Farrell: On a Day Like Today: Un-React

What are you gonna do when the financial world is falling apart, again. This has to be the 12th or 20th (maybe 50th) time the world has ended during my career.

The one thing I have learned is to not react. Un-react since any action taken in haste or with a tinge of panic is usually wrong.

The other thing I like to do is share thoughts and ideas with the wise old heads I have had the good fortune to have meet over the years. So the past few days I have read even more intently the notes from long time pals like Uncle Dougie Kass, Grandpa David Kotok (when he isn't fishing), Art "Flash" Cashin, Ron "Golden Locks" Insana (OK - he isn't old, but he thinks old), Brian "The Man" Belski (another youngster, but it's good to see the lineage continue), Sydney "Multi-Grandpa" Williams, Greg "Washington" Valliere (who looks very young, but is borderline ancient), and others. I know I forgot someone important to me but age is a very good excuse.

I was reading Stefan Abrams, of Bryden-Abrams, last night. For a guy who carries the burden of having gone to Haaarvard (that is how it's pronounced), so often referred to as the Princeton of New England, Stefan is one of the smartest I have ever met. With his permission I quote from his self-described diatribe of yesterday. "If the currently vulnerable US economy, which is now operating at stall speed, drops into a recession, it will be the first since 1937 which was caused by flawed policy decisions".

Amen to that.

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The disgraceful conduct of our politicians on both sides of the aisle, all the doom and gloom predictions fomented to make their points have collapsed confidence, stalled the economy and unnerved an already nervous financial market.

Maybe a 2.5% yield on the 10 year Treasury is a result of a flight to quality, but maybe it's a harbinger of a coming recession.

The good news is that if Washington will not get out of the way (far too much to hope for) but at least stop the most destructive of their habits, American ingenuity will have a chance. But if we continue to castigate millionaires and billionaires (success is bad?) , blame the banks for everything (didn't Congress declare the American dream of home ownership be available to everyone and dictate that lending practices had to accommodate that?), accept no responsibility or accountability, we are going to have a difficult go of it. To criticize equally, the other side has to recognize that compromise is our political way of life and , please God, the 12 members of this super commission recognize that, and open the tax code to revision. I believe any hint of a move towards sanity would stabilize, if not rally, the market. And, this is key, encourage some of that enormous store of corporate cash to be spent on creating jobs.

Speaking of jobs, we have a big number tomorrow. The consensus is for 114,000 new jobs. Any big deviation on either side of that could be a market mover. Like we need another market mover.

I notice that oil is down big today. Last print is below $87. I have speculated oil could go to $75. Now would be a good time for it to happen. A price that low would greatly ease the consumer burden. I am not a big believer in the power of government to cure all. The government said that for every $1 in stimulus, $1.50 in output would result. I want what they were smoking. Not even close. Having said that, I think the payroll tax cut should be extended and that extended unemployment benefits be as well.

Those guys calling for a QE 3 are reading different reports than I am. The Q's have not helped. Although QE 1, I think, was needed to restore confidence. But Ben should stop paying interest on deposits held at the Fed. I doubt that would compel banks to lend the money, but it can't hurt the effort. Normal actions taken by the Fed are designed to , in this situation, lower interest rates. But the two year note is at .27%, the ten year at 2.5% and the average 30 year fixed rate mortgage is 4.39%. All record lows.

The global economy was dealt two huge external shocks; the Japanese tsunami and the oil price shock. Nothing you can do about them. But the man-made nonsense, the politically manufactured debt-ceiling fiasco, and the inept handling of the Euro zone solvency situation are addressable and correctable if there were only leadership and political will. History is full of examples where crisis begot leadership. Think of Churchill (We shall fight on the beaches, We shall fight on the landing grounds, We shall fight in the fields and in the streets, We shall fight in the hills, And we shall never surrender) and so many others. Comparing the titans of history to the petty politicians of today is depressing. But that's what elections are for.

We are into scary stuff and it smells of panic. The market is very oversold, but it can get more oversold. I like the values being presented and since none of us know where the bottom will be, buy cautiously with the belief that this too shall pass.

Vincent Farrell, Jr. is chief investment officer at Ticonderoga Securities and a regular contributor to CNBC.