The stock market was down without much conviction in the early going with the DJIA off 40 to 50 points. But someone must have pulled the plug somewhere as it has been dropping fast from about 2 p.m. and the Dow was down over 180 points as I pecked away at the keyboard.

What the heck changed overall market sentiment so suddenly? Some say it's oil prices drifting higher. That's always a good scapegoat and probably has something to do with it. It might also be a connected issue with the raging conflicts in the middle east and Africa.

There is always the negative sentiment about housing, employment, last night's democratic primaries in Indiana and North Carolina just muddling on. It might also be our current president just muddling on, or it might just be that all of these things just prompted some profit taking after weeks of appreciation.

Maybe it is my pal Warren's negative sentiment about the financial sector and the years of pain that may still need to be worked out of the system. Whatever it is you can be sure that after the market closes the Wall Street pundits will discuss all their presumptions as if they were facts...

UPDATE: The DJIA closed at 12,814.35 down -206.48, or -1.59%

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money.

John McCain is famous for many things. One of those is the McCain-Feingold Act designed to limit the role of corporate money in politics. But his actions suggest an eagerness to accept corporate money as a means to his political ends.

Here are three:

• Protects campaign contributor from S&L regulators costing government billions. In the 1980s, McCain intervened to keep regulators away from Charles Keating, a Savings & Loan operator, who contributed to McCain's campaign and let McCain's wife co-invest in a real estate deal. Keating's Lincoln Savings and Loan ultimately failed, costing taxpayers $3.4 billion.
• Sways $100 billion U.S. Air Force contract to European company. In February the Air Force awarded a $100 billion contract for refueling Tankers to EADS, the parent of Airbus, and Northrop Grumman (NYSE: NOC). As I posted, McCain's campaign finance chair was a lobbyist for EADS who arranged to send much of this contract to non-U.S. workers. McCain now employs the people who lobbied for EADS on his own staff. EADS retained The Loeffler Group to lobby for the tanker deal in 2007. Loeffler Group lobbyists on the project included Tom Loeffler, who lobbies for EADS and serves as McCain's national finance chairman and Susan Nelson, who left Loeffler and is now the campaign's finance director. EADS employees donated $14,000 to McCain's presidential campaign, more than any other member of Congress this election cycle; and

With economic reports and earnings numbers being released this week, we have been on a financial roller coaster. With regard to earnings numbers, we had General Electric disappoint, but IBM beat expectations and gave positive guidance for the future. Inflation numbers are high, but core inflation seems to be under control. The economy continues to deteriorate but does not seem to be falling off the cliff. How does an investor interpret all this? Is the glass half-full or half-empty?

The economy is clearly experiencing pain from the credit crisis. Even if we are not in a recession, it sure feels like one to the average person. Pessimism is the watchword of the day.

However, the big question is how much of this is already discounted by the equity market? I believe that the answer is that much of this is already built into market expectations. Unless we have another run on a major financial institution, the economy goes into freefall, or major oil supply disruption occurs, the market is already discounting most of the negative information.

In addition, we are approaching the November election. With a Republican in the White House and Democrats in control of Congress, no one wants to be blamed for a bad market or economy. The Fed is injecting a massive amount of liquidity into the system, and the tax rebates should be arriving shortly.

Does this mean a rally will arrive soon? It is a possibility. However, remember that the credit problems still remain. Any solutions will only be addressed after the election. The key variable is the rise in oil prices which is driving inflation. In the short term, it acts as a tax on the consumer and limits the Fed's options. As long as oil prices continue to rise, any rallies are likely to be muted and short-term in nature.

Doug Roberts is the Founder and Chief Investment Strategist for ChannelCapitalResearch.com and the author of Follow the Fed to Investment Success: The Effortless Strategy for Beating Wall Street. He previously held executive positions at Morgan Stanley Group and Sanford C. Bernstein & Co.

Speaking in Prescott, Arizona, Senator and presidential candidate John McCain weighed in on the topic of executive compensation, normally a topic discussed by Democrats. From The Wall Street Journal (subscription required:

And could I add, I think it's outrageous that someone who is the head of Bear Stearns (NYSE: BSC) cashes millions and millions of dollars in stocks. And I think it's unconscionable when the guy who apparently is the head of Countrywide (NYSE: CFC) and his co-conspirators make huge amounts of money while Americans are facing the threat of losing their own homes. t's a terrible thing.

While I'm glad to see that horrendous executive pay practices are now being discussed by candidates in both parties, McCain is really just playing up to populist causes with his comments about Americans losing their homes, and that's not the right reason to be mad about the pay packages that executives like Angelo Mozilo received.

Keep in mind that it's these home owners that are losing their homes that are the reason that Countrywide stock is in the toilet. Countrywide shareholders are not getting rich because people are losing their homes. Au contraire, Countrywide's loose lending practices had the worst impact on the company's shareholders.

As CEO of Countrywide, Mozilo's fiduciary duty was to the company's shareholders, and his pay should have been structured in a way that his compensation was structured to reflect the performance of the company. When the stock loses 80% of its value and Mozilo walks away with hundreds of millions, that's a problem, but it's a corporate governance problem, not a populist one.

