Exxon Mobil was up a little more than 17% today. That works out to a gain of roughly $50-billion in market capitalization, or about the GDP of Luxembourg -- or six pre-Monday Morgan Stanleys.

Expecting that we would have a market bounce Monday -- albeit nothing like the ultra-super-pogo-sproing thing that we did -- I launched a contest this past Sunday night. The idea: People had to predict how many times on Monday between 7am and 7pm EST the word "bottom" would be uttered on-air at CNBC.

The guesses flew in, around 50 at last count, and they ranged from zero to hundreds. I am told (although I haven't calculated it) that the mean guess was for 222 "bottoms", but the standard deviation was fairly monstrous.

So, what was the right number? Courtesy of the fine folks at TVEyes (whose service I am testing for a semi-related project) the number of times the word "bottom" was uttered on-air on CNBC Monday in that 12-hour stretch was ... 46 times, or slightly less than four times per hour.  (This number could be low by a couple of mentions, as the conservative TVEye people made clear, but my wander through the transcripts supported the figure.)

Our winner is Andrew Meyer, who guessed 47 "bottoms", which was spooky-close to being correct. Andrew, congratulations! Once you've emailed me your coordinates your lovely parting gift will be on its way.

Thanks everyone!

And as a closing aside, I'm not sure if it's bullish, bearish, or something else altogether that so many people guessed so much higher than proved to be the case. After all, 300 "bottoms" in 12 hours is almost 2.5-times per minute. While that's not quite like saying "Malkovich Malkovich Malkovich", it's darn close.

Some interesting comments last Friday on Charlie Rose from investor Peter Thiel and Steven Pearlstein of the Washington Post. Granted, some of it was a little instantly dated, so be sure to get past the initial chatter about what the market will do next.

The heads of the nine big banks in the U.S. got briefed yesterday on Henry Paulson's equity injection plan -- they will all get new capital and we taxpayers as shareholders -- and then they ran for their limos, much to Washington Post columnist Steve Pearlstein's dismay. Here is what he thinks they need to do, sooner rather than later:

If Wall Street were truly serious about convincing Main Street that we're all in this together, its top executives would have stepped before the cameras yesterday and promised not to cut lines of credits to long-standing business customers who have never missed a payment.

They would have committed themselves not to foreclose on any homeowner who is willing and able to refinance into a new, government-guaranteed, fixed-rate mortgage set at 85 percent of the current value of the property.

They would have offered to suspend dividend payments until capital levels had been restored to pre-crisis levels.

They would have given us their solemn promise not to advise clients to hold on to their own investments while quietly dumping whatever they can from their own portfolios and shorting every security in sight.

With the Treasury now desperate for help in managing its new rescue efforts, they would have volunteered, at no cost to taxpayers, the services of some of those investment bankers and financial wizards who now don't have much else to do.

And the maharajas of finance could have set a wonderful example if they had all gotten together and agreed to work for a dollar a year until the crisis has passed.

Nice stuff, Steve. More here.

Tonight Jon Stewart noticed the recent first appearance ever on CNBC of the decabox -- ten talking heads in teensy on-screen boxes. That is, of course, up from the widely-noted octabox of a few weeks back.

The entire episode of The Daily Show tonight was worth watching.

(This is completely random, so feel free to move on.) It has largely gone unremarked, but single-letter tickers have really gone out of vogue at the NYSE. While such tickers used to be the ultimate status symbol for upwardly-mobile blue-chip companies, now six such letters are unused -- I, J, P, U, W, and Z -- and the the value of the rest of the names have declined in relative importance.

Consider the following chart showing single-letter tickers as percentage of NYSE market capitalization over time:

More here.

Today's L.A. Times has possibly the most awesome accidental (I think) juxtaposition of a newspaper front page headline and cover picture in recent memory. Click on it for a larger version.

Up in smoke, as it were?

I like to approach the financial world with a thesis, an idea, at least in broad terms, about how things will play out, now and in the longer terms. I've tried to be clear about that in posts here, as well as elsewhere.

