"Very aggressive policy."

Over dinner on Tuesday night, that's what New York University economics professor Nouriel Roubini told me was required for a "U" shaped economic recovery "rather than a Japanese-like 'L' into oblivion. He puts the odds of a "U" at two-thirds and an "L" at only one-third, if these further policy actions take place. Such a voluble bear coming down in favor of a "U" should be welcome news to the crushed investment community.

Federal Reserve Chairman Ben Bernanke must have been eavesdropping on our conversation. The very next day, Bernanke did promulgate some "very aggressive action" indeed--another trillion dollars or so to be poured into the mortgage-backed and Treasury securities in a bold attempt to free the credit markets. Wall Street loved Bernanke's move, extending the stock market gains here and abroad and driving interest rates on Treasury securities and mortgage-backed bonds lower. Hope alights again for housing as mortgage interest rates have been driven down to 4.79%, which should help to thin the gargantuan inventory of unsold homes.

Biogen and DirecTv are two "Focus List" buys from Dow Theory Forecasts. Click here for more, along with regular portfolio adjustments from Dow Theory Forecasts.

Now it is time for Aggressive Action II from Treasury Secretary Timothy Geithner. It must be a decisive and clear creation of a "good bank/bad bank" arrangement to get rid of the albatross around the necks of Citigroup (nyse: C - news - people ), Wells Fargo (nyse: WFC - news - people ), JPMorgan Chase (nyse: JPM - news - people ) and Bank of America (nyse: BAC - news - people ), for starters.

Roubini believes it is crucial to break up the big banks into three or four parts each, so that they can be better managed. "If you're too big to fail," he says, "then you're too big, period." If Geithner comes through with a clear, aggressive, bold and easy-to-understand program for the banks, his star will rise, and so will the bank share-led rally in this bear market. All eyes are on Uncle Sam.

There is a wonderful precedent of how a "good bank/bad bank" solution can rebuild debilitated capital structures in financial institutions. In 1988, John Vogelstein, a brilliant partner at E.M. Warburg Pincus & Co., together with Wachtell Lipton law partner Martin Lipton, was able to restore stability to Mellon Bank and make a profit of $1 billion by separating the terrible assets from the promising ones. It was the first non-assisted recapitalization of a major commercial bank, and out of it grew one of the nation's top 25 bank holding companies. Mellon's bad assets were put into a bad bank at a discount of 25% to 30%, and over an extended period of time, the stream of income net of interest from these assets brought exactly the value that Vogelstein had predicted. Warburg Pincus made $1 billion on its 20% interest from a bank that was losing $300 million on a balance sheet of only $750 million.

Mr. Geithner, please note that Mr. Vogelstein is still affiliated with Warburg Pincus and can be reached at (212) 878-0601.

But now that the Bush administration has agreed to lend GM and Chrysler $17.4 billion to stave off bankruptcy, Mulally is running as fast as he can from those other guys. "We're in a different place," says Mulally, whose company had $19 billion in cash on Sept. 30 and isn't seeking an immediate cash infusion.

Don't be so sure. Ford, which lost $8.7 billion through September, may yet need taxpayer money. It is burning more than $2 billion a month and has asked for a $9 billion line of credit as a safety net in case industry conditions worsen. And it's looking more and more like Ford will need it.

Ford's financial projections are based on a rosier industry sales forecast--12.5 million vehicles (including heavy trucks) in 2009 and 14.5 million in 2010--than most industry experts predict. JD Power & Associates is forecasting 11.4 million light-vehicle sales in 2009 and 13.6 million for 2010.

IHS Global Insight is even more pessimistic. It now forecasts sales of 10 million to 10.5 million light vehicles for 2009, and 12.5 million units for 2010. GM's best case scenario is 12 million units in 2009 and 14 million in 2010, though its business plan is based on more conservative estimates. Last year, the industry sold 16.1 million light vehicles.

If Ford's assumptions prove too optimistic--as is likely--it too will be approaching Uncle Sam for help. "All automakers, including Ford, are going to need government money," says IHS Global Insight analyst Rebecca Lindland.

