I started this firm because I wanted to change and fix what I thought was broken and wrong with Wall Street. Everyday I am closer to that vision, even in this mess.

Seeing markets rise and fall is an emotional trigger.

So. We all know it’s bad. We all know it’s going to get worse. The question is how “worse?” And it’s impossible to really say. I think we can all agree, that we disagree. And that’s the fun part of my job and what makes this country great.

Today, as we revisit November’s lows and look into the great wide open, the major policy that drives us frankly, is not overly compelling but does move the ball forward.

On the policy front, really where our dreams and hopes should be pinned (that’s the point of legislature), we’ve spent a big pile of money on a small pile of infrastructure projects that won’t achieve critical mass in a single area of our economy that needs improvement. Banking management and prudence continues to remain a joke. The specter of Bank Nationalization is passing the lips of those “that matter” on both sides of the isle with methodical (and growing) frequency. The Autos (and the US) better pray Apple wants the Auto industry’s dead carcass, to transform the industry in iPhone fashion. And sadly, while this week’s effort on the mortgage front is at the heart of the matter, it is arguably another miserable legislative failure.

It was on these key issues in the Congress, White House, and with our regulators that we pinned our hope. And as big as the numbers are from them, I truly am not sure it will do the trick (with my economic theorist hat on).

So, where is hope? What is left to see on the horizon from Washington? Probably another round of spending (almost hopefully) to truly check something off the list. The fact is, we’re already broke. At this point, we might as well have something to show for it. And here is more good news…

The market internals, are frankly not compelling. By some measures, the market could drop another 20%. And why risk it? Because if the bottom is only 5% away or 7% (which is where the near term-support exists), this market will quite possibly bounce precipitously again (like it did last Nov-Jan to the tune of 26%).  Any money that is remaining in stock market should arguably have a ten year timeline.  If you’ve not raised cash before this point in time, it would be hard to justify your move in many cases. We are (and remain) at the point of the unknowable. The market is (and has been since November) historically cheap (and getting cheaper).

President Obama promised to be a free-trade advocate and yet with the Stimulus Bill’s signing into law today, we still have the ‘buy american’ clause in the plan.

I understand the patriotic notion that buying American is a worthy cause.  And truly, we’ve outsourced many jobs, that in hindsight, we shouldn’t have, in the quest for ever growing profits.  But the horse is out of the barn, and to force the ‘Buy American’ call to action at a time when the economic engine of the world depends on the smooth flow of capital around the globe  –well, it’s almost suicidal.

By forcing US companies to, say, buy US steel vs. Chinese steel, will also force China to play the patriot game and, say, buy Chinese tractors and Cranes vs. John Deere or Catepillar.

With China being our single biggest stakeholder in the US (because we owe them more money than any other country in the world), I think we’d be wise to not pick this moment as our time to swat at the hornet’s nest.  –Even if Geithner does speak fluent Chinese.

Here’s a quick article, to get you up to speed.

Let the good times roll.

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