It's all about time and timing, I guess. Yesterday the market was holding on and fighting tooth and nail until right around the time it was reported the Air Force tanker refueling contract decision would be scrapped and the process started over.

Sure the market is focused, laser-like, on the financials, but I sense the bottom fell out after the system of due process was overturned.

Not to belabor the point but once again we see that the health of the financials is more important to the health of the stock market than the price of crude oil. That actually makes it a scarier situation since there is nothing the masses could do right now to affect the situation in financials, one less trip to grandma's house or the mall isn't going to shore up the balance sheet of Merrill Lynch (MER) or Citigroup (C).

The market will be on pins and needles until and perhaps even past the next round of earnings reports from the financial sector.

It seems that once the news broke any resolve the market had vanished.

I'm not saying investors had any skin in the game: Indeed, most would love to see more American jobs created from this mammoth tanker deal, but the market groaned because politics are usurping the system and that could be a sign of things to come. Boeing (BA) says the bidding system was rigged or tweaked in some kind of way that was unfair and the Government Accounting Office came to a similar conclusion. It would be silly, however, not to think it was political wrangling that led to yesterday's news. This is what I'm worried about and why I think the market reacted so negatively to the news as well. There was a time when Boeing was the undisputed king of skies around the world but in recent years lost the title to Airbus and its parent European Aeronautic Defense and Space Company (EADS).

There are no doubt massive subsidies and sweetheart deals that propelled Airbus over Boeing but there is also the fact the former is making products that are truly in demand.

Crash Position: Cover Your Eyes, Ears and Mouth

This sounds like a familiar story (read: US automakers) and there are numerous cautionary tales as a result of this situation.

The Air Mail Act of 1934 broke up Boeing into what is now the aircraft maker, United Airlines and United Aircraft Corporation (later to morph into United Technologies). Hmm…imagine the might all three of those companies together would have today on the world stage.

Competition is supposed to regulate industry and while it's true monopolies make the playing field uneven it's also true breaking up colossuses in the past and beating down companies via anti-trust litigation may have backfired in many ways.  

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In the 1980s this sort of battle almost totally derailed International Business Machines (IBM) and we are now witnessing the so-called "Baby Bells" merge into what could one day be the original AT&T (T). Microsoft (MSFT) has been hampered by transatlantic issues over its success. While we have been cognizant to level the playing field the rest of the world has been nudging their businesses and industries along with tax breaks and government assistance.

Boeing is the nation's largest exporter. What happens if this $40.0 billion contract is taken from Airbus and its U.S. partner Northrop Grumman (NOC) and given to Boeing?

Boeing has been making planes for the Department of Defense since World War II and they say they didn't understand the process. It just doesn't jive: I consider myself pro-American and that's why this whole deal stinks. If protectionism is chosen over fair competition then brace for a reaction from abroad. This comes just in time as exports are the shiniest part of the U.S. economy, and do we want to upset that apple cart? Remember the lessons of the Great Depression and the knee-jerk decision to erect trade barriers.

Boeing tried to pawn off a (not-so-souped- up) commercial airliner as a tanker and it didn't work. We could save U.S. jobs and replace those 179 tankers with an inferior product but at some point it's going to hurt and hurt badly. 

That $40.0 billion is a heck of a morsel and maybe worth throwing away our soul and consciences but propping up an inferior product eventually comes back to haunt everyone, including the biggest beneficiaries.

America looked the other way and we bought with our hearts affixed to the flag and the Pledge of Allegiance, until it was simply too much strain on our wallets. I think the country is on the verge of voting for policies that ignore the global economy and instead will protect jobs and wages not competitive outside the nation. We can't have an insular nation and we can't put the genie back in the bottle. The world has latched onto American-style capitalism and maybe we should, too.
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We can treat this Boeing situation like the three monkeys that see no evil, hear no evil and speak no evil but that is a mistake. Yes, we need our largest corporations to be competitive and that's why it is a mistake to tax them more than we already do but it is also a mistake to coddle them when their products aren't up to snuff, especially if it means our military has inferior products.

Ultimately the Air Force tanker program will reach $100.0 billion and replace 500 planes. I'm sure the pie will be sliced up in a way where everyone gets a piece, even those companies with lesser offerings. This is another wakeup call: We can't hit the snooze button because it's only going to get tougher.

A couple of years ago Boeing moved its headquarters to Chicago in order to be more competitive. It's going to take more than a new zip code to play the game in the future. If the new bidding results in the same result, it would be a victory for America even though a short-term loss for our greatest exporter.