NEW YORK (TheStreet) -- Among the catalysts for last week's sharp selloff was President Obama's decision to point his populist cannon at Wall Street following the crushing blow to his agenda that came from the Massachusetts election.
I'd like to know why Treasury Secretary Tim Geithner and financial consigliere Larry Summers were unusually silent and playing second fiddle. My guess is that they know this attack, while perhaps politically smart, is economically neutral to negative. Goldman Sachs(GS Quote) and Morgan Stanley(MS Quote) will run back to where they came from, or mighty Goldman might even go private as some on the Street have murmured. It's easier doing "God's work" when you're not a public company. A firm like Jefferies(JEF Quote), which has flown under the radar of both Wall Street and Washington, can continue on in stealth mode undetected. I never thought I'd see the day when Rep. Barney Frank (D., Mass.) would be the voice of reason. While the president sounded like he wanted to immediately grab pitchforks and march on Wall Street (past the smoking hulk of health care reform), Frank delivered a dose of Washington insider reality by saying reform would take years (cue the rally in financials). Sen. Christhoper Dodd (D., Conn.), apparently not as tone-deaf as others in his party, suggested they take a break, "maybe a month or so," from taking over everything. Frank and Dodd are right. Although I agree that financial firms that employ Federal Deposit Insurance Corp. funds should not have prop desks, the president is using a shotgun when a sniper would suffice. It was interesting political theater to see the president going after Wall Street in Ohio, a state where unemployment stands at 10.9%, a full point above national average. The president demanded, "We want our money back!" Funny, most of America is saying the same thing, but not to Wall Street. Shockingly missing from the president's demands were calls to reform firms like GM, AIG, Fannie Mae(FNM Quote) and Freddie Mac(FRE Quote). Not that the president asks me for advice, which he obviously should, but I strongly recommend he focus on job creation in lieu of populist lynchings to get this economy on a sustained path to recovery. The State of the Union will be interesting to say the least. Turning to the market, the question that remains to be answered is whether this selloff continues or if the weekend and Apple(AAPL Quote) have provided enough of a circuit breaker for the markets. Many feel relief that the market pulled back, eliminating some of the guilt they have felt by making money in a market they never truly believed in. Several traders with whom I've spoken think this pullback is healthy and will not accelerate. Others are keeping their powder dry and aer waiting to see whether we'll experience a deeper pullback of the 10% kind. I have a "break glass in case of emergency" bear call spread on the S&P 500 that helps me sleep at night. A little. Firing Line: Now is a tough time to protect yourself, but it's still possible. Buying puts now is like purchasing hurricane insurance in Florida with a storm on top of the Bahamas. It's expensive, but there's a reason. All the talk of a correction could be a self-fulfilling prophecy and we may see another leg down start in earnest this week, especially if the "sell on the news" atmosphere hits the Apple tablet debut and the State of the Union spooks the market. Oh, and something might happen if Bernanke isn't re-nominated -- stock up on ammo and water. -- Written by Matthew Buckley in Boca Raton, Fla. Loading Comments...SHARE:
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Dow Jones S&P 500 NASDAQ 10-Year Note 10199.05 1093.24 2213.6 36.34 Oil * 72.34 UP 4.76 UP 1.07 UP 9.87 UP 0.04 10 Yr 3.63% SPDR Gold 106.47 0.05% 0.1% 0.45% 0.11% Data delayed 20 minutes More From TheStreet Latest Headlines Top Rated Stocks from TheStreet Ratings if (Math.floor(Math.random() * 100) < 45) { document.write("NEW: Market Data Section"); } else { document.write("Unusual Trading Volume Stocks"); } if (Math.floor(Math.random() * 100) < 45) { document.write("Stock Picks for 2010"); } else { document.write("NEW: Undergraduate Investor Blog"); } Find returns with the Dividend Calendar if (Math.floor(Math.random() * 100) < 45) { document.write("UPDATED: Top-rated ETFs from TheStreet Ratings"); } else { document.write("UPDATED: Top-rated Mutual Funds from TheStreet Ratings"); } Twitter Facebook RSS Mobile App adsonar_placementId=1341369;adsonar_pid=879768;adsonar_ps=-1;adsonar_zw=320;adsonar_zh=280;adsonar_jv='ads.adsonar.com'; Brokerage Partners YAHOO.util.Event.on(window,"load",function(){ setTimeout(function(){ TSCM.util.attachScript('scr_intellitxt','http://thestreet.us.intellitxt.com/intellitxt/front.asp?ipid=10685'); },1200); }); Sponsored Links var ads = [ { link:"http://www.entrepreneur.com/business-opportunities/index.html?cam=thestreet&cid=Homepagetextlink1109", text:"Be Your Own Boss and Start your Own Business Today!", trk:null }, { link:"http://clk.atdmt.com/TNY/go/175928010/direct/01/", text:"Fly Virgin Atlantic Upper Class where every seat is an aisle seat.", trk:null }, { link:"http://ad.doubleclick.net/clk;220988988;44415082;v", text:"Step-by-Step Guidance to Your Maximum Refund", trk:'http://ad.doubleclick.net/ad/N5506.1199.0301731801621/B4084309.15;sz=1x1' }, { link:"http://ad.doubleclick.net/clk;221522636;43821936;e", text:"FedEx. 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