Even before Barack Obama visited the White House Monday to get a tour of his soon-to-be new digs from current occupant George Bush, our market watchers were looking ahead to what the president-elect faces when he moves in for real in January. One thing they agreed upon: More than war, terrorism or redecorating the Lincoln bedroom, the economy will be Obama's top priority.

Reacting to company surveys charting the plunging fortunes of the trucking, airline and technology sectors, ISI Group co-founder Ed Hyman wrote Wednesday that data "are suggesting the current U.S. recession is deeper than the last one. And the recession is clearly global. Obama is under pressure to act quickly on the economy."

In the wake of the Democrat's win, Wall Street observers agreed that an era of increased government intervention in the economy is likely, but they differ on its extent and ultimate effects.

"The election of Barack Obama is clearly an historic moment in American history and he will come into office on a wave of energy and enthusiasm," wrote Michael Townsend, vice president for legislative and regulatory affairs at Charles Schwab, in a Wednesday commentary. "But the sobering reality of the country's economic state will make the task of governing very difficult for the new administration."

Passage of a second-stage stimulus package, a follow-up to the $700 billion bailout of the financial-services industry, dominated policy prognostications, but immediate political wrangling could have more far-reaching economic consequences than any possible moves by the incoming administration. The lame-duck Congressional session that starts Nov. 17 could significantly reshape the current bailout and expand a $61 billion infrastructure stimulus bill passed by Congress before the election, ISI's Tom Gallagher wrote Thursday.

"House Democrats are interested in various changes in a program that seems to change every other day," he wrote. "Possible changes deal with eligibility (autos) and incentives (carrots or sticks, executive compensation). The main discussions seem to be among House Democrats, the White House and the Treasury Department. Senate Republicans don't appear to be as involved, so changes are clearly possible and likely."

An Obama win, wrote Ed Yardeni, president of Yardeni Research, means "we can expect New Deal II," a stimulus package that pushes government spending on infrastructure.

"In his State of the Union, Obama will say that he has learned the financial and economic situation is much worse than we were led to believe by the Republicans and will recommend a sweeping program of fiscal stimulus," Yardeni wrote Nov. 3. "It will also be designed to significantly redistribute income and wealth. Liberals will love it. Conservatives will hate it."

Anticipation about increased intervention may inspire dread but shouldn't inspire disproportionate fears, wrote Merrill Lynch chief investment strategist Richard Bernstein.

"Fiscal stimulus remains critical to the economy's and the financial markets' paths," he wrote Wednesday. "It is pretty clear that monetary policy alone has proved necessary, but not sufficient to solve the global economic crisis. Anything that might speed up the fiscal process should probably be viewed positively."

Nor, he added, should stepped up regulation under an Obama administration.

"Regulation across a broad scope of industries is likely to increase, but investors should try to keep an open mind. The financial sector might be a prime target, but investors typically benefit from additional transparency," Bernstein wrote. "For example, although corporations generally dislike much of the post-Enron legislation, corporate profits were extremely strong subsequent to the enactment of these laws and the stock market performed well. Overall, economic fundamentals are much more important than are politics. How the politics reacts to those fundamentals should always be watched closely."