Okay, Congress. Time to fess up. What do you know that you're not telling us? All the talk this week is about getting this bailout done before Monday's open. Why so urgent? Nobody in the world can predict market action with precise accuracy. Yet, what we've been hearing constantly is about a potential market meltdown on Sept 29 if this doesn't happen. Clearly putting the 'fear of God' in lawmakers, especially with an election just a short 5 weeks away is a good way to get things done. But this deal could have been done months, years ago. Without so much fanfare, either. But perhaps there is another unknown element we don't know about. I'd hate to speculate, but something does seem fishy. Perhaps a threatened withdrawal of capital by a creditor nation. China and Japan come to mind. A bigger bank bust than WAMU? Maybe a complete bust of the Federal Reserve is at hand. I really don't know what the reason is for such emergency action, but suffice to say Congress has been loathe to come forward with an explanation. Secretary Paulson was asked the reason for urgency numerous times this week only to balk at the correct answer: An answer we may never get from the powers that be. Aren't we deserving of the truth?

A Bank Failure Too Big to Ignore

Last week the Feds took control of WAMU and sold deposits and some assets to JP Morgan. These vultures waited clearly until the very last minute to bailout the huge bank, much like they did with Bear Stearns. Into their waiting hands, and with little risk to boot. But this bank failure cannot be ignored. The largest in history, WAMU has shown us the worst in banking decisions. The unprecedented risk taken by the bank while ignoring the signs had doomed them for the last few years. The evolutionary change is astounding, but that's where greed trumps good sense. Given the lack of transparency and stubbornness to mark assets appropriately also put this name on notice. After all, we may learn something from this case about how to do business in the future. If anything, the lessons learned will make our economy much stronger. Until dramatic changes are made, I'm afraid we're going to see more WAMUs on the horizon. The problem is just too big to handle with one mighty stroke of the pen.

Third quarter earnings season is just around the corner, and I don't think the market has fully discounted them. With banks writing off bad paper (FRM, FRE, LEH, WM, others), we can see some truly ugly numbers out. Add in the economy slowing down and visibility in most cases limited to a couple of months at best, we may not only see bad numbers but expectations taken down. Wouldn't be a surprise, of course. But is the market numb to such news? In other words, will the market rally off such bad news? Perhaps so, as we saw last week when the market rallied on GE's earnings cut. It's all a matter of perception now, but P/E's are still relatively high in this part of the cycle. We'll see how the market responds next month.

Price Headley is the founder and chief analyst of BigTrends.com.