With the results of the bank stress tests looming this afternoon, many people are wondering what the results will hold for the 19 tested banks. One of the banks tested but not named as much is Fifth Third Bancorp (NASDAQ: FITB); its results are of major interest in my hometown of Cincinnati, Ohio.

In the electronic version of the local fishwrap (The Cincinnati Enquirer), Erik Oja from Standar & Poor's was interviewed about FITB's situation. Oja contends that "Fifth Third will be required to raise capital ... How much is the issue."

First of all, let me say that Federal law prohibits the disclosure of all bank "stress tests" and bank examinations, so everything said here is pure hearsay.

Nevertheless, we have some good news: Banks are holding up well under Federal examination. All 19 banks will pass their stress tests. The bad news is that they still may need additional taxpayer money.

Three years ago the Swiss supermarket chain Migros started an in-store bank. We're not talking just installing ATM machines operated by a large banking conglomerate. These were actual full-service bank branches located right down the aisle from the meat and deli counters. All under the supermarket's own brand: Migros Bank. . . . What were they thinking, right?

Well, here's the thing: Migros has been a smashing success. How is that possible? Here's a tiny bank in a supermarket. Its primary role is to service store customers. The bank does not pay top bankers any bonuses. Nor does it engage in high-risk international investments.

Instead, it has a simple (some people might call it outmoded) business model. It collects deposits from customers and then turns them into low-risk loans. With this approach, Migros deposits surged SFr 2.6 billion to SFr 24 billion, even as customers, worried about fallout from the financial crisis, were pulling their money out of leading Swiss banks like UBS AG (NYSE: UBS).

In his column last week, New York Times (NYSE: NYT) columnist and Nobel Prize-winning economist Paul Krugman laid waste to those who argue that he's not critically assessing Obama administration programs. He offered a cogent critique of the U.S. Treasury's tardiness regarding the banking system fix.

Either temporarily nationalize those banks that are clogging the system, buy the toxic assets at unsubsidized prices, or announce some other market-valued removal plan to unclog the system, but let's put this train in motion, Krugman said, in so many words, to get to the root of the matter: We need to get credit flowing freely to facilitate commerce.

Lately, it has been as if every lesson from a first-year graduate seminar in public policy is being played out on the national stage.

Let's underscore one point: the nation appears to be nearing a policy to deal with the financial crisis. Investors should try to keep that at the forefront. Or maybe paste it on to their computer screens at work or in their home offices, so that they can maintain a sense of perspective. Yes, it's about a year late, but there was another U.S. president in charge then: the new guy's just arrived. Moreover, if calm prevails, the nation is going to get through this difficult period, this aftermath of the decade of policy errors, the decade of descent.

Most investors know about the United States' anti-state political culture: in America it's private sector solution first, public sector solution second.

And, most also know that what state that does exist is anti-central government: it dates back to our federalist origination. We're even reluctant to call something 'central' for this reason: we have a central bank, but it's called the Federal Reserve, not the Central Reserve. And it's the Internal Revenue Service, not the Central Revenue Service.

You might say that a key investor, one of the exemplars, is no longer bullish on the pure bulls. Or on the unregulated bulls. Or on the totally free market bulls.

Billionaire investor George Soros told Bloomberg News that the current global financial crisis originated during the deregulation of the 1980s, and signals the end of the free market model that has dominated capitalist countries, and indeed much of the developed world, since the the end of the Cold War with the break-up of the Soviet Union in 1991.

Investors should not read too much into the Dow's nearly 400-point drop Tuesday. What they should concentrate on, in the view of a pair of economists, is the mechanism the U.S. Treasury uses to price toxic assets.

The above is the most important 'unknown' in the U.S. Treasury's financial stability plan, so says economist David H. Wang -- how toxic assets that are clogging banks' balancing sheets and restricting credit -- will be priced.

"Will the United States government set-up a clearinghouse? Or will they design some type of open outcry, or managed open outcry? These are the key unknowns," Wang said. "Treasury Secretary Geithner and his staff cannot rush this decision, but on the other hand they cannot take two quarters to developed it. They have to announce the structure of the pricing program within a couple of weeks. I cannot underscore enough the importance of this pricing methodology. It will be the biggest factor in whether the credit system recovers, or something much worse occurs."

