The TVA disaster is certain to reignite the debate over the environmental impact of coal-fired power plants around the country. But grave as the implications of the spill are for residents of eastern Tennessee, they’re by no means the most serious threat to America’s drinking water supplies.

The bottom line is we’ve had far more of a “Janus Effect” than a January Effect this year. Like the two-faced god of antiquity, this market has shown us a fiercely optimistic side, as well as a phenomenally pessimistic one. And that’s been fully reflected in share prices, which literally continue to rocket up one day and power-dive the next.

Much attention has been paid to the fact that 90-day Treasury bill yields are basically nil, and at times have slipped into negative territory on crushing demand for them. But even 30-year Treasuries are now yielding less than 3 percent. Meanwhile, the 10-year Treasury–the benchmark rate for income investments in normal times–has been scraping along at barely 2 percent. That’s less than half the high point of around 5.3 percent for the yield that was reached in mid-2007.

Politics and economics are always strange bedfellows. At this juncture, it’s virtually inconceivable that a strongly Democratic Congress will fail to accede to the wishes of an incoming Democratic administration, especially one that includes so many former members. And the promised tax cuts in this package make it difficult for the Republican minority to oppose as well.

In January 2002, I penned an article headlined “A Better Year.” Among other things, I forecast a strong recovery in energy utilities, which, like the rest of the market, had just come off a difficult 2001.

The good news: After six years of systematically slashing debt and reducing operating risks, utilities continue to prove themselves better positioned to weather this downturn than any previous one since the 1960s.

There’s still a risk that bad economic news will send stocks lower and Treasuries higher. But the past couple weeks’ trading was nonetheless a welcome change from the previous action. And it appears confidence in at least some companies–namely those whose businesses remain strong in the face of current adversity–is building once again.

Only three more trading days remain in 2008. This may be the understatement of the year, but odds are the market won’t make back its losses in that time. The benchmark S&P 500 is off more than 40 percent, and other markets around the world are down even more. Even the Dow Jones Utility Average is off more than 30 percent.

We haven’t yet done away with those fear-driven selloffs that so typified the action this fall. But there are definitely signs that stability is returning. And that’s the first step for the stock market recovery that–if history is any guide–will be in full swing long before the worst news on employment is out.