Self-interest required Mulally to stand up for his weaker competitors. A collapse of one or both would hurt suppliers and could potentially bring down Ford as well. But in the meantime, Ford is shrewdly portraying itself as the healthiest U.S. carmaker and quietly stealing market share from its crosstown rivals. Ford gained 1.4 points of market share in November, while GM lost 1.6 points and Chrysler lost 2.3 points.\

There Are Too Many Car Companies Anyway

Even without Big Three bankruptcies, the industry badly needs consolidation.

The Nintendo Wii is good. Accessories make it great.

In Pictures: Why You Need Wii Accessories

Mom bought you an Atari when you were a kid. Now you've decided to return the favor and buy her a Wii.

Clever. Not only does this thing boast games your Mom will love--hey, you can't even get "Gears Of War" on this thing--it gives Mom the tools she needs to make Grandma time a hit, every time.

Plus stashing the family console at Mom's house means you can splurge on a few accessories for the gang, without turning the kids into spoiled videogame junkies. And the Wii's group-friendly games means Mom can always join in the fun.

In Pictures: What Your Wii Needs

Other consoles have long sported eccentric accessories, of course. Steel Battalion, for the Xbox included a yard-wide game controller complete with foot pedals, a gear-shift and an eject button. PC games sport options that are even more outlandish. Aviation enthusiasts, for example, can buy everything from a simple stick and rudder for their virtual planes to elaborate plastic cockpits. It doesn't get much geekier.

The Wii's best accessories, however, are different because they build on the original Wiimote controller's motion-sensitivity to make videogames about much more than mashing buttons and wiggling joysticks. In fact, combining family-friendly games with motion sensitive controls has turned a once geeky pastime inside out.

Take the Wii Fit. The kit includes a balance board that allows adults to master basic yoga, track their weight and improve their balance. And it makes other games, like the "Wii Ski" a blast not just to play, but at parties where you can watch your friends try to shimmy their way down virtual ski slows.

Back in June 2007, Elevation Partners placed a huge wager on smartphone maker Palm (PALM). In its biggest investment ever, the Silicon Valley private equity firm pumped $325 million into the company. The bet now looks like a bomb. On Dec. 1, Palm preannounced a nightmarish quarter, with revenues likely to come in nearly 50% below Wall Street's expectations. On Dec. 10, Palm's stock closed at 1.69, nearly 80% below the price Elevation paid for its shares last year.

Palm isn't the only problem for Elevation, a high-profile Menlo Park (Calif.) firm whose founding partners include financier Roger McNamee, former Apple finance chief Fred Anderson, and U2 frontman Bono. Elevation has done just six deals since it was created four years ago. It owns a stake in the parent company of Realtor.com, which is struggling through the housing meltdown, and it also owns around 40% of Forbes, which like many magazines faces a difficult media advertising environment. "They're in a tough spot," says an investment banker familiar with the firm. "It's hard to see where they go from here."

Few telecom experts think the Palm investment is leading anywhere good. The Sunnyvale (Calif.) company pioneered the smartphone market in the U.S. with its Treo line of products but has fallen far behind rivals such as Research In Motion (RIMM), Nokia (NOK), and Apple (AAPL). Palm's share of the U.S. market has dropped from 23% to 8% in the past two years, according to research firm IDC. "There's no room for treading water and product delays in this market," says IDC analyst Ryan Reith.

Elevation is in better shape than some others in private equity. It never made aggressive use of debt. It was able to sell one investment, a video game company, to giant Electronic Arts (ERTS) for a solid return. And it still has roughly half of the $1.9 billion that it raised for future deals. But unless Palm recovers, Elevation will struggle to deliver decent returns to its limited partners. That in turn could hurt its ability to raise money for investment funds in the future.

Elevation's partners insist Palm is poised for a comeback, and they point to an engineering effort being overseen by former Apple hardware czar Jon Rubinstein. He joined Palm last year as executive chairman, as part of Elevation's investment in the company. With the help of Dan Walker, Apple's former chief recruiter, Palm has brought in dozens of veteran techies interested in working on breakthrough gizmos. "I'm very confident about our plan," says Rubinstein.

NEW PRODUCT GAMBLE

The moment of truth will come at the Consumer Electronics Show in January. Sources say Palm will finally unveil an oft-delayed new operating system, as well as the first in a new family of smartphones. The company won't discuss details, but McNamee says the products will be different from anything on the market. While RIM's BlackBerrys excel at e-mail and iPhones are tops for entertainment, he says Palm will create devices that help consumers easily meld work and play.

