'Good Banks' Are the Cost Effective Way Out of the Financial Crisis

Winning a Cyber War - The 'soft underbelly' of U.S. security.

The Central Asian Republic of Kyrgyzstan experienced a cyber attack last month that took down its two largest Web sites. But that's small beer compared to what happened to the Pentagon and several other U.S. agencies in 2007, when cyber attackers successfully hacked into their computer systems, including Defense Secretary Robert Gates's email.

AP

Welcome to the brave new world of cyber war, an area where the U.S. lacks the dominance it enjoys in traditional military arenas. President Obama's recent appointment of Melissa Hathaway to head a 60-day cyber security review is a sign that he is serious about stepping up the battle in cyber space.

Like other forms of terrorism, cyber war offers an attacker asymmetrical advantages and can be used by individuals as well as governments to debilitate and confuse civilian and military targets. The more governments and economies rely on the Internet, the more vulnerable they become. Michael McConnell, the recently departed National Intelligence Director, called cyber security "the soft underbelly of this country."

The Bush Administration made some progress, such as last year's executive order creating the Comprehensive National Cyber Security Initiative. This highly classified $6 billion program aims to secure the dot-gov and dot-mil domains by instituting basic security measures for federal agencies. These include installing improved monitor programs -- known as "Einstein" -- to detect intrusions on federal computers, for example, and sharing attack information across federal departments.

The U.S. government deflects low-level cyber attacks every day. Many are seeking sensitive information, such as weapon designs or classified communications. Security experts say most hackers who target Washington appear to operate from China, although the nature of the Internet makes it impossible to know for certain. In 2007, the government reported nearly 13,000 information security attacks, more than twice the number in 2006. Brigadier General John Davis, deputy commander of the cyber security unit at U.S. Strategic Command, told us his mission deals with millions of cyber "events" every day, although not all of these turn out to be attacks.

Cyber attacks can also be coupled with conventional warfare, which is what happened in Georgia in August. Even before Russian tanks rolled over the border, hackers -- probably Russian -- probed Georgian government Web sites and took several down. Russian hackers are also believed to have attacked Estonia in 2007, freezing government and private information systems, including banks, for days, apparently in retaliation for Estonia's decision to remove a historic Russian statue.

The U.S. hasn't experienced such a coordinated and sustained attack, but no one is sure what would happen if it did. A known vulnerability is America's power grid, which could be disrupted for months by a sophisticated cyber attack, experts say. In telecommunications, banking and transportation, it's harder to predict how great the damage would be; the current season of the TV program "24" is showcasing some of the more unpleasant possibilities. It makes sense that one of Ms. Hathaway's first tasks is overseeing an assessment of the country's vulnerabilities.

The task is complicated by the lack of a legal framework that defines cyber war and security standards. It isn't clear whether the government can dictate security standards for private industry or if federal agencies can probe private networks to determine their safety. If you thought the debates over warrantless wiretapping were heated, get ready for fireworks over cyber security.

Responsibility for U.S. cyber security is shared across many federal agencies. The Departments of Defense and Homeland Security, the FBI, the CIA, armed services and others all have cyber security projects. A successful counterterrorism strategy has to be decentralized to some degree, but better coordination is needed. A good defense also requires a shift in mentality for anyone with access to sensitive computer systems -- even an ordinary flash drive can become a weapon if handled carelessly.

The experiences of Estonia and Georgia show that cooperating with allies to share information -- and possibly coordinate counterattacks -- is an important element of any response. Cyber warriors typically take control of computers in a third country, from which they launch their attacks. Negotiating agreements on cyber security with allies will also help make the U.S. more secure.

Mr. Obama released a statement on homeland security last month saying he would "declare the cyber infrastructure a strategic asset." That's a start. As the attacks on Kyrgyzstan remind, an aggressive response to the cyber threat can't come soon enough.

Rolling Stone: U2: No Line On The Horizon, 5 Stars Out of 5

Deregulation and the Financial Panic - Loose money and politicized mortgages are the real villains.

The debate about the cause of the current crisis in our financial markets is important because the reforms implemented by Congress will be profoundly affected by what people believe caused the crisis.

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President Bill Clinton signs the Financial Services Modernization Act of 1999.

