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Morgan Stanley's Grim Win-Win Scenario

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Either bank is solvent, or it gets billions in government bailout.

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Greetings from the Squared Circle, where I'm trading like Don King: Plenty of moves but no real conviction of late.

I took some of the SDS ETF ("Lolita" is her stage name) out for a date when we opened higher but was either prudent enough to sell or too cowardly to hold ahead of heading to the city. If we drop like a rock into the close - I was a coward. If we rip higher - I was wise to sell.

Regardless, I'm mostly in cash and am happy to just peck away at these levels. I'd rather miss a big move than walk into a trap; in my recent experience, if neither a 5% rally nor a 5% drop would surprise me, I'm better off staying home in cash.

What takes me out of cash and into some trades? The most likely suspect is the tone of President Obama's address tonight. In a time of crisis the nation is looking for something to believe in. So far the President has thrown Timmy to the wolves, meekly accepted a pork-laden stimulus package and complained about the state of the nation he "inherited."

If President Obama spends the bulk of his primetime speech tonight whimpering about the prior administration and offering blank checks to banks, what I'll be is more aggressively bearish. If he rises out of the swampland of DC and gives an honest assessment of the situation and the limits of what government spending can do, I'll be happy to own 'em for a trade.

I stand behind yesterday's view that the President is blowing his chance to give us a reason to believe. I believe he's been given a prime-time slot but hasn't looked "prime time" since the inauguration. President Obama: Fair or not, you ran for office and ostensibly knew the condition of the economy when you spent scores of millions on your campaign. I already know how we got here. Tell me how we're going to get out. Give us a time frame and play bad cop with someone other than the rich and/or Wall Street Fat Cats, and, Mr. President, you're my man.

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