Ben Bernanke lacks a strategy to deal with the financial crisis. He just keeps dropping more and more money from his helicopter and hopes it will jump start the economic system. The futures market has already baked in a 50 basis point interest rate cut for this coming Wednesday so with the Dow having lost 312 points last Friday, it would probably collapse even further if Bernanke backed off the rate cut.

But what is the point of this cut? 30-year fixed mortgage rates are higher now (6.47%) than they were in August 2007 (6.45%) when the Fed began cutting the Fed Funds rate from 5.25% to what would end up being 1% if the Fed indeed cuts by 50 basis points on Wednesday. Paul Krugman argues that the high mortgage rates may be a result of U.S. policy not to put its "full faith and credit" behind Fannie and Freddie debt -- thereby increasing its risk. If the Fed was trying to loosen up credit, these numbers suggest its rate cuts are not doing the job.

And While there are some who anticipate it will cut only 25 basis points, I am not sure why the Fed thinks this rate cut will do anything more than use up precious ammunition that might be more useful in an even more severe financial emergency. At 1%, there is not much further to cut. And with the November election fast approaching, it is clear that a real strategy to analyze and fix the myriad financial problems Bush leaves his successor will not happen until January.

The results for the December quarter and all of calender 2006 are in -- and it proved to be a pretty good year. Corporate earnings, especially in the December quarter, were robust and managements were more open to allow a little breathing room for first quarter 2007. In other words, we heard optimism for 2007. As we entered 2006, managements were still very cautious with Wall Street, and would not comment optimistically about what lay ahead for 2006. Well, that's history. Let's look forward.

Value investing in 2006 proved to be the winning formula. Most well-run equity funds saw double digit returns and portfolio managers are now being paid their 2006 bonuses. But let's peel back the onion a bit and remind ourselves that past performance does not guarantee future results. The energy sector buoyed many a portfolio as we witnessed record profits, so much so, that if ExxonMobil Corporation (XOM) earns anything below $9 billion a quarter, it will be viewed as disappointing!!

Growth is back in vogue. Portfolio managers are moving into the sexier sectors of health care, technology and newer-consumer concepts. Money is moving out of financials, energy and the commodities. Since July 2006, the NASDAQ and the Russell 2000 have outperformed the S&P 500, the former up over 17%, the latter,13%. The in-flows into equity mutual funds crossed over $10 billion just for last week. New dollars looking for growth.

So where do we go from here?