Reality Suspended in Rise of 10-Year Yield

According to the Washington Post, the address was two speeches in one and sent three themes to the country. The president plowed through his domestic initiatives and then moved onto his policy decisions regarding the Iraq conflict. The themes -- bipartisan cooperation, the threat of terrorism (and the need to be patient in the Mideast) and his visions for a robust domestic agenda over the balance of his presidency -- permeated his State of the Union address.

The Democrats said that his tone was less confident and that his objectives more constrained than in the past.

The president's allies, not surprisingly, objected to many of the Democrats' "knee-jerk" objections and initiatives (especially the health care position). Some, like Sir Larry Kudlow ("If it ain't broke, don't fix it"), seem to suggest that the economy should be the message -- and, in that regard, it's in great shape.

In the main, President Bush's speech was gracious and well written, but, like the Democrats' response, highly predictable. From the standpoint of investors, neither the Republicans nor the Democrats had anything incremental to say -- nor did it contain any new actionable investment ideas.