Palm doesn't have to vanquish RIM or Apple to succeed. With smartphones expected to balloon from 10% to 50% of the overall 1 billion-unit cell-phone market, Palm could triple its revenues by winning just a single point of the aggregate market. Indeed, McNamee and Rubinstein say they're modeling their plan on the resurrection of Apple, in which marquee products led to financial success. "We hold Apple up as the example of how to do this," says McNamee.

This may be Palm's last chance to get it right. The company says it will burn through about $33 million in cash this quarter. At that rate, its remaining $215 million will last a bit more than six quarters.

Everything you need to know to make sure you get a signal after Feb. 17.

In Pictures: 10 Tips For Switching To Digital TV

At the stroke of midnight on Feb. 17, 2009, the analog transmissions that have beamed free television over the air in the United States for over half a century will disappear for good. They will be replaced by digital signals, many of which are already broadcasting, in what will be the most significant change to television since the introduction of color.

The "digital switchover" brings with it higher image quality, better sound and a level of versatility and flexibility previously unattainable through free television. It also brings with it a number of significant headaches, as confusion over exactly who will be affected is inspiring panic in viewers fearful of being left behind in a haze of snow and static as the rest of the country moves into the future. Many of those who will be affected know that the deadline is fast approaching, but are unsure of how to prepare for it. Thankfully, a solution is simple, easily attainable and won't cost you a dime.

There are two major reasons for the switch from analog TV broadcasts to digital TV. First, digital signals offer superior image quality and allow for the transmission of high-definition signals over the air. This means that a properly equipped HDTV can receive local high-definition broadcasts that will look about as good as what you'd get from cable or satellite television.

In Pictures: 10 Tips For Switching To Digital TV

Second, switching from analog to digital frees up real estate on the broadcast spectrum for other uses, as digital signals are more efficient and take up less bandwidth. Telecommunications companies like Verizon (nyse: VZ - news - people ) and AT&T (nyse: T - news - people ) have spent nearly $20 billion to secure the rights to the frequencies that were previously occupied by channels 52 through 69, in the hopes of using that airspace to improve their wireless communication networks.

What the digital switchover is actually doing is changing the language that TV broadcasters use to communicate with your television. Since 1941, televisions in the U.S. have utilized a set of broadcast standards laid out by the National Television System Committee. Big broadcast towers sent out information over the air using these NTSC standards and were picked up by the television antenna in your living room. Inside your TV, an NTSC tuner interpreted the information and properly displayed it on screen.

The digital switchover is introducing a new language, a new set of broadcast standards, this one designed by the Advanced Television Systems Committee. On Feb. 17, those broadcast towers are going to stop speaking NTSC permanently and start speaking ATSC. But unfortunately, your old television set doesn't know how to translate ATSC into moving pictures and sound. Just about all televisions manufactured and sold after Mar. 1, 2007 feature ATSC tuners, but if you purchased a television any earlier than that, chances are your TV won't be able to pick up over-the-air broadcasts once the switchover occurs.

The solution: A digital converter box, essentially an external ATSC tuner that sits on top of your existing television and is linked between your antenna and your TV. The ATSC signals are grabbed by the same antenna you've always used, then passed to the digital converter box that translates the ATSC signals into something your NTSC television can understand. They are easy to hook up and available at a wide variety of stores, including big box stores like Best Buy (nyse: BBY - news - people ), Wal-Mart (nyse: WMT - news - people ) and Target (nyse: TGT - news - people ), as well as online retailers.

Editor's note: Republican Leslie Sanchez was director of the Bush White House Initiative on Hispanic Education from 2001 to 2003 and is the author of "Los Republicanos: Why Hispanics and Republicans Need Each Other." She was not a paid consultant to any 2008 candidate. Sanchez is CEO of the Impacto Group, which specializes in market research about women and Hispanics for its corporate and nonprofit clients.

Leslie Sanchez says the Republicans must catch up to Democrats in their use of new campaign technology.

Ever since John McCain and Howard Dean in 2000 showed the Internet's potential for fundraising, the question was always whether the Web could be effective at "GOTV," or getting-out-the-vote.