If the cause was an unsustainable boom in house prices and irresponsible mortgage lending that corrupted the balance sheets of the world's financial institutions, reforming the housing credit system and correcting attendant problems in the financial system are called for. But if the fundamental structure of the financial system is flawed, a more profound restructuring is required.

I believe that a strong case can be made that the financial crisis stemmed from a confluence of two factors. The first was the unintended consequences of a monetary policy, developed to combat inventory cycle recessions in the last half of the 20th century, that was not well suited to the speculative bubble recession of 2001. The second was the politicization of mortgage lending.

The 2001 recession was brought on when a speculative bubble in the equity market burst, causing investment to collapse. But unlike previous postwar recessions, consumption and the housing industry remained strong at the trough of the recession. Critics of Federal Reserve Chairman Alan Greenspan say he held interest rates too low for too long, and in the process overstimulated the economy. That criticism does not capture what went wrong, however. The consequences of the Fed's monetary policy lay elsewhere.

In the inventory-cycle recessions experienced in the last half of the 20th century, involuntary build up of inventories produced retrenchment in the production chain. Workers were laid off and investment and consumption, including the housing sector, slumped.

In the 2001 recession, however, consumption and home building remained strong as investment collapsed. The Fed's sharp, prolonged reduction in interest rates stimulated a housing market that was already booming -- triggering six years of double-digit increases in housing prices during a period when the general inflation rate was low.

Buyers bought houses they couldn't afford, believing they could refinance in the future and benefit from the ongoing appreciation. Lenders assumed that even if everything else went wrong, properties could still be sold for more than they cost and the loan could be repaid. This mentality permeated the market from the originator to the holder of securitized mortgages, from the rating agency to the financial regulator.

Meanwhile, mortgage lending was becoming increasingly politicized. Community Reinvestment Act (CRA) requirements led regulators to foster looser underwriting and encouraged the making of more and more marginal loans. Looser underwriting standards spread beyond subprime to the whole housing market.

As Mr. Greenspan testified last October at a hearing of the House Committee on Oversight and Government Reform, "It's instructive to go back to the early stages of the subprime market, which has essentially emerged out of CRA." It was not just that CRA and federal housing policy pressured lenders to make risky loans -- but that they gave lenders the excuse and the regulatory cover.

Countrywide Financial Corp. cloaked itself in righteousness and silenced any troubled regulator by being the first mortgage lender to sign a HUD "Declaration of Fair Lending Principles and Practices." Given privileged status by Fannie Mae as a reward for "the most flexible underwriting criteria," it became the world's largest mortgage lender -- until it became the first major casualty of the financial crisis.

The 1992 Housing Bill set quotas or "targets" that Fannie and Freddie were to achieve in meeting the housing needs of low- and moderate-income Americans. In 1995 HUD raised the primary quota for low- and moderate-income housing loans from the 30% set by Congress in 1992 to 40% in 1996 and to 42% in 1997.

By the time the housing market collapsed, Fannie and Freddie faced three quotas. The first was for mortgages to individuals with below-average income, set at 56% of their overall mortgage holdings. The second targeted families with incomes at or below 60% of area median income, set at 27% of their holdings. The third targeted geographic areas deemed to be underserved, set at 35%.

The results? In 1994, 4.5% of the mortgage market was subprime and 31% of those subprime loans were securitized. By 2006, 20.1% of the entire mortgage market was subprime and 81% of those loans were securitized. The Congressional Budget Office now estimates that GSE losses will cost $240 billion in fiscal year 2009. If this crisis proves nothing else, it proves you cannot help people by lending them more money than they can pay back.

Blinded by the experience of the postwar period, where aggregate housing prices had never declined on an annual basis, and using the last 20 years as a measure of the norm, rating agencies and regulators viewed securitized mortgages, even subprime and undocumented Alt-A mortgages, as embodying little risk. It was not that regulators were not empowered; it was that they were not alarmed.

With near universal approval of regulators world-wide, these securities were injected into the arteries of the world's financial system. When the bubble burst, the financial system lost the indispensable ingredients of confidence and trust. We all know the rest of the story.

The principal alternative to the politicization of mortgage lending and bad monetary policy as causes of the financial crisis is deregulation. How deregulation caused the crisis has never been specifically explained. Nevertheless, two laws are most often blamed: the Gramm-Leach-Bliley (GLB) Act of 1999 and the Commodity Futures Modernization Act of 2000.

