Some bad news/good news market philosophy from yesterday's Nelson Report:

OBAMANOMICS...every commentary we read about the Obama Administration's response to the financial crisis is that for the markets, nothing seems to matter except "fixing the banks"...defined as taking all those toxic loans off the back of the credit market, so business can get what it needs to keep employment from continuing to fall off the cliff.

This is very bad news, it's increasingly becoming clear, since "everyone" also now agrees that the markets will continue to tank, in the absence of a "bank plan" it believes in.

That's because the Obama folks seem to be telling us that there will BE no immediate satisfaction of this "demand", since the President and his advisors realize that whatever they may want privately, Congress isn't going to vote the trillion (or perhaps two-trillion) needed to really clean up bad bank debt.

More after the jump

But let's step back 10 feet and listen to experts like ISI's Tom Gallagher.

Tom advises clients this morning that the good news in the bad news may be that "investors are giving up on policy".

"We've noted before that the role of government policy during the financial crisis has been to cause false rallies, as investors have exaggerated views on what policy can accomplish - or are in denial on just how bad deleveraging will be for the economy and markets.

"Part of the problem is that the scale of the problem keeps getting bigger as policy continues to fall short...

"So here's our 'deep thought' for the day: if market bottoms are
psychological and require capitulation by investors, then it can be said that investors are close to that attitude now, on policy.

"The increasingly held view that policy is ineffective in dealing with the credit crisis (and very possibly counter-productive) may be a reason to feel good about market prospects next year.

"The notion that policy is impotent, along with commentary on avoiding
stocks, are the sorts of things that can define market bottoms".

There now! Don't you feel ever so much better? Bank plan, schmank plan.