Generally speaking, my current 25,000-foot view is this:

• We are going through a credit crisis sparked by the subprime meltdown. It is broader than that, however, really the tail end of an orgy of leverage and credit creation dating back at least 15 years
• The unwinding of all this credit bubble will take longer than most people expect, and the damage will continue to be broader than most expect. Beyond banks and financial institutions, it will include many municipalities, some large-cap tech names reliant on major debt-financed network buildouts, a host of debt-financed non-financial companies, and some sovereign nations. Total cost: Bridgewater's $2.7-trillion looks close enough to me .
• S&P forward-year earnings forecasts will come down faster than at any time in recent history. We will see 20% average estimate reductions across the board, leading to a further revaluation of the markets. After all, at S&P 1010 we are trading at 19x trailing earnings, and 18x forward, neither of which are inexpensive historically speaking. Admittedly, the above is not the non-financial S&P P/E -- ex- financial and consumer stocks we are more like 14x -- but it is a distinction that will get blurred as we go into this recession.
• We are already in a recession that will last well into the the fourth quarter of next year.
• Unemployment may touch 9% in the U.S. at trough.
• Obama will win the U.S. presidency.
• Housing will fall 10-15% further in U.S., and we are only beginning major declines in Canada, U.K., Australia, and elsewhere.
• U.S. consumers will become much more aggressive savers, both through debt reduction and direct saving. Similarly, future fiscal stimulus will largely be saved in service of this overdue need to fix domestic balance sheets.
• U.S. long yields have to rise, making curve steepener trades feel appropriate.
• Commodities will stay under pressure for the next two years,and then reverse savagely as developed countries emerge from recession at very similar times. We have newly resynchronized the global economies, which will have immense consequences.
• Coming out the other side, we will see a barbell economy, with growth and investor interest at the mega-cap consolidator end, and at the entrepreneurial smaller end. The latter will be driven by major developments in clean technology, in particular, which was just given a two-year window to gestate before the major economies worldwide turn higher and begin driving energy prices straight up.

There are just a few of the components of my economic worldview. While I'm skeptical we can hold current levels, I'm also a pragmatist not an ideologue. In other words, I'm not wedded to this view, and so I'm happily proven wrong if layoffs are less than expected, economic growth rebounds sooner, major growth prospects arise, etc. I will change tacks immediately.

So why do this? Because it is important to be falsifiable, to know what things would convince me I'm wrong, whether too optimistic or too pessimistic. As J.B.S. Haldane reputedly said when asked what would convince him his take on evolution was incorrect, "Fossil rabbits in the precambrian". These are just some of the rabbits I'm watching for, one way or the other.

Feel free to add others.

The current issue of Foreign Policy has a Luigi Zingales proposal for extending the current bailout to mortgage holders. The argument, of course, is that further waves of defaults just keep us standing still. The contrary argument is that no-one forced anyone to buy these over-priced homes, so why help them. Feel free to argue either side, or both.

Congress should pass a law that makes a recontracting option available to all homeowners living in a ZIP code where house prices dropped by more than 20 percent since the time they bought their property. Why? Because there is no reason to give a break to inhabitants of Charlotte, North Carolina, where house prices have risen 4 percent in the last two years.

How do we implement this? We have reliable measures of house price changes at the ZIP code level, thanks to two brilliant economists, Chip Case and Robert Shiller. By using the Case-Shiller real estate index, the recontracting option will reduce the face value of a mortgage (and the corresponding interest payments) by the same percentage by which house prices have declined since the homeowner bought (or refinanced) his property—exactly like in my hypothetical example above.

In exchange, however, the mortgage holder gets some of the equity value of the house at the time it is sold. Here’s how it works: At the time of sale, the owner pays 50 percent of the difference between the selling price and the new value of the mortgage back to the mortgage holder. Stanford University successfully implemented a similar arrangement for its faculty, financing part of the house purchase in exchange for a fraction of the appreciation value at the time of sale.

The reason for this sharing of the benefits is twofold. First, it makes the renegotiation less appealing to homeowners, making it unattractive to those who don’t need it. For example, homeowners with a very large equity in their house (who do not need any restructuring because they are not at risk of default) will find it very costly to use this option because they will have to give up half the value of their equity. Second, it reduces the cost of renegotiation for the lending institutions, which minimizes the problems in the financial system.

The great benefit of this program is that it provides relief to distressed homeowners at no cost to the federal government and at the minimum possible cost for the mortgage holders. It will stop defaults on mortgages, eliminating the flood of houses on the market and thus reducing the downside pressure on real estate prices. By stabilizing the real estate market, this plan can help prevent further deterioration of financial institutions’ balance sheets.

More here.

I know Nassim Taleb brings out strong feelings in people, but you have to admit the following quote from my friend Nassim is good:

We refused to touch credit default swaps. It would be like buying insurance on the Titanic from someone on the Titanic.

     -- Bloomberg

Congrats to him, by the way, for great performance this year at the funds he advises.