GLB repealed part of the Great Depression era Glass-Steagall Act, and allowed banks, securities companies and insurance companies to affiliate under a Financial Services Holding Company. It seems clear that if GLB was the problem, the crisis would have been expected to have originated in Europe where they never had Glass-Steagall requirements to begin with. Also, the financial firms that failed in this crisis, like Lehman, were the least diversified and the ones that survived, like J.P. Morgan, were the most diversified.

Moreover, GLB didn't deregulate anything. It established the Federal Reserve as a superregulator, overseeing all Financial Services Holding Companies. All activities of financial institutions continued to be regulated on a functional basis by the regulators that had regulated those activities prior to GLB.

When no evidence was ever presented to link GLB to the financial crisis -- and when former President Bill Clinton gave a spirited defense of this law, which he signed -- proponents of the deregulation thesis turned to the Commodity Futures Modernization Act (CFMA), and specifically to credit default swaps.

Yet it is amazing how well the market for credit default swaps has functioned during the financial crisis. That market has never lost liquidity and the default rate has been low, given the general state of the underlying assets. In any case, the CFMA did not deregulate credit default swaps. All swaps were given legal certainty by clarifying that swaps were not futures, but remained subject to regulation just as before based on who issued the swap and the nature of the underlying contracts.

In reality the financial "deregulation" of the last two decades has been greatly exaggerated. As the housing crisis mounted, financial regulators had more power, larger budgets and more personnel than ever. And yet, with the notable exception of Mr. Greenspan's warning about the risk posed by the massive mortgage holdings of Fannie and Freddie, regulators seemed unalarmed as the crisis grew. There is absolutely no evidence that if financial regulators had had more resources or more authority that anything would have been different.

Since politicization of the mortgage market was a primary cause of this crisis, we should be especially careful to prevent the politicization of the banks that have been given taxpayer assistance. Did Citi really change its view on mortgage cram-downs or was it pressured? How much pressure was really applied to force Bank of America to go through with the Merrill acquisition?

Restrictions on executive compensation are good fun for politicians, but they are just one step removed from politicians telling banks who to lend to and for what. We have been down that road before, and we know where it leads.

Finally, it should give us pause in responding to the financial crisis of today to realize that this crisis itself was in part an unintended consequence of the monetary policy we employed to deal with the previous recession. Surely, unintended consequences are a real danger when the monetary base has been bloated by a doubling of the Federal Reserve's balance sheet, and the federal deficit seems destined to exceed $1.7 trillion.

Mr. Gramm, a former U.S. Senator from Texas, is vice chairman of UBS Investment Bank. UBS. This op-ed is adapted from a recent paper he delivered at the American Enterprise Institute.

Mr. President, Keep the Airwaves Free

Is the Administration Winging It? Obama's reputation for competence is at risk.

Team Obama demonstrated remarkable discipline during the presidential campaign. From raising an unprecedented amount of money to milking every advantage from the Internet to grabbing lots of delegates from inexpensive caucus states, they left nothing to chance.

And now the administration has scored a major legislative victory in an extraordinarily short period of time. Less than 700 hours after taking the oath of office, President Barack Obama signed the largest spending bill in American history.

Nevertheless, this fast start can't overcome a growing sense the administration is winging it on issues large and small.

Take the vetting of cabinet nominees. Mr. Obama's aides ignored a federal investigation of New Mexico's Gov. Bill Richardson that started last August for a possible pay-for-play scandal. Mr. Richardson had to withdraw after being named to become secretary of commerce.

The administration treated as inconsequential the failure of its choices for Treasury secretary and White House performance officer, as well as its labor secretary-designate's spouse, to pay taxes. It failed to uncover Tom Daschle's problems with more than $102,943 in previously unpaid taxes, penalties and interest -- and once it did, aides assumed Mr. Daschle would be given a pass.

Team Obama promised Gen. Anthony Zinni he'd be ambassador to Iraq, then cut him loose without explanation. After the Bill Richardson fiasco, it romanced Republican Sen. Judd Gregg for commerce secretary -- then ignored his advice on the stimulus and wouldn't trust him with running the department, moving supervision of the Census into the White House. Mr. Gregg withdrew himself from consideration.

