have made strong calls this week for the second $350 billion of the $700 billion total to be immediately made available.

According to the Wall Street Journal, the government and Bank of America were close to reaching an agreement on Wednesday evening. And while the bank has so far refused to comment on the story, it should make for an interesting fourth quarter and full-year earnings conference call next Tuesday.

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European Central Bank Swings Its Monetary Axe Again

Hot on the heels of the Federal Reserve, Bank of England, and other central banks, the European Central Bank (ECB), which controls monetary policy for the Eurozone nations, today chopped its own interest rate by a further 0.5%. The benchmark lending rate of 2% now equals the low from 2005.

The move comes after a shock 0.75% cut in December, as the Eurozone economy faces its first recession since the euro currency was adopted 10 years ago.

And Wednesday’s report that showed a 7.7% annualized slump in Eurozone industrial production in November seems to have sealed the deal for another cut. This despite ECB president Jean-Claude Trichet hinting recently that the bank may have left rates unchanged this month in order to first gauge the impact of the previous cut.

Barclays Capital says fourth quarter Eurozone industrial production is expected to contract by 3.6% – the worst performance since 1975 – with quarterly GDP growth shrinking by 1.5%.

Unlike some other central banks, though, the ECB’s staunch focus on controlling inflation has caused it to lag its counterparts in terms of monetary policy. This means it has more wiggle room available for further, meaningful rate cuts in the face of an expected deflationary period later this year. This strategy was used by India late last October when it cut its overnight lending rate from 9% to 8% to stave of a recession. To learn more, read India Wields Its Monetary Policy Axe…

We wrap up today with news just in from our healthcare expert Marc Lichtenfeld, who’s spent this week at the JP Morgan Healthcare Conference in San Francisco…

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Biotech Lovefest In San Francisco

The only way to describe the action around Genentech (NYSE: DNA) and Medivation (Nasdaq: MDVN) at this year’s conference is a veritable lovefest.

While neither company dished out any new information, they both simply reinforced why investors should be bullish. The crowd was absolutely buzzing after Medivation CEO David Hung spoke, with a throng of people following him down the hall like paparazzi trying to get near Angelina and Brad.

Shares took a hit today, but I wouldn’t be surprised to see increased institutional interest in the stock over the coming months.

Accuray (Nasdaq: ARAY) also gave a solid presentation, which described its business. When pressed for answers regarding whether the firm is seeing a downturn in capital spending by hospitals and cancer centers, the company said it would address that issue on its January 29 earnings call.

Source: Will Congress Say “Yes, We Can” To A New $825 Billion Stimulus Package?

This from Smart Profits Report:

Today’s eye-popping financial market statistic is brought to you by John Roque at Natixis Bleichroeder…

Since the U.S. stock market peaked in October 2007, the world’s equity market capitalization has shrunk by 53%. If you’re counting at home, that’s $33 trillion.

So if misery loves company and you’re too depressed to look at your brokerage account statements, maybe you can grab some consolation from knowing that investors all over the world share your pain.

In fact, some poor folks have it even worse. According to Bespoke Investment Group…

• Iceland is down a staggering 90% this year.
• Ukraine is off 76%.
• Bulgaria is lower by 74%.

In fact, 51 countries have experienced worse market declines than the U.S. market’s 44% tumble. So are there any winners at all amid this global mess? Just three…

This Year’s (Very Short) List Of Winners

Only Ecuador, Tunisia and Ghana have posted gains in 2008. Which is why I’m pleased to announce my new investment service – The Ecuador, Tunisia, Ghana Trader (trademark pending).

I’m being facetious, of course. But the point is that there are investors out there who are so desperate to find a performing investment that they’re willing to consider just about everything.

At times like this, you’ll often hear folks confidently booming out the “Yeah, but this time, it’s different” line. I’ve long been an opponent of talk like this. And I’ll tell you why…

“This Time It’s Different”… And Other Soundbyte-Friendly Clichés

During the dot com boom, I was routinely told that I “didn’t understand the new paradigm.”

And when the real estate market took off, I was called names for being so stupid for not borrowing cheap money to buy spec houses and home sites in so-called “can’t miss” places like Port St. Lucie, Florida – a city that now boasts the dubious honor of having more than 11% of the homes in the foreclosure process. Unemployment is also over 10% in the county.

But is it truly different this time?

Investors have endured and overcome a Civil War, two World Wars, and the Great Depression. But now, the government seems to be in the process of bailing out every poorly run business. In addition, we’ve got an incoming president that Wall Street knows little about yet, as well as a rapidly changing financial landscape.

The Game May Have Changed… But The Rules Haven’t

Dr. John P.  Hussman, who runs the Hussman Funds, wrote a letter to shareholders explaining precisely why we’re not in uncharted territory. In fact, if the S&P 500 slides to 780, [...], the market would be in the lowest 20% of all historical market valuations. A drop to 700 on the S&P would represent the lowest 10% of historical valuations.

In other words, things are tough and could get worse, but the market has been here before. To read the whole piece, click here.

In the long run, I believe the way you will make money in the market is the way investors have done it for over 200 years – investing in businesses that grow earnings.

Don’t Pack Your Bags Just Yet… There’s Potential In U.S. Large And Small-Caps Alike

Despite the pervading smell of desperation in the market at the moment, you don’t need to buy shares of Accra Brewery Company, Tunisair, or Diner’s Club del Ecuador to have a prayer of making a profit.

Instead, look for stocks that could rebound in 2009. There are so many that have suffered a beating, the list could be extensive. And when you do, first look at the biggest and best companies in their fields – ones who’ve experienced market downturns before and have stood the test of time.

For example, consider Wells Fargo (NYSE: WFC) in the financial sector.

Take a look at biotech giant Genentech (NYSE: DNA) in the healthcare sector.

Cast your eye over Microsoft (Nasdaq: MSFT) in the technology space.

And as the economy recovers, companies that should fare well include McDonald’s (NYSE: MCD), Caterpillar (NYSE: CAT), Costco (Nasdaq: COST), and ITT Corp. (NYSE: ITT).

Don’t neglect the small-cap market either, though. Small-cap stocks have a history of leading the market out of a downturn. You just need to be careful which ones you pick, as it can still be a volatile sector – particularly in a fragile market.

Companies with revolutionary products include Accuray (Nasdaq: ARAY), a long-term position in the Xcelerated Profits Report portfolio and ViroPharma (Nasdaq: VPHM), which is part of the portfolio in my small-cap healthcare service, Access (for more information on Access, call our VIP Services Team at: 888.570.9830 (within the U.S.) or 410.454.0498 (from overseas).

No Pain, No Gain

Currently, the pain train is barreling down the tracks at full speed and we’re all aboard for the ride.

It’s a bumpy and uncomfortable one, for sure. But it will eventually hit the brakes and pull into station. And when the markets calm down and things return to some sense of normality again, you’ll be glad you invested in stocks that you’re familiar with, rather than exotic investments that are often more trouble than they’re worth.

My colleagues Karim, Jim, Lee and I have all been hammering home this point for a few months now. But it’s crucial that you don’t get wrapped up in the hysteria and make poor decisions now that you’ll pay for later.

Simply put, get ready to buy good stocks on the cheap. I know it’s scary now. But this climate won’t last forever and normal order will be restored. That has been the case for over 200 years.

Source: You Don’t Have To Go To Tunisia To Find Solid Stocks… They’re Right Here In The U.S.