“The only thing left after the ambulances go is Cinderella sweeping up on Desolation Row”

–Bob Dylan

How do we follow last week, when the US stock market had the most volatile week since the ‘87 crash? Leave it to Washington, as the House of Representatives shot down the bailout plan thatseemed to be done over the weekend. The Dow finished today down 777–that’s 7% if you are counting. What bothers me is not that the bill didn’t pass but the actions of the parties involves. Unfortunately, the bailout has become a one big political game with politicians from both sides maneuvering to see how much face time they can get on the boob tube. They all talk about protecting the small guy who lost his mortgage but they hesitate to mention the number of people who are experiencing hugh loses in the pensions, much less the number of jobs that are going to be lost. If we aren’t careful we will soon be facing a nightmare on Main Street, the likes of which this generation has never seen.

The empty suits in DC don’t have any idea of what they are dealing with; Barney Frank and his merry men wouldn’t know a TED spread from a bed spread. What’s more is they don’t understand the consequences ahead if we don’t get these issues stymied quickly. The US equity markets are but a sideshow for a much bigger issue, namely our credit markets. As of now banks aren’t talking to each other. Corporations are having difficulty buying Treasury bonds and small businesses could soon have difficulty making payrolls. At the same time we are starting to lose creditability in the overseas markets. Dangerous times, my friend. There’s been suggestions that PIMCO’s superstar Bill Gross might be getting involved in the process. Let’s hope so, as the guys pushing the buttons are lost. Their behavior is shameful.

Tomorrow we’ll see housing prices, consumer confidence and Chicago PMI numbers. It’s also a Jewish holiday, so Barney won’t be working. Strap in as it will be a wild session.

TO DO LIST FOR TOMOROW

1. Call, email and /or write your Congressperson and complain about the despicable actions of both the Democrats and Republicans who are attempting to solve the credit crisis of 2008.

2. Try and move some cash into long-term Treasuries if you can find them. Or look at one of Bill Gross’s favorites, Treasury Inflation Protected Securities(TIPS).

3. Call your broker/advisor.