Among young voters at least, Barack Obama has proven that it can -- and, in the process, he's uncovered a major flaw that cuts to the core of the Republicans' approach to party organization and discipline.

Obama poured many of his campaign's millions into his social networking operations on the Web, which his campaign rightly saw as critical to building grassroots support and enthusiasm.

A community organizer by training, occupation and nature, Obama saw his databases for the potential they represented -- an army of supportive voices, a legion of potential volunteers, and a division of precinct captains.

Such is the world not just of Chicago ward organizations, but of politics everywhere.

The McCain campaign, reflecting the broader skepticism I've seen in the GOP about the Web, doubted whether the Internet could get voters out of their Barcaloungers (or, in the case of younger voters, off their futons) and into the polling booth.

Michael Palmer, McCain's Internet director during the primaries, told ABCNews.com last June that if Obama's online efforts "don't have an endgame political benefit, then they don't help you at the end of the day."

On Tuesday, Obama showed the Republicans the Internet's endgame.

On Facebook alone, Obama signed up 2.4 million users as supporters, compared with just 624,000 for McCain. A Facebook virtual ticker challenged users to actually go out to the polls, and clocked more than 1 million by noon on Election Day and 5 million by the time all the polls closed.

According to the Center for Information and Research on Civic Learning and Engagement (CIRCLE) at Tufts University, the number of voters under 30 rose by 3.4 million compared with 2004.

About 66 percent of those voters supported Obama, compared with 32 percent for McCain. By contrast, the overall voting population gave Obama a much narrower margin of victory -- 53 percent to 46 percent.

In previous elections since 1976, according to CIRCLE, the percentage of young voters supporting the winning candidate varied by an average of only about 2 percentage points from the overall voting population.

At the least, young voters contributed to Obama's wins in North Carolina, Indiana, and Virginia.

When Mark Penn, then Hillary Clinton's chief strategist, chided Obama's supporters as "look(ing) like Facebook," he was right. While some of us over the age of 29 are just now mastering Twitter and Facebook, a UCLA survey of 272,000 college freshmen found that 86 percent spend "some time" each week on social networking sites like Facebook and MySpace.

Obama realized that the 70 million Americans on Facebook (the vast majority of them under the age of 30) have become accustomed to a Web experience that's interactive.

Web-based political social networking requires empowerment -- introducing well-trained, highly motivated local supporters to one another and then turning the campaign over to them.

McCain's official site included a social networking area, McCainSpace, but it was mostly an afterthought, competing for attention with messages from the candidate, campaign ads, issues summaries, photo galleries -- and of course the obligatory online donations and volunteer signups.

The Obama social networking site invited each new user to post a blog right away upon signing up. To the Obama Web team (which included one of the founders of Facebook), putting users in touch with one another was almost as important as putting the user in contact with the campaign.

Team Obama posted nearly 2,000 videos on YouTube, and the campaign contracted to build a text-messaging campaign that reached millions of voters geographically on their mobile phones. All told, it was a hefty viral marketing combination.

During the primaries, volunteers could sign in online, download a list of phone numbers and make calls from home to voters in the target states -- a virtual phone bank that other campaigns had to pay for.

Joe Trippi, the Democratic operative behind the Web-savvy Howard Dean campaign, was quoted in the New York Times noting Obama's progress: "We were like the Wright brothers," he said. Obama, on the other hand, "skipped Boeing, Mercury, Gemini -- they're Apollo 11, only four years later."

A college student and editor-in-chief of www.scoop08.com, Alexander Heffner, believes young voters were serious about voting this time around. "So many young people invested in him [Obama], unlike with Bill Clinton," Heffner told me.

The Obama campaign's use of the Internet will change campaign politics just as much as the fax machine and the autodialer did. If the GOP is going to compete in this growing tech world, they'll have to do more than just reverse-engineer the bells and whistles on Obama's Web sites.

They'll have to analyze Obama's entire approach to social networking -- a bottom-up, unruly approach that turns first-time voters into activists. That'll be easier said than done for a hierarchical organization that values order and discipline over all else (except, perhaps, seniority).

Nevertheless, if the GOP wants to compete on an even footing with the tech-savvy, social networking Obama-crats, they've got a real revolution ahead.