Then there is the stimulus itself. Mr. Obama's economic team met with congressional leaders in December to green light a bill costing up to $850 billion. But they described less than $200 billion of what they wanted in the envelope. In return for outsourcing the bill's drafting to Congress, the administration took on two responsibilities: running polls to advise Hill Democrats on how to sharpen their marketing, and putting the president on the road to sell a bill others wrote.

Team Obama was winging it when it declared the stimulus would "save or create" 2.5 million, then three million, then 3.7 million, and then four million new jobs. These were arbitrary and erratic numbers, and they knew there's no way to count "saved" jobs. Americans, being commonsensical, will focus on Mr. Obama's promise to "create" jobs. It's highly unlikely that more than 180,000 jobs will be created each month by the end of next year. The precise, state-by-state job numbers the administration used to sell the stimulus are likely to come back to haunt them as well.

Bipartisanship? The administration failed even to respond to GOP offers to endorse an Obama campaign proposal to suspend capital gains taxes for new small businesses.

Inexplicably, the president, in a prime-time press conference, raised expectations for Treasury Secretary Tim Geithner's bank rescue plan, which turned out the next day to be no plan at all. The markets craved details; they got none. When markets cratered, spokesmen didn't acknowledge the administration's poor planning, but blamed the markets.

Team Obama was also winging it on enhanced interrogation of terrorists. First it nullified all the Bush administration's legal authorities before considering what rules it should have in place. When the CIA briefed White House officials on the results obtained from these techniques, the administration backtracked and organized a four-month study of what rules were appropriate.

Something similar happened with the promise to close Guantanamo Bay within a year: The administration has no idea what it will do with the violent terrorists detained there. And on ethics, Mr. Obama proclaimed an end to lobbyist influence in government -- even as he was nominating lobbyists for major posts and filling White House ranks with former lobbyists.

Team Obama has been living off its campaign reputation for planning and execution. That reputation is now frayed, and all the bumbling and unforced errors will have an impact. Such things don't go unnoticed on Capitol Hill or in foreign capitals.

The president, a bright and skilled politician, has plenty of time to recover. The danger is that what we have seen is not an aberration, but the early indications of his governing style. Barack Obama won the job he craved, now he must demonstrate that he and his team are up to its requirements. The signs are worrisome. The world is a dangerous place. The days of winging it need to end.

Mr. Rove is the former senior adviser and deputy chief of staff to President George W. Bush.

Dear Mr. President, Have the Guts to Be an Optimist

As Obama prepares for his first major speech next week, he should take a page from FDR, Reagan, and his own campaign instead of constantly trying to manage expectations. It sure isn’t helping the stock market.

OK, Mr. President, enough with the doomsday talk already. We get it. Things suck. And they’re going to get worse before they get better.

And we get how it important it was for you to level-set expectations out of the gate, as they were stratospherically out of whack.

We are all in economic rehab now, clear eyed and sober. If we’re not out of work, we know friends and family who are. And those of us lucky enough to have jobs are being showered with resumes. Really good ones.

So now we want to know that there is light at the end of this bleak, black tunnel.

It’s time for less mope and more hope. You were elected because you are a walking, talking hope machine. Plug that sucker back in and crank it up to ten.

There has been some debate in the opinion pages about whether the FDR or Ronald Reagan approach to a bad economy is the best remedy. Putting that aside, there is one thing they had in common: They were unblushing optimists. And they communicated their enthusiasm until their half-full cups ranneth over.

It’s time to cut the talk about similarities to the Great Depression. First, it sure as hell doesn’t help the markets. Second, it’s not true. Not yet anyway.

Bradley Schiller, an economics professor at the University of Nevada, straightens out the facts for us: “This fearmongering may be good politics, but it is bad history and bad economics. It is bad history because our current economic woes don’t come close to those of the 1930s. At worst, a comparison to the 1981-82 recession might be appropriate, Consider the job losses that Mr. Obama cites. In the last year, the U.S. economy shed 3.4 million jobs. That’s a grim statistic for sure, but represents just 2.2 percent of the labor force. From November 1981 to October 1982, 2.4 million jobs were lost—fewer in number than today, but the labor force was smaller. So 1981-82 losses totaled 2.2 percent of the labor force, the same as now.

“Job losses in the Great Depression were on an entirely different magnitude…Jobs were being lost at double or triple the rate of 2008-09 or 1981-82.

