Perhaps the best analogy for the current financial crisis is Mary Shelley’s Frankenstein. Like, Victor Frankenstein, despite our initially benevolent motives, we have lost control of our creation, and have unleashed a monster.

Our monstrous creation in this case is the “imaginary” financial economy with all its tradeable paper. Originally designed to simply drive the real economy, the financial economy, thru the alchemy of securitization, has grown so large as to become the real, and true, economy.

The fact that the dollar volume in the stock market alone (which is really a small slice of the financial economy), is nearly triple the US GDP should drive home the realization that the real economy is the financial economy.

The non-financial company, or the “production” economy for lack of a better term, may employ more people, but it is no longer the real economy. More importantly, in a slight twist of fate, the “production” economy is now completely dependent on the financial economy in a myriad of ways, like 401-K’s, insurance plans, home ownership and other savings schemes. Even the mighty Google, can’t shake off the financial economy, as evidenced by their need to reprice all their employee’s options following the drop in GOOG’s stock price.

Once one comprehends the sheer enormous size and influence of the financial economy, it should seem obvious that spending nearly a trillion dollars in the “production” economy cannot possibly solve our financial crisis. The idea may have made sense decades ago, when the financial economy was much smaller in the size (and seemingly smaller than the production economy), but at this point, based on strict mathematics, there is simply no way the “production” economy can possibly bail out the now much larger financial economy. It’s the classic case of putting the cart before the horse.

What to do? The Frankenstein myth offers little consolation or advice. Once the monster is created, and reaches a certain level of self-awareness, there is no return. You either kill the monster, or create a new one.

The stimulus plan takes neither approach. Which is why, I’d sell into this stimulus rally and remain cautious.