Today's New York Times is buzzing with outrage over rising CEO pay. It trots out the usual suspects -- I'll call them pay ragers -- to rail against public company CEOs who get paid more and more each year regardless of company performance. But despite years of outrage, these self-styled pay ragers backed, in part, by union pension funds are not getting the results they seek. And due to their lack of political clout, their outrage is likely to persist.

The problem seems to be that CEO compensation is going up because performance-based compensation is not a big enough part of the total. As a result, even though performance-based compensation goes down, total compensation rises because the bonuses given at the board's discretion are bigger than the ones linked to performance. In 2007, average compensation for CEOs who had held the job at least two years rose 5% to $11.2 million. To be sure, performance-based bonuses were down in 2007, but the value and prevalence of discretionary bonuses rose.

It seems that pay ragers want CEOs to make less money if their companies don't perform. The Times quotes a Calpers portfolio manager who said, "We're not against pay. But we are certainly against pay for failure, or for just showing up." But it's more than that. In an election year, shareholder activists are hoping to tap into a deep vein of populist sentiment to enact policies that will narrow the pay gap between CEOs and their workers.

The Associated Press reports that Bill and Hillary Clinton made $109.2 million in the years since they left the White House. According to Drudge Report, Bill was the big winner. Details include:

They paid $33.7 million in Federal taxes and gave $10.2 million to charity. I would not be surprised if Clintons have had the most successful post White House cash-in of any presidential couple. No wonder she wants to get back there again. Think of how much more she could make after being president!

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Hillary Clinton appeared on Jim Cramer's Mad Money recently, and faced some pretty tough questions about the economy, financial markets and regulation.

Senator Clinton shined. She came across as well-informed, and Cramer spent most of the interview agreeing with Ms. Clinton -- impressive given that he also spent an entire interview giving attaboys to Ron Paul.

Senator Clinton was also impressive in her discussion of executive compensation where she lashed out at excessive compensation without banging the populist drum that gets many Democrats a bad rap. She explained that executives should be rewarded for creating great wealth for shareholders and that the "pay for pulse" compensation at many of these financial companies threatens to kill the goose that laid the golden egg.

Be sure to watch the video, regardless of what you think of Hillary: you'll probably be impressed.

Coming soon to investor email and mail boxes will be annual reports and proxy voting materials, complete with this year's shareholder resolutions. Hot topics this annual meeting season include the ever popular "say-on-pay." Shareholders are incensed that average or even sub-par executive performance and decision making is being handsomely rewarded with gigantic salaries and perks while they make due with crumbs. According to a recent article in CFO Magazine, 76 shareholder proposals dealing with executive compensation have made it onto the ballot.

Also on many ballots are shareholder resolutions dealing with socially responsible investing, particularly on matters revolving around the issue of global warming and/or climate change. So far, 56 shareholder resolutions have made it onto ballots. At least nine companies have taken steps to negate the need for such shareholder resolutions by rolling out policies addressing how the companies will cut back on greenhouses emissions and otherwise "go green."

As this is a presidential election year, there are at least 50 shareholder resolutions to force companies to disclose political contributions. These resolutions probably won't gain the necessary traction to force any action, but any resolution favoring greater corporate transparency is to shareholders' advantage.

New this year are numerous resolutions requesting senior management to disclose a company's exposure to subprime mortgage losses and secondary purchases in the mortgage market. This is a hot topic among investors right now, and many pension fund investors have taken hits. Look for union members to pressure their pension funds manangers on this one.

How will you vote on these subjects?

While Congressional Democrats and candidates for the presidency have spoken out in favor of more extensive help for distressed homeowners, the leaders of the Republican Party, including John McCain, have been more reluctant to support a bailout of people who bought houses they couldn't afford.

This is putting congressmen representing those areas hardest hit by foreclosures in a bind, as their constituents plead for help. What are they supposed to do?

This may be a case of a silent majority of people who oppose a bailout but aren't making much noise. People who are desperate to hang onto their houses tend to be louder than regular joes who just don't want their tax money being used for bailouts of irresponsible people -- Who wants to be seen as a judgmental curmudgeon?

I worry that politicians will compound the housing industry's problems because of political pressure, making doing the rational thing -- which may very well be nothing -- basically impossible.

When John McCain, in a rare moment of coherence got it right, the backlash was immediate, with an enthusiastic mob comparing him to Herbert Hoover.

The best bet for Republicans here is probably to stick to their guns on the no-bailout platform, and hope that the silent majority will get behind them.

Whatever your political ideology happens to be, I think we can all agree on one thing: Given the complex economic issues currently facing our country -- many of which will continue to be important for the foreseeable future -- our next president must be someone who understand economics.

To that end, the latest issue of Barron's looks at the backgrounds of each candidate (subscription required), showing something troubling: McCain's financial expertise is pretty much limited to having married a rich woman. That's a good strategy to be sure, but not necessarily the best background for someone charged with dealing with the current mess. Advising struggling homeowners to scan the obituaries in search of newly widowed socialites might not go over well.