On a day when the United States committed up to $2 trillion more in government financing and programs to unlock credit markets -- probably the federal government's largest, one-day implied commitment in history -- the dollar rose against the euro and British pound.

The dollar strengthened 1.2 cents to $1.3821 and a gargantuan 4 cents to $1.4488 versus the British pound. The dollar also rose about one-half cent to $1.1584 versus the Swiss franc.

Now, in theory, increasing dollar commitments by the U.S. government means more dollars in circulation, which means every dollar is worth less -- a sequence that should cause the dollar to fall against the world's other major currencies. Not Tuesday, and really, when you review it, not since the financial crisis took hold in October 2008, so says economist David H. Wang. And the reason is basic: the dollar's status as a reserve currency, and as a safe haven.

Every once in awhile during a crisis or an event, you run across a quote or an observation that sort of summarizes events on the ground, in a nutshell.

New York Times (NYSE: NYT) business journalist Floyd Norris articulated one such observation during a roundtable discussion with other Times journalists on "The Charlie Rose Show" on PBS Monday night.

Regarding the bank bailout plan, Norris said, "This is a case where justice and success don't come together."

The two circumstances sort of symbolize the U.S.'s decade of descent, although opinions certainly will vary on what led to them. At minimum, they don't represent the most flattering moment in the nation's history.

Money manager Bernard Madoff, if proven guilty, will have substantially hurt, if not ruined, the financial lives of hundreds of investors -- from charitable organizations to Zsa Zsa Gabor -- in a $50 billion Ponzi scheme.

Meanwhile, on the heels of President Barack Obama's $500,000 compensation cap for executives and employees who receive federal government bailout assistance, criticisms have been voiced in and around Wall Street and in think tanks, with some executives complaining that the compensation is not high enough and/or that the federal government has no right to limit how much someone can be paid.

Let us know what you think.

It looks like tomorrow could very well become yet another "hang on to your hat Friday" or another edition of "As The U.S. Economy Turns."

Still, hopefully it won't become another 'down goes the Dow' day with an extended visit from our old friend, you guessed it, Dow 8,000. But analysts and economists haven't ruled the latter out.

The reason? The January 2009 jobs report, to be released by the U.S. Labor Department at 8:30 a.m. EST.

Following nearly a week in which a Fortune 500 company announced a major downsizing daily, and on the heels of December 2008's loss of 524,000 jobs, most professionals in economics and public policy circles are preparing for another sobering jobs report.

You have to appreciate the cleverness of this era's financial humor. (Note that I said, appreciate the cleverness, not love, or enjoy. That's because, depending on your perspective, the humor is either on-the-mark, or not that funny. But that is part of the subjective nature of humor.)

One joke making the rounds:

Question: What's the capital of Iceland?
Answer: $25.

Another: In the old days, banks lent money to people. These days, people lend money to banks.

New York Times (NYSE: NYT) columnist and Nobel Prize-winning economist Paul Krugman discusses bank capital and lending in his most recent column, and argues that the apparent likely Obama administration fix for the banking sector -- a combination of U.S. government purchase of toxic assets and guarantees against losses on other assets, each on terms favorable to the banks -- represents a lousy deal for the U.S. taxpayer, who'll end up "footing the bill for rescuing the banks."

It's a Washington, D.C. adage -- one that can help investors understand the public policy process -- and House Financial Services Chairman U.S. Rep. Barney Frank, D-Massachusetts, among others, have said it a dozen times, if not more:

"Congress doesn't get credit for not doing something or for avoiding something," Frank has said.

Case in point: TARP I, the initial $350 billion allocation in Troubled Asset Relief Program funds. The initial allocation has been widely criticized as ill-conceived. Some of the money has apparently enabled certain banks to approve large bonuses, allowed others to complete acquisitions or position themselves for the same, or pay-down debt, while not resulting in what Congress intended the allocation to accomplish -- increase lending to businesses and consumers.

The nutshell on the 2009 World Economic Forum held in Davos? It was a conference where nearly everyone agreed that the financial crisis started in and is primarily the result of U.S. policy errors, but agreed on little else after that.

Further, the Davos gathering produced almost no new insights regarding the nature of the crisis beyond what is already known: that excessive leverage throughout the system, arcane and in some cases Frankenstein-like derivatives, inadequate national-level financial regulation, and the collapse of demand, set in motion first the U.S. recession, then the credit crunch, then the global recession.