The stock market recovered 485 points of yesterday’s selloff. Why? I think it was because of the SEC annoucement regarding mark to market accounting, but it could also be anticipation that Congress will eventually pass something. Frankly, I don’t know and I don’t think it makes any difference. Whatever is done or not done, the economy is facing some weakness in the months ahead. I think that weakness could have been avoided if our politicians hadn’t panicked the herd, but they did so now we’ll pay the price.

Suspending mark to market will go a long way toward calming things down as it will forestall bank closures, but it is not a panacea. The bad banks will still be out there and eventually they will have to be dealt with. Maybe if we can get some calm, the good banks can be encouraged to take over the bad ones. Of course, by propping them up, the good banks will have to pay a higher price so it’s not a perfect solution. It is a hell of a lot better than handing $700 billion to a Treasury Secretary to be named later.

If a Paulson like plan is passed, investors will have plenty of time to buy good companies at low prices because the recovery will take longer. If Congress just goes home, investors will have to act a little more quickly, but you’ll still likely have opportunities to buy on the dips as bad economic data comes out. In fact, you may get a chance Friday when the employment report is released.