Pre-Market Outlook and a Plug for Sheila Bair

Yesterday succeeded in wiping out the entire gain from the monster move last Thursday. There is a total lack of conviction in this market. The pre-market has us sitting at the recent lows again. The futures were much more negative until HP announced earnings and beat expectations.

As I've said before, until the market breaks out of the trading range established in October, it's just a lot of flailing up and down. It does appear that the government has more or less succeeded in providing some stability to the financial industry. However, it could be argued that it is just a temporary band-aid. Institutions like Freddie, Fannie and AIG are still racking up big losses.

The big question is how bad will the economy get. There is no transparency on earnings, unemployment has not peaked, foreclosures are growing and there is no comprehensive plan in place to help homeowners. The only one who seems to be keeping her eye on the ball here is FDIC Chairwoman Sheila Bair but it's unclear how much support she has. After saving a few failing banks and now focusing on the underlying issues, she appears to be the most pragmatic, clear thinking person dealing with the crisis.