“This was reflected in the unemployment rates. The latest survey pegs U.S. unemployment at 7.6 percent. That’s more than three percentage points below the 1982 peak (10.8 percent) and not even of the a third of the peak in 1932 (25.2 percent). You simply can’t equate 7.6 percent unemployment with the Great Depression."

Auto production last year declined by roughly 25 percent. That looks good compared to 1932, when production shriveled by 90 percent. The failure of a couple of dozen banks in 2008 just doesn't compare to 10,000 bank failures in 1933. Stockholders can take some solace form the fact that the recent stock market debacle doesn't come close to the 90 percent devaluation of the early 1930s.

There now, don't you feel better.

George W. Bush was president through some of the darkest days of our history and yet his optimism never waned. He is optimistic by nature, but he also understood the importance of always communicating a sense that things will get better. And it’s in part why John Kerry lost in 2004. He painted a terrible picture of the future. And as Bush said, “You can’t say things are going to be awful, follow me and expect to turn around and see a crowd.”

So, Mr. President, you’ve got a big speech coming up. Turn the heat up and the lights back on.

As vice chairman of Public Strategies and president of Maverick Media, Mark McKinnon has helped meet strategic challenges for candidates, causes, and individuals, including George W. Bush, John McCain, Governor Ann Richards, Charlie Wilson, Lance Armstrong, and Bono. McKinnon is co-chair of Arts & Labs, a collaboration between technology and creative communities that have embraced today’s rich internet environment to deliver innovative and creative digital products to consumers.

The Auto Dead Zone: Only bankruptcy can force Detroit to change.

The cover page of Chrysler's restructuring plan, submitted along with GM's late Tuesday, tells you all you really need to know about these 100-page-plus tomes. Replete with pictures of World War II Army Jeeps, dead men in starched collars -- and the now-obligatory "hybrid" logo and plug-in car -- the first page declares that Chrysler "is the Quintessential American Auto Company."

None of that has anything to do with whether it has a viable business model or cost structure now. Consider: Chrysler's plan, which runs to 177 pages, cuts 100,000 cars out of its 2.5 million-car capacity. And this for a company that currently sells one million cars a year. It is, in other words, a political document more than a financial plan.

Meanwhile, the companies' "downside" scenarios from late last year have become this year's reality, with auto sales running at an annual pace of 9.8 million for the entire industry in January. GM insists that its plan will allow it to be profitable on an "adjusted" cash-flow basis "at industry sales rates of 12.5-13.0 million units." This assumes GM can maintain its market share when sales eventually pick back up, even though it has been bleeding share for the better part of three decades. While every auto maker has suffered from the 40% or so decline in sales, GM and Chrysler have been among the worst affected, with Chrysler's unit sales falling 55% year-over-year in January and GM's dropping by 49%.

At the same time, GM's funding needs are growing even faster than its market share is shrinking. Its latest plan foresees a total of $30 billion in government loans before it reaches its projected break-even point -- this for a company that, by its own reckoning, has a "net present value" in the range of $5 billion to $14 billion and market capitalization of only $1.25 billion. That $30 billion request doesn't include the possibility of pension-fund contributions over the next few years. It also assumes that additional aid will be forthcoming from European governments where the company has plants -- a possibility those governments view with dread.

GM posits this $30 billion against what it says would be a $100 billion tab for bankruptcy financing, a figure calculated to frighten the Obama Administration into doubling down on the $13.4 billion already lent to GM in December. Predictably, however, the latest plans defer most of the hardest decisions about labor costs and retiree benefits. The United Auto Workers are right to look askance at retiree benefit contributions made in company stock at a time when it isn't clear that the stock is worth much anyway. Likewise for bondholders, who are being asked to agree to a debt-for-equity swap to cut GM's debt load by two-thirds.

The Obama Administration, meanwhile, has junked the idea of a car czar, perhaps because there's no one willing to live that political nightmare. That alone should tell the Administration something. As long as this remains a political workout instead of a financial one, GM, Chrysler and the UAW will continue to postpone the hard choices. Only bankruptcy, painful as it may be, offers the tools and legal authority needed to force all stakeholders to change the habits that brought the companies to this ebb.

The shrinking of GM and Chrysler are inevitable; the only questions are how long it takes and how much it will cost. President Obama will help himself, taxpayers and the economy if he forces the hard decisions as soon as possible, well before the next election and while he can still blame the last Administration. Bankruptcy increasingly looks like the least painful choice.

