The White House sent its version of the Volker Rule bill to Congress for debate. The Volker Rule, named for former chairman of the Federal Reserve, Paul Volker, would restrict the actions of big banks.

The Volker Rule would ban banks that take federally insured deposits from investing in hedge funds or private equity funds and from making trades that are for the profit of the banks, not for their customers, better known as proprietary trading.

Today felt like you were hearing the robot from "Lost in Space" saying "Warning! Danger!" as too many stocks to count followed the markets under key support levels. It really did feel that way as no one wanted to head into the weekend owning anything tied to financial stocks in case nationalization occurred. Mid-afternoon, the White House said that it preferred for the banking system to stay private. Low and stable CPI doesn't matter when things are headed to hell in a hand basket. The good news is that an end of day bounce erased many of the intraday losses.

Here were today's unofficial closing bell levels:

Dow 7,365.67 -100.28 (-1.34%)
S&P 500 770.05 -8.89 (-1.14%)
Nasdaq 1,441.23 -1.59 (-0.11%)

Top Analyst Upgrades & Downgrades

The American auto industry failure is no joke. There is no consensus regarding a solution and the stakes are very high for all of us. We cannot really fathom the complete repercussions from whatever approach we take to resolve this very difficult situation involving General Motors (NYSE: GM), Ford (NYSE: F), privately held Chrysler and the UAW.

There is still no resolution to the gargantuan task of re-working the U.S. automobile industry. The White House this past weekend said that while the administration is trying to work out various scenarios to rescue the ailing industry, it has not come up with a solution yet and the people involved don't expect to make any announcements for a few days.

I have been following the news about the auto industry like the rest of the nation and I have been writing about many of the issues that we face. Yesterday, I added a bit of irony Sunday Funnies: Feds could buy GM & Ford, but this is no laughing matter.

Well yesterday's operative word was "might" as in the congress might pass a bill to support the auto industry and prevent the potential bankruptcy of General Motors (NYSE: GM), Ford (NYSE: F) and privately held Chrysler. Things have changed and for now might has become won't -- as in nothing doing!

Republicans in the Senate clashed with the UAW, Democrats and the White House over a thinly viable plan to provide a $14 billion aid package to forestall industry collapse and give all sides the opportunity to improve a bad situation in the first quarter of 2009 under certain conditions.

The breaking point was the UAW's refusal to agree to immediate wage cuts. While headlines pronounce the deal dead, I say let's wait and see. After all this is Washington, DC, where any reasonable facsimile of the truth has a high probability of being posturing and pretending.

I have been following this saga all week and three days ago I posted Auto industry bailout: A bloated government to lead a bloated industry, when I did not see an easy solution for such institutionalized problems - on all sides. This was followed by Auto industry bailout: Oil companies should take over!, a very provocative suggestion that brought a multitude of comments from our readers, taking the bait. In a more congenial mood I continued with Auto industry bailout: Can't we all just get along? yesterday hopeful some good might come out of intense negotiations in the Capital. Intense yes, successful no, or at least not yet.

When companies collapse amid accounting fraud and massive governance failures, there is rarely anything left for swindled shareholders to sue for: if the company had assets to settle lawsuits, it wouldn't have collapsed.

Now the White House has sided with investment banks and filed a brief in a Supreme Court opposing the idea that shareholders should be able to seek damages from firms that were involved with the company. The SEC has sided with the plaintiffs in the case, and had hoped the Bush Administration would too. But it was not to be.

Securities Industry and Financial Markets Association President Marc Lackritz has one of the funniest defenses for not allowing investment banks to be held accountable:

"Investors already receive substantial protections under the law, and the Securities and Exchange Commission and other securities regulators are already armed with all the necessary regulatory tools to recoup lost money for investors,"

Hah! Try telling that to anyone who lost their life savings in the collapse of Enron.

There's really no reason that banks shouldn't stand to pay damages if they fail to catch a fraud at a company they are involved with. They are paid far too much money for the work that they do to just walk away when they mess up badly.

Here's a shocker: The Republican administration and the Democrat-controlled Congress cannot agree on Iraq, federal spending, Attorney General Gonzales' integrity (he should definitely resign - credibility now zero), the state of the economy or anything else.

So that may be a boon to the economy. When Congress was investigating President Bill's "panty-gate" and moving in the direction of impeachment, our economy blossomed! I have read that whenever Congress holds long, drawn-out hearings and does not pass any laws often, the economy does better.

How could this be? For one thing, Congress increases taxes more than they cut taxes, perhaps 10 to 1. Congress probably passes more restrictive laws instead of more empowering laws 10 to 1. And here is the most telling and least debatable -- every time they pass any legislation, they add all kinds of riders (as reported on the nightly news yesterday), with more "pork barrel" spending and pet projects added on the sly. The "Bring the Troops Home" bill about to be sent to President Bush by the Congress has more of the same -- what would you expect?!

So for the good of the economy, as strange as it may seem, in many cases, when Congress does less, we are all better off.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.

Today we are supposed to learn from the Federal Reserve Board if interest rates will rise. There is plenty of speculation as to whether rates will rise by a quarter point or a half point. I don't think they should do anything. I say take a rest for a couple of months, guys!

They have been sitting around trying to decide where the economy will be in 18 to 24 months. What are the chances they can figure that one out? Close to zero! What are the chances they cause a recession instead of preventing one? About 50/50! 

If they know whats going to happen 18 months out then why don't they each make a zillion dollars in the stock market? I would like to ask them where the price of gold, or oil, Microsoft or eBay will be in 18 months. They are speculating just like the Wall Street analysts!

When interest rates were 1% or 2%, an increase did not matter. But the higher they go the more each increase matters. They should take a breather and cogitate a while. It would show some financial maturity.

Here's my prediction -- if we have a little inflation in 18 to 24 months because they guessed wrong, then we can live with it. But if we are in a recession by then, then good or bad, the Democrats will be in the White House and the Fed will have put them there!

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