Wall Street got a big boost Monday after President-elect Barack Obama announced his economic team and the federal government stepped in to rescue ailing

Citigroup

(C) - Get Report

.

The

Dow Jones Industrial Average

surged 397.97 points, or 4.9%, to 8443.39. The

S&P 500

jumped 51.78 points, or 6.5%, to 851.81, and the

Nasdaq

jumped 87.67 points, or 6.3%, to 1472.02.

Jeff Macke said on

CNBC

's "Fast Money" TV show on Monday that the rally returned the market to last Tuesday's levels. However, Karen Finerman didn't find the rally comforting, given the fact that Citigroup had to be bailed out.

Joe Terranova said it was simply a "deeply oversold market" that wanted to rally on the news. Macke added the federal government is going to throw money at the financials until they fail.

Dylan Ratigan noted the disparity in treatment that the Big Three automakers received in Congress last week and the quick, secretive negotiations that led to the rescue plan for Citigroup. He said the automakers had said they needed to sell 14.5 million cars to be viable.

Terranova had serious doubts whether the automakers could reach that number. Finerman disputed the logic behind the number, arguing it's really consumers that determine demand.

Tim Seymour also had a dim view of the aid to the automakers, saying all the bailout would do is provide "access to more loans to produce cars that no one wants."

Ratigan asked Jaime Peters, an analyst with Morningstar Equity, to comment on the Citigroup bailout. She said the rescue plan would provide troubled Citigroup with a "great opportunity" to rearrange its business so that it can survive in the long run. In particular, it would give them the chance to reduce expenses and make deep cuts in headcount.

Cramer: Making Money With Obama

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Ratigan brought up Carl Icahn's recent thoughts on the matter and wondered whether making changes in the laws of Delaware would help stem the reckless behavior of corporate managers and boards. Finerman expressed doubts whether a change in those laws would necessarily lead to the results of making the sweeping changes that Icahn had in mind.

The Federal Role

Commenting on Citigroup bailout, Laura Tyson, a member of Obama's Transition Economic Advisory Board, told the trading panel that the "large government balance sheet must used to save those institutions at risk if those institutions are important" to the global economy.

In a sharp exchange with Ratigan, she insisted the money is not coming out of the "taxpayers' hide." She said it's been Obama's contention all along that the interests of Wall Street and Main Street are one. Rather than getting into a discussion on the individuals and institutions that might have profited from the system, she told the panel that it was important to look past that and at the problems at hand.

Asked about how the the size of the stimulus is going to be determined, she said the size of the stimulus should make up for the shortfall in demand, anywhere between $300 billion and $600 billion.

She emphasized the money is needed to invest in infrastructure projects at the state and local levels that have been halted as well as in alternative energy projects.

Cheap Stocks

Ratigan noted that Google news hits on "cheap stocks" have been up the past month and asked Finerman to comment on it. She said there are a lot of cheap names and a lot of expensive names that are cheap. Telling the difference between the two, she explained, comes down to looking at such factors as the business model and margin contractions when sales are down.

Terranova noted three stocks that have held up during the bear market:

General Mills

(GIS) - Get Report

,

Burlington Northern

(TEXT)

, and

Abbot Labs

(ABT) - Get Report

.

A Google poll of favorite stocks under $10 had these results: 49% for

Alcoa

(AA) - Get Report

, 34% for

Bank of America

(BAC) - Get Report

, 11% for

Citigroup

(C) - Get Report

, and 6% for

General Motors

(GM) - Get Report

.

Bleak Future

How bad is the economy going to get? Joe Lavorgna, chief US economist for Deutsche Bank, said that the economy is in "unchartered territory." He said the willingness of banks to lend is "cratering," calling it a "bad sign for the economy." He noted the last time that happened was in the second quarter of 1980 when the economy contracted 8%.

He said the future of the economy will hinder on the automakers: "If they go under, we're toast."

He predicted GDP will be down at least 41/2% this quarter and shrink next quarter, adding unemployment could hit 8%.

This article was written by a staff member of TheStreet.com.