Investors awaiting Tuesday's expected interest rate cut seem to be forgetting that Fed Chairman Ben Bernanke is an economist. He isn't a magician.

E.S. Browning of the Wall Street Journal (subscription required) argues pretty persuasively that investors may be pinning "too much hope" on the rate cut.

"...such a rate cut would offer little immediate help for the fundamental problems weighing on the nation's economy and financial markets," he writes. "These include a worsening housing slump and high gasoline prices, which are damping consumer spending, and fears of further defaults on the billions of dollars of low-quality loans that have been used to finance mortgages and corporate takeovers."

Of course, investors will be over the moon after the rate cut is official and send the stock market skyrocketing. But don't order the champagne yet. Goldman Sachs Group Inc. (NYSE: GS) Chief US Economist Jan Hatzius told the Journal that the impact of the rate cut may not be as great as it was in 1998 when, unlike today, the economy's major problems originated outside the U.S.

In addition to waiting for puffs of white smoke from Bernanke & Co., investors will be paying close attention to the Wall Street firms. including Goldman, Merrill Lynch & Co. (NYSE: MER) and Lehman Brothers Holdings Inc. (NYSE: LEH), that report earnings this week, to see how ugly things have gotten.

Of course, markets don't stay in panic mode forever but remember it took years for the subprime mortgage crisis and credit crunch to develop. A single act by the central bank can't solve these problems overnight. Investors need to set their expectations accordingly.