Dear Justice,

I am just back from a quick trip into the city, and I'd like to tell you that things are looking up here.

But it just ain't true.

Rather, there's a new buzzword floating about Wall Street this week... a new catch phrase that pretty much sums up just how sorry the situation is here in lower Manhattan.

"Oops. I guess we were wrong. Sorry about those billions."

Now when one of my lovely daughters confesses to error, it usually means that a vase is broken, or perhaps my dress shoes have been used as dump trucks in the sandbox (again).

Annoying, but we somehow manage to get past it. After all, there's a good chance that they will eventually learn not to make such errors in judgment.

But when a major Wall Street player starts trotting out the mea culpas, the damages are most probably several orders of magnitude worse. And it seems these days like they never ever learn a darn thing.

An example: Just the other day, we got a note from those "Smartest Guys on Wall Street," Goldman Sachs, that their May call to buy finance and retail consumer stocks was "clearly wrong."

It seems that they were feeling overly bullish at the time because their "Man in Washington," Treasury Secretary Hank Paulson, and his chum at the head of the Fed table, Ben Bernanke, were pouring trillion-dollar buckets of  "free money" onto Wall Street.

Some of this "free money" was in the form of government checks to citizens, who would hopefully go out and buy new widescreen TVs. Some was in the form of billion-dollar bank "loans" that were actually below cost. A good bit came as "bailout guaranties" so that that one group of ailing finance guys could buy out another group of feckless nigh-bankrupt finance guys.

What all this largesse had in common was that the money was "free." That is to say, it didn't exist until some wise guys in Washington ginned it up to patch our leaky financial ship.

Now, most of these fellows in Washington and Wall Street have walls chock-a-block with degrees from prestigious institutions of higher learning. Fine universities like Harvard, Yale and Princeton have done their level best to explain the economic facts of life to them.

Perhaps they were all absent the day the professor mentioned that you cannot create wealth simply by printing more money. If you do not first add gold to the till or -- if you are some kind of modernist -- increase your country's gross national product, then all you will succeed in doing is diminishing the value of all bank notes in circulation.

Yes, yes, I know; this is Econ 101, a basic lesson only a third-world dictator could possibly overlook, right? Robert Mugabe, Zimbabwe's 1,000% inflation and billion-dollar restaurant bills all come readily to mind.

And yet, those bright lads at Goldman and their stooge at Treasury somehow overlooked this elementary bit of arithmetic when they suggested that all these new dollars would surely refloat banking and retail stocks.

Instead, all those shiny new dollars (and what few ratty old dollars folks were desperately trying to hang on to) now buy a heck of a lot less of what we all need so badly -- less oil, less gasoline, less electricity, less food...

And folks are actually pretty ticked off about it all, as is apparent in the latest record low in consumer confidence.

Car sales are in the toilet. Even mighty Toyota is down and anticipating worse. Durable goods are collapsing. (No, no, don't trot out the headlines that May DG was flat. Take out a few one-off airplane sales, and they fell 0.9%.) Housing continues to set the worst kinds of records for both sales and pricing.

And now that finance, consumer stocks and the S&P 500 have fallen 19%, 8% and 6% respectively since the last time Goldman Sachs weighed in, they NOW suggest to all the people who have lost billions here that perhaps they should "underweight" these players.

"We were clearly wrong."

Considering Wall Street and Washington's track record of late, it's a phrase we should get used to.

Yours truly,

Adam

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