Jim:    Next week... next week... hallelujah... the Federal Reserve meets... and your Game Plan is to watch and wait to see if we get a rate cut... maybe even down to 1% from 2%, although I could live with a 50 basis point (i.e., 0.5%) cut, to 1.5%... Alright, I'll take a quarter-point cut...

That would allow the banks to rebuild their capital reserves by doing what they do best... pocketing the difference between the meager interest they pay you, the depositors... and the interest they get from their borrowers... the net interest margin... which should expand, and mean more money for the banks, if we get that rate cut. And the rate cut would actually insure, for a moment, that we're in good shape, until we work out all these problems...

But... you can't count on this Federal Reserve...

Even with the dollar practically ramping every day, although it took a big breather today... even with oil prices virtually in free fall, from $148 all the way down to $99... even though we've had the biggest gold decline in 8 years... even though there's a massive and absolutely balanced everywhere commodity collapse... even though unemployment is now, I believe, headed to 7%... all fabulous arguments for rate cutting... I can still see this Fed issuing the same kind of bogus statement we've seen since the crisis began...

What's the statement?...

Oh, it's worried about inflation and recession... We need to be vigilant and watch... because the declines in commodities could be temporary... Pricing pressure is still with us... Yes, we have to be concerned about job losses, but we also see job gains in robust regions... and good consumer spending... so we are going to sit on our hands and do nothing...

Yes, the usual, clueless litany... oblivious to the raging deflation all around us since the July 15th peak in commodities... the dollar, oil and just about everything else...

Unfortunately, this time the "we have to be vigilant" boilerplate nonsense and inaction isn't going to cut it... The bears were able to crush, maul, spindle, annihilate Lehman Brothers (LEH), Washington Mutual (WM) and American International Group (AIG) this week... and, until we see another rate cut, and rules from the SEC against bear raids, including a reinstating of the uptick rule, and no more naked shorting... both of which, combined, can crush any financial institution, even the biggest ones... this process will keep playing out, until all the weak institutions get whacked...

The SEC put through all these changes that were meant to stop the shorts, that came from the '30s... They put them all through, because they're laissez faire guys and they had some clown academic check off on it... and most of the brokerage houses were in favor of it. Oddly, isn't it, it's their own demise...

So why are the brokers and the banks struggling so much?...

Now here's one thing you haven't heard about or seen anywhere... The financials institutions are having such a hard time this week, because Hank Paulson, the Treasury Secretary, didn't just wipe out the common stock of Fannie and Freddie last Monday... he also crushed the preferreds... That was another way that banks raise money... and people didn't expect that. You see, this was a whole underlying market that we don't talk about much, that help the banks raise capital. And, by wiping it out, Paulson has almost made it impossible for weaker institutions, like Washington Mutual (WM), Lehman Brothers (LEH) and AIG (AIG), as well as other major banks, to raise money.

You wouldn't see it if you aren't watching preferreds. But, if you are, you would know that they're getting annihilated bad.

The bear raids are ready. The SEC's watching from the balcony and saying, thumbs down...

Frankly, it's all unfolding for the institutions that we talk about... according... well, let's just say exactly... exactly as I said last August in my rant... They lost their jobs and the firms went out of business...

Meanwhile, Bernanke fiddles an inflationary tune, while deflation rages...

I guess the old Princeton Tiger... wants to hash it all out at the University cottage club... no doubt, over a good game of Canasta...

No rate cut, no good news for major financial institutions, and the bear raids are on!

It doesn't mean the bears will win. We've heard the death rattles coming from LEH, AIG and WM... So maybe the market can just move on. But what about the remaining financials? Hopefully they are either too big to fail... fingers crossed... or capable of getting government loans.

But, judging by the amount of puts being bought on Citigroup (C), by short sellers, I think we may still have more bear raids ahead.

So what's the play?...

You watch, you wait... If the Fed cuts, then I'd be a buyer of the Fortress Four banks... JPMorgan (JPM*), US Bancorp (USB), Wells Fargo (WFC) and Bank of America (BAC)... Hey, most of those stocks are doing great today, because the biggest obstacle to their going higher will have been taken care of. Those are too strong for the bears to take on... The Fortress Four will turn the bears into Yogi, Boo-Boo, Gentle Ben and Smoky.

Beyond the financials next week, I expect oil to go below $90, if there's no hurricane damage, so the Happier-Days-Are-Here-Again stocks, United Parcel Service, Inc. (UPS), Walt Disney Co. (DIS), Kimberly-Clark Corp. (KMB) and the like are going to be great.

Ford (F) and General Motors (GM)?... Oh, c'mon... They'll get their handout. It's an election year.