I get it that it's human nature to ignore warning signs and drown out unpleasant cries that make us uncomfortable. But, why the warnings from the Inspector General of the TARP seem to fall on deaf ears is beyond me. Neil Barofsky is one of the few people involved in this TARP fiasco without an axe to grind. He has been honest from day one and yet Wall Street treats him like that one guy in every town that walks around with a sign saying the end is near. Essentially, Barofsky is concerned that TARP has done the unthinkable. It has made the "too big to fail" banks bigger. The program has invited fraud, as there were 25 new criminal and civil probes initiated in the fourth quarter to bring the full year total to 77 active cases. All kinds of fraud are being looked at including:

> Insider trading
> Accounting fraud
> Mortgage fraud

There is suspicious stuff going on in the PPIP program; heck I thought they shelved that thing, but instead a handful of money managers are buying stocks and splitting profits with taxpayers who are taking almost 90% of the financial risk. Anyway, apparently one of the players sold a position that was bought oddly higher by the program. Then there is the concern about other programs like HAMP, where $75.0 billion was set aside to induce banks into modifying home loans. This program has been a disaster from the beginning, but maybe it is even worse than that. According to Barofsky, through December only 66,500 of the 700,000 homes in the system have received permanent modifications. Yet, the Inspector General cautions that once government aide fades away the housing market will take another major tumble.

In the meantime the market finally got a break, a long-awaited break on really good news. Manufacturing has been coming on nicely and might be the silver lining to a weak dollar policy. There is no way demand is at a level domestically to sustain the trends in the ISM report, so it comes down to exports. As I mentioned after the SOTU address last week, the idea of doubling exports in five years isn't far-fetched but it could be a problem if it only happens as a consequence of a beaten down currency. Moreover, the White House has to find a way to force markets abroad to open even more. I only found out yesterday that Japan's Cash for Clunkers program excluded U.S. made cars. In the US version of the program 677,017 cars are credited with being purchased out of which 319,342 were from Japanese companies.

So the debate is does it matter if these cars were actually made in the USA where Americans work and benefit? That is a sticky wicket, and of course hard to argue against. But, 115,400 of those Japanese cars were exported to America (including ever Prius). Our auto analyst David Silver brought up another interesting point, that even Ford (F) imported some of its most popular vehicles under the cash for clunkers program from Mexico.

Japan launches their program and excludes American cars, got it. I've found out that last month they finally changed the program and will allow cars made in America to be part of the program. Is it a Pyrrhic victory for America? Well, Japanese automakers sold 319,342 cars; it is estimated U.S. car companies will sell 700. This says that Japan was simply being asinine from the start, and only precluded American cars as a message. It was a message that said America has less financial muscle than it thinks it has and also that American-made cars suck. That is a tough pill to swallow. If we are going to become an export powerhouse we have to make other nations play by the rules. I'm told Germany's Cash for Clunkers, the program that inspired ours, didn't allow U.S. autos. I'm not sure that was the case (still searching) but theirs was a huge program of $7.1 billion. Then, there's China. The rhetoric is increasing as the sale of weapons to Taiwan is the latest example of America irking China.

Some form of retaliation has been promised. It's time to say "bring it on" and time to say "tear down this wall" with respect to barriers to free/fair trade.

The Market

Great day yesterday, but was it a flash in the pan? I don't think so, and hope not. But! The market faces a gauntlet of economic data tests this week that culminates with the jobs report on Friday. Like I've written about over and over investors were bracing for this moment. The general feeling is a big-time pullback is overdue. There was interesting data in USA Today on the fact about the infamous 10% correction. Since 1928 (29,977 calendar days), there have been 93 10% corrections or every 322 days. It has been 327 days since our last such correction. One good day does not a trend make, but we saw great stocks make handsome moves and remind investors that when the coast is really clear there could be huge and swift upside gains. For now, there are key upside resistance points, including 10,200 and 10,500 for the Dow Jones Industrial Average. If we end the week north of the latter then it's time to become very aggressive.

At some point the stuff that worries Neil Barofsky will become Main Street issues; the fact is they already are but everyone ignores the man with "The End is Near" sign until it's too late. The worst case scenario doesn't have to be the outcome. There is going to have to be some mass epiphanies or somehow the entire applecart has to be upset. For now, there could be another window of opportunity to make money, but as we look further outside that window it's clear the war on business must change and the notion of taxing the so-called rich isn't the panacea it's touted to be, just punishment for taking advantage of the opportunities provided by the greatest nation in the world.

Color on Whirlpool Corp. 4Q Earnings
By: Brian Sozzi, Research Analyst

This morning, Whirlpool (WHR) announced its 4Q09 and FY09 financial results to a market that has consistently poured cold water on better than expected earnings and guidance this season. However, we had confidence in our analysis prior to the release, which was supported not only by a firm undervalued line of reasoning, but strengthening global industrial production trends, mostly encouraging U.S. housing data, and indications that Whirlpool was ramping up production to support international growth. Initially, the stock was bid lower in the pre-market, despite the numerous positives in the report and guidance that far from implies doom and gloom on a global scale. Since the report was released at 6 am, however, the stock has fought back due in our view to the solid nature of the results.

The stock is an open recommendation on our Hotline service. Please view www.wstreet.com to read remainder of piece.