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Hard Ball...Why Bother? By Charles Payne

I'm Hosting "Varney & Company" at 9:15 AM on the Fox Business Network

So the Super Committee is being formed and we are supposed to get excited that Washington will finally get its act together. I don't think so. As the lineups were being released, it began to feel more like the build up to a UFC fight than some kind of joint team designed to reach a common goal. In fact, I immediately went back to when I saw the movie "Rollerball" for the first time.

(I loved the movie; I'm talking the original, the remake sucked!)

Like the movie, this committee has the makings of being roller derby without rules, and we haven't even gotten Nancy Pelosi's contribution yet. Maybe the only thing is that expectations are so low and skepticism so high that these guys and gals get something done. But, in addition to ideological hurdles, lobbyists and PACs have their hooks deep inside most of these players.

The movie poster got it half right: we still have wars and Rollerball, or as they like to call it in D.C., a Super Committee.

The posturing began almost immediately as the sides were being chosen. If this is supposed to be the ultimate bipartisan group of people you couldn't tell from some of the special interests from fundraising and reelection obligations to lobbyist interests and connections. All the Republicans have signed the pledge on taxes to Americans for Tax Reform, so that means no new taxes. While I agree 100%, it does make this an exercise in futility. John Kerry spent all of last weekend hitting the Tea Party like the waves under his wind surfboard. The news of committee members had no impact on the market that I can tell, but their inability to come up with a deal could be another drag, especially as it is politicized.

It would be best to cut to the chase and pull those "triggers", which will crush our defense, but is going to happen no matter what. Some discretionary spending will be cut, but not only are entitlements safe, on Monday President Obama created the new entitlement of unlimited unemployment insurance. For now, here are your players and their top campaign donors according to

Troubled Banks

One of the reasons the market is so worried is because bank stocks are falling apart. In the eye of the storm is Bank of America (NYSE:BAC), which seems to have made every mistake possible, beginning with the purchase of Countrywide Financial. One thing nobody is talking about is the bogus accounting that was slipped back in place in April 2009. On April 2, 2009 FASB, after being pressured by Citigroup (NYSE:C), Bank of America, and Wells Fargo (NYSE:WFC) passed new rules on fair value. The organization was also under pressure from Congress, which put the FASB Chairman through the hot lights treatment a few weeks earlier. Steny Hoyer said "some easing was probably appropriate" with respect to looser rules. So in a vote of 3 to 2, FASB allowed mark-to-market accounting based on an assumption that banks would use "significant" judgment.

The rule was applied to first quarter earnings which came in higher, some believe 70% higher, than mark to something tangible and real. Bank stocks took off, the stock market took off.

Data Does Matta
By: Brian Sozzi, Equity Research Analyst

Some of the more granular data on the market is flashing mixed signals. For example, the dividend yield on the S&P 500 is inviting on a relative basis to Treasuries, but the cyclically adjusted P/E ratio (used by Robert Shiller) uproots the compelling valuation argument being mentioned in various circles that apply the trailing-twelve month methodology.

* The Dow is down 16% from its April 29 peak, 4% away from being defined as in bear market territory.
* The yield on the S&P 500 is now higher than the 10-year note rate, the first time that has happened since May 2009.
* Wednesday marked the fourth day in August that the Dow has closed more than 2% higher or lower. In contrast, there were only two days with moves of 2% or more in the first seven months of the year.
* At the end of July, the S&P 500 sported a P/E multiple of 22.9x, applying the cyclically adjusted approach. At this past week's intraday low of 1,167 for the S&P 500, the adjusted P/E was only 20.2x. Note that the historical average for the past 50 years of 19.5x.

Initial Jobless Claims
By: David Urani, Research Analyst

Initial jobless claims were 395k last week, falling from 402k in the previous week, and below the 405k consensus. There seemed to be wide reports of fewer layoffs in transportation and industrial jobs among the states with the biggest decreases. Continuing claims were down to 3.69 million from 3.75 million. At this point in time, people may be looking at whether 99'ers are now cycling over their benefits in large amounts.