Santelli's Chicago Tea Party

TRADERS REVOLT: CNBC HOST CALLS FOR NEW 'TEA PARTY'; CHICAGO FLOOR MOCKS OBAMA PLAN...

VIDEO: 'The government is promoting bad behavior... do we really want to subsidize the losers' mortgages... This is America! How many of you people want to pay for your neighbor's mortgage? President Obama are you listening? How about we all stop paying our mortgage! It's a moral hazard'... MORE...

Dukes of Moral Hazard - Re-default rates are 55% after six months.

President Obama yesterday announced his plan to prevent home foreclosures, saying he wanted to be "very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans . . . And it will not reward folks who bought homes they knew from the beginning they would never be able to afford."

AP

We really do wish he were right. In fact, the details released yesterday suggest the President's plan will do all of the above. The plan will help some struggling homeowners. But by investing in failure, the Administration will also prolong the housing downturn and make financing a home purchase more difficult for future borrowers. Meanwhile, the plan isn't likely to slow the continuing decline in housing prices.

Let's focus on the plan's effect on the individual borrower. Anyone with mortgages owned or guaranteed by Fannie Mae and Freddie Mac will be able to refinance to lower rates if his mortgage is between 80% and 105% of the value of the home. This is a sweet deal that is not available, for example, to many renters looking to buy homes now. Sadly for those who deferred the gratification of homeownership, the 20% down payment has now become industry standard. But at least their taxes will allow other people to stay in homes they can't afford.

Existing borrowers who may not qualify for Fan/Fred refinancing can still receive loan modifications that move their mortgage payments down to 31% of monthly income. In either case, no effort will be made to verify that recipients of aid were truthful on their original mortgage applications. Given that mortgage fraud skyrocketed during the housing boom, and that the Obama Administration intends to assist up to nine million troubled borrowers, we can say with certainty that the unscrupulous will be among those rescued.

Going forward, it will be up to lenders to verify income. Getting this number correct is critical to the government's hopes for the plan. That's because, if pending Treasury guidelines follow the Federal Deposit Insurance Corp. model on which they are based, new modifications will forgo extensive underwriting. The FDIC believes that a lot of the normal research that goes into making a loan or a refinancing decision can be skipped as long as the mortgage-debt-to-income ratio can be moved, even if only for a few years, down to that magic number of 31%. So the government will pay loan servicers $1,000 for each mortgage modified, share the cost of lowering the monthly payments and pay other subsidies to lenders and borrowers -- adding up to $75 billion in taxpayer assistance for modifications. The government will then spend another $10 billion compensating lenders if the housing market continues to decline and some of these loans go bad again.

Will $10 billion be enough? The recent history of mortgage modifications isn't encouraging. According to the December report by the Comptroller of the Currency and the Office of Thrift Supervision, "The number of loans modified in the first quarter that were 30 or more days delinquent was 37 percent after three months and 55 percent after six months. The number of loans modified in the first quarter that were 60 or more days delinquent was 19 percent at three months and nearly 37 percent after six months."

Said Comptroller John Dugan, "One very troubling point is that, whether measured using 30-day or 60-day delinquencies, re-default rates increased each month and showed no signs of leveling off after six months and even eight months."

Those who favor Mr. Obama's plan say that many of these modifications haven't lowered monthly payments the way the new plan does. True, and the more taxpayer dollars are spent subsidizing a particular borrower, the more affordable a loan becomes. But in part to avoid putting an astronomical price tag on this plan, the Administration doesn't necessarily fix loans for the long term.

In fact, the program encourages mortgage servicers to keep the payments low only for five years, after which rates will rise. During the housing bubble, these were called "teaser" rates. Modifications also may extend the term of, say, a 30-year mortgage to 40 years, but still leave the borrower underwater. Research at Credit Suisse suggests that borrowers without equity are not a good bet to stay current. What research cannot answer is how many people will seek assistance when they are told that a new federal program is available to cut their mortgage bill.

Mr. Obama's mortgage plan is his third big economic rescue proposal in a month, and perhaps someone in the White House has noticed that financial markets haven't exactly cheered. Yesterday's end-of-day wrap from UBS put it this way: "Obama Speaks, Market Listens, Sells Off."

What investors, businesses and working Americans want to hear is a President with ideas to spur economic recovery. What they've been getting are plans for a long national Chapter 11 workout.