This blog post originally appeared on RealMoney Silver on Nov. 24 at 7:37 a.m. EST.
During the deepest depths of one of the worst financial crises in history, where are President George W. Bush and Treasury Secretary Henry Paulson?
I have consistently
of the need for bold and decisive personnel and policy measures to stem the economic free-fall. Friday and this weekend brought some personnel announcements from the incoming Obama administration, and the
came to the rescue of a levered
, but we need more collaboration between the incoming and outgoing administrations in order to foster confidence in our economy and stock markets.
Now, many previously optimistic types, such as
, are chiming in with the notion that this time the economy and credit markets are
and that, in all likelihood, the economy's downturn will be harder and the duration of the recession will be longer than previously expected.
That acceptance might be the first step toward Mr. Market's recovery, however, the more the market "is allowed" to behave in this manner (ever lower and increasingly volatile) before the Obama inauguration in January 2009, the less the likelihood of a significant rally and the more likely that the economy will be crippled and unable to recover in a real way for some time to come.
It is imperative for the current administration to step up and work closely with the Obama transition team and with Congress.
Today is no time for partisanship -- we are in a deepening global downturn of unknown proportions -- rather, it is the time for policy "shock and awe" in the face of accelerating crises (especially of an automobile and financial kind) and continued degradation in home and stock prices.
Unfortunately, the collective heads of the current administration remain firmly in the sand, as they have been extraordinarily reactive throughout the majority of the financial/credit turmoil. Perhaps the Bush administration is now engaged "behind the scenes," but as we approach the Thanksgiving and Christmas holidays and after listening to Treasury's Paulson's "swan song," in which he merely provided a historical time line to the crisis, I somehow doubt it.
Current inaction will extend the short-term economic risks, as Ben Stein suggested in
The New York Times
yesterday, to the intermediate term.
As clearly indicated by the market's response to the Geithner appointment on Friday, proactive measures will be market-friendly, and, as I have
, my crystal ball says that a vigorous year-end rally is possible. As more time passes and policies are not implemented, however, the prospects for a sustained rebound in the world's stock markets are becoming a more
President Bush and the Treasury's Paulson must get more engaged in the coordination of broad policy moves by the incoming Obama administration so that legislation can be adopted immediately after the inauguration -- if not earlier.
Doug Kass writes daily for
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Doug Kass is founder and president of Seabreeze Partners Management, Inc., and the general partner and investment manager of Seabreeze Partners Short LP and Seabreeze Partners Short Offshore Fund, Ltd.