Then there's Barack Obama whose experience in the market is, according to Barron's, pretty much limited to having once lost $13 thousand on stocks acquired through a blind trust. Barron's writes that "Small wonder he's giddy to raise taxes on interest and dividends. Obama has little skin in the game ... He's as insulated from his own dividend and capital gains proposals as a penguin is from the cold."

Hillary Clinton's net worth is very high, but she owns little stock. Her experience on the board of directors at Wal-Mart (NYSE: WMT) is intriguing but, looking at the available information, one thing is clear: None of these candidates can be considered an economics expert, something that we badly need, although George W. Bush's MBA from Harvard did little to avert the current mess.

Perhaps we'll get our economics expert from the other half of the presidential ticket. Private equity titan Mitt Romney is rumored to be a possible pick for John McCain, and there is some speculation that Barack Obama could pair up with New York Mayor Michael Bloomberg.

At a speech in Manhattan yesterday, Senator Barack Obama blamed lax oversight and deregulation for the housing sector's woes, saying that "Under Republican and Democratic administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practices. The result has been a distorted market that creates bubbles instead of steady sustainable growth, a market that favors Wall Street over Main Street but ends up hurting both."

He's right about that -- but his solution is to pump $30 billion into the system, in part to help bailout homeowners who were the beneficiary of overly aggressive mortgage lending.

His position makes no sense: If people were able to buy homes because of a distorted market caused by lax oversight, doesn't pumping in money to help them keep "their" homes just prolong the problem?

U.S. Treasury Secretary Henry Paulson said that the $600 rebate checks may create hundreds of thousands of new jobs. According to a Reuters report: "We know they're going to be helpful," Paulson said on CNN television. "These checks should be a big part of adding 500,000 to 600,000 additional jobs this year."

How can $600 create 600,000 jobs? With consumers pouring $168 billion back into the economy from these checks, the actual effect this will have on the economy could be double that amount. While no one can start a business on $600, the cumulative effect of 130 million Americans spending these checks will certainly add many to the employment rolls. I am not sure if you can pinpoint a number, but the rebate will definitely help.

If the government is going to get involved in trying to stimulate the economy, outside of tax cuts, this is the best way. Let individuals make the spending decisions that they think they need to make. This will prove to be much more effective than having the government funnel billions of dollars to some project. That method has been proven to be a black hole, as the government sends more and more money, while the bureaucrats claim it's not enough and ask for -- and get -- more. And the problem never gets fixed.

Let's see how accurate Paulson's projection will turn out to be.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/28/08.

In an interview with CNBC's Maria Bartiromo, Presidential candidate Barack Obama started to spell out his economic plan. Obama said that he would raise capital gains taxes, "Well, you know, I haven't given a firm number. Here's my belief, that we can't go back to some of the, you know, confiscatory rates that existed in the past that distorted sound economics. And I certainly would not go above what existed under Bill Clinton, which was the 28 percent. I would--and my guess would be it would be significantly lower than that. I think that we can have a capital gains rate that is higher than 15 percent."

Just because the Senator got rich from his book doesn't mean that the rest of us should be punished for trying to grow our savings and our investments. Why should the middle-class have to pay higher capital gains tax so that Obama can bailout irresponsible home buyers?

Hasn't he learned economics? It's pretty clear that if you punish and make it harder for wealth creation and investment, that there won't be as much, and as a result the economy will get much worse.

I never thought I'd be doing a post praising John McCain's wisdom, but here goes.

In the midst of calls from members of both parties for a big government intervention in the mortgage crisis, John McCain said in a speech in Los Angeles that "it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers."

Exactly -- Senator McCain is saying what needs to be said but isn't being said because of election-year politics. Democrats and some Republicans appear to be making a bet that you will win very few votes by saying that some people should lose their homes.

He added that "Some Americans bought homes they couldn't afford, betting that rising prices would make it easier to refinance later at more affordable rates ... Of those 80 million homeowners, only 55 million have a mortgage at all, and 51 million homeowners are doing what is necessary - working a second job, skipping a vacation and managing their budgets to make their payments on time. That leaves us with a puzzling situation: how could 4 million mortgages cause this much trouble for us all?"

While he should be commended for opening up his tax records, Democratic Presidential front-runner Barack Obama and wife Michelle should be embarrassed at the negligible amount of money donated to charity. According to a report in Bloomberg.com, " Democratic presidential candidate Barack Obama and his wife Michelle gave $10,772 of the $1.2 million they earned from 2000 through 2004 to charities, or less than 1 percent, according to tax returns for those years released today by his campaign."

To be fair to them they did up their giving a bit in '05-'06 after they cashed in on his book. Interesting to note that in that 2-year span they brought in $2.6 million. $2.6 million later and Michelle is still not proud to be an American. Humm???

For someone who believes that we need to change society and make things better, he sure sets a lousy example. After all, I thought he is all about giving back to the community. Well the community can't do very much with a couple of bucks.

Once again we find the hypocrisy of politicians. They know best how to make society better, and they have no problem taxing us to pay for it. But when it comes time for the politician to open up his own wallet, suddenly some excuse arises and they are unable to do so. Isn't that called a double standard?

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 3/25/08.