Tim Geithner; our new Secretary of the Treasury:

Doesn't he come off as a rather squirrelly, smarmy, creepy kinda guy--sort of like some junior high asst.principal that would suspend you for leaving a smelly sweat sock in your gym locker?

No matter what his credentials, the guy comes off as nitpicky, creepy, and not someone whom you could trust-- especially being in charge of the nation's treasury. 

And apparently Wall Street thinks so.

Geithner's latest new bank "rescue plan" (TARP) landed with a thud on Wall Street.

Worried that Geithner's revamped bailout was far short on details, investors headed for the exits, and the Dow Jones tumbled more than 380 points-- a one-day disaster that approached near panic selling before the closing bell.

It was an obvious sign of how Wall Street regards the government's ability to restore the health of the banking industry--zilcho. The Dow fell to 7,888.88, perilously below the 8000 support level-- the biggest one-day drop since Dec.1.

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Traders and investors complained about what they saw as a lack of specifics from Mr. Squirrel (Geithner) on how the government will direct more than $1 trillion in public and private support to the financial system.

In brief-- Wall Street doesn't believe a word .

The administration called it the "Financial Stability Plan" (hardy har); and although the former TARP plan may have been christened a new name, seasoned Wall Street traders know better-- a heckuva lot better. It only will cause instability in the financial markets. 

scene: New York Stock Exchange floor.

1st trader:  'What’s with this Geithner anyway?

2nd trader: "I know ...he's not saying a damn thing-- just the usual Obama propaganda"

3rd trader: "And how it will solve the problem of getting the soured mortgage-backed assets off all the banks' books"?

1st trader: "And that stimulus plan? It won't do jack. I'm selling!"

2nd trader: "Everyone on the floor is selling."

3rd trader:  "Why did we ever vote for this Obama? He's anti-profit al the way! Nothing but a  government hack. We might go down below 7000 by summer!"

Obviously, Mr. Squirrel is not going to be regarded as the next Alexander Hamilton. 

Geithner's speech couldn't fool the people who really know about America's business-- the Wall Street insiders, who were quick to realize that his doubletalk all but shines a spotlight on the fact that the government hasn't a clue of what to do.

But the "X factor" that's really spooking the continuing market plunge-- the specter of economic vodoo policies during a possible 2-term Obama presidency.

The smart money on Wall Street always gets in or out way ahead of the crowd. Smart money knows what has been kept from the masses by the media-- Obama's economic stimulus is nothing more than a wealth transfer from Wall Street to Main Street.

And  these same insiders fear that very soon, Obama will stick a few econo-voodoo tax-hike pins into the limp doll of our economy, saying..."we must keep fiscal responsibility."

So, according to the "smart money" (i.e. the big asset class), why hold ANY stocks if Obama is going to keep confusing the market? Wall Street despises uncertainty. Smart money people have other options: hard assets such as gold,  precious metals, commodities, and triple-tax-free muny bonds.

So now, smart money figures..."the market‘s dropping because of Geithners's  political double speak; so it's better to sell now-- ahead of any possible Obama tax consequences. 

The bottom line? Why hold  stocks if Obama is going to take a larger chunk of the dividends, and heavily tax future gains?" 

With the expectation of Obama as a two-term president, the market may not rise to much higher levels for a long while to come-- maybe another 4-8 years. And it might continue to drop for another 4-8 years. And if it keeps on dropping lower...could it be another period, similar to 1932-1940, with people on corners saying, "brother can you spare a buck (or even a dime)?"

Wall Street is about creating wealth-- they are the capitalists. They are the people who seek to put their money where it can multiply, and create more wealth for them. They seek to invest where they see growth possibilities-- companies or industries where there is a bright future.

And with comrade Obama pulling Mr.Squirrel's strings-his fiscal policy puppet-- there will no wealth created, it'll just continue to be redistributed.

But the average American has no idea of how Wall Street actually works. Good thing, for if they did, they'd probably just as soon keep their money in glad zip-loc bags in the freezer, than entrust it to the whims of the market.

Wall street is 100% inside information; hence everything in the market happens for a reason. And whenever insiders get a reason to make a move, they pull the trigger en masse. Hence the market moves- either up or down-- in big intra-day numbers.

Example: the insiders are acutely aware that Obama's stimulus won’t do anything for profits (the whisper factor). The stimulus is 95% political, and perhaps only 5% economic. This means it's a no go for any growth in the private sector, which of course is the realm of Wall Street--profit growth.

So here’s the outlook:

We'll continue to see unprecedented market volatility (reminiscent of the 1929-1932 period), which frightens inexperienced investors into panic selling. And like 1929-1932, the market will slowly and inevitably trend lower.

When you're on a roller coaster, the only people who get hurt are the ones that jump off, which is just what all the frightened inexperienced investors will continue to do--taking the market down with them 

And Wall Street insiders, acutely aware of the outlook, are also selling. And they'll continue to sell into every so called "sucker rally".

So the bottom line might continue to be "fear aplenty"-- a reprise of 1929-1932...sell now, while you still have something left.