Late for a Very Important Date!

When logic and proportion
Have fallen sloppy dead
And the White Knight is talking backwards
And the Red Queen's "off with her head!"
Remember what the dormouse said;
"Keep your head!"

- Jefferson Airplane

I had the typical childhood growing up, including time with most of the classic fairy tales. However, I never read Alice in Wonderland, nor did I see any film versions until just this past weekend.

In many ways, I'm sure Tim Burton's version took some departure from the original, but I am assured by my wife the basic story is the same: Once Alice falls down the rabbit hole, everything becomes quite wacky.

Our trip down the economic rabbit hole began in the summer of 2007 when the first extendible commercial paper issues did something investors were told could never happen: They actually extended. But when fickle investors turn against a sector - especially one that depends on those same investors for liquidity - financial violence ensues.

And boy, did it.

But enough reminiscing about the good old days when we were still confident there were unmentionable "potential" actions the government could take, rather than viewing these same actions as historical precedents. Let's look forward to . well, to what?

Uncertainty has now reigned in the financial sector for too long. Washington's focus on healthcare - which to my knowledge did not cause any significant part of the current global financial crisis - has allowed partisans of both sides to skirt the true issues facing our economy for far too long.

I'm hopeful, with the recent healthcare legislation now signed and moving forward, that Washington will refocus on what ails us.

And there are signs that is the case!

First Barney Frank finally opened debate on what to do with Fannie and Freddie last Tuesday by holding hearings on the housing market. Treasury Secretary Tim Geithner, who has promised a full proposed solution in 2011, argued the federal government should continue to have a role in the housing market. No doubt it will, but only clearing up the details of their projected involvement will allow the private sector to resume allocating capital (hopefully doing a better job this time around!).

Second, of course, is Senator Chris Dodd's bill to reform regulation of the financial industry. As written, it is quite unlikely to pass, but who would argue regulatory reform isn't a necessity? The shocking lack of preparedness on the part of regulators over the past two years must be addressed, along with a few consumer and investor protections thrown in for good measure! (Isn't it almost as shocking we haven't begun this debate?)

Let's declare the "shock" of the financial crisis over and get to work repairing our economy (No, stimulus packages don't repair; they only delay). Let's also lay the groundwork to help minimize the possibility of such calamity in the future, without trading in the capitalist inertia that has driven wealth in this country since the colonial days.

Key Developments

Durable goods orders rose by 0.5 percent in February, as expected, with civilian aircraft orders up 33 percent. Stripping away the volatile transportation sector, durables were up 0.9 percent, almost double the rate expected. Over the past year, durables are up 10.9 percent, but still remain some 20+ percent lower than the 2005 - 2008 run rate.

In testimony before the House Financial Services Committee, Fed Chairman Ben Bernanke discussed the strategy for exiting from the Fed's historic lending and monetary practices. There were no huge surprises in his remarks as he reiterated comments that the "economy continues to require the support of accommodative monetary policies."

FDIC Chairman Sheila Bair said in a speech Friday that they are considering extending the insurance program for deposit accounts. Approximately 6,900 banks originally signed up for the so-called TAG program and the concern is whether funding for regional banks will dry up without this extended insurance.

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