With the economy in a tailspin, the U.S. Federal Reserve policymakers will today (Tuesday) almost certainly cut the benchmark Federal Funds rate from its current 1.0% to 0.5%.

So the question no longer seems to be whether the Fed will ease, but whether the move will make any difference.

The Fed has been hamstrung by a credit-market double-whammy: borrowers who are in limbo due to fears of soaring unemployment, and banks that have turned off the lending spigot. Even so, a U.S. economy facing its worst financial crisis since the Great Depression demands the central bank take decisive action.

That has led to a strong undercurrent of opinion among analysts that the Fed will pursue other measures to spark a moribund U.S. economy.

“We look for the accompanying statement to highlight that the main nexus of policy in the coming months will be quantitative easing operations,

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nbsp;Here's what I am reading today ...brbrASIAbrbrA class=summheadline href=http://www.bloomberg.com/apps/news?pid=20601087sid=auPaBwMwwGtgamp;refer=worldwideSTRONGJapanese Business Confidence Plunges Most in 34 Years as Recession Deepens /STRONG/ASentiment among Japan’s largest manufacturers fell the most in 34 years, signaling companies are likely to cancel spending plans and cut more jobs, pushing the economy further into recession. brbrA class=summheadline href=http://www.bloomberg.com/apps/news?pid=20601089amp;sid=ablWg2RUlVmkamp;refer=chinaSTRONGChina Plans to Increase Money Supply in 2009 to Boost Domestic Consumption /STRONG/AChina aims to increase its money supply 17 percent in 2009 and encourage lending to boost domestic consumption and buoy growth in the world’s fourth-largest economy. brbrENERGYbrA class=summheadline href=http://www.bloomberg.com/apps/news?pid=20601072amp;sid=aXp2Rc3B4FSEamp;refer=energySTRONGCrude Oil Rises as OPEC's El-Badri Says Sizeable Cut Is Needed at Meeting /STRONG/ACrude oil rose, touching $50 a barrel in New York, after OPEC’s Secretary-General Abdalla El-Badri said the group needs to make a “sizable” output cut at this week’s meeting in Algeria. brbrA href=http://www.bloomberg.com/apps/news?pid=20601072amp;sid=auG5o.dtUTXMamp;refer=energySTRONGOPEC Collides With Goldman Over $75 Oil in First Demand Decline Since 1983 /STRONG/AThe Organization ...

The government is banking on the American consumer to rescue the economy. But debt-ridden households have had enough, says Andrew Gordon. He says the government’s massive bailout are benefiting very few in the short-term. But the long-term consequences will be felt by all.

This from Investor’s Daily Edge:

The government’s latest bailout moves have me scratching my head. It’s throwing $200 billion worth of guarantees at recent and current loans tied to consumer and small-business spending.

Hank and Ben want the consumer to bail out the economy. And they want to do it by putting consumers deeper into debt.

They don’t get it.

They don’t get that consumers are tapped out.

What do they think when they see numbers that show that American households are in deeper debt than ever before? Or when they see that consumer spending in October fell the most in

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Author: BusinessTalkAdded: Sat, 29 Nov 2008 22:52:46 -0800Duration: 540

http://blog.investtalk.com Steve Peasley is a financial advisor and host of InvestTalk, a weekday program that looks at new and relevant investment topics each weekday. He answers questions about financial and retirement planning, money management as well as general concerns about the stock market. http://blog.investtalk.com

First Congress authorized $700 billion — quite a bit more than the entire Department of Defense budget — for some sort of “troubled asset relief plan (TARP).” (Nobody ever really explained it to my satisfaction. Somehow we were going to throw money at a very big problem and fix it.) Then the money flowed like rainwater to Wall Street and a bunch of banks. Then the banks and Wall Street houses continued to pay their insiders’ big salaries and bonuses.

Yard Work, Troubled Assets, Bankruptcy and Energy

I often mention that I live in Pittsburgh. Well, the truth is that I live in a leafy suburb of Pittsburgh. I grew up in the Steel City. But when I got married I moved to the suburbs to be near my wife.

Life in the Leafy Suburbs

There is a problem with living in a leafy suburb. When autumn rolls around, the leaves turn brown

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Oil was given a lift yesterday. But at $81.19 a barrel, the black goo is still almost $70 from its July peak.

Greg Guenthner isn't sweating it.

Oil prices have been caught up in widespread panic selling of recent months. It remains a scarce and essential commodity. This means it is only heading in one direction over the long term.

Greg recommends following oil guru Richard Rainwater's cue and buying into oil stocks with both hands.

Leave it to the editorial board of the Wall Street Journal to put Dmitry Medvedev on par with Hugo Chavez and Mahmoud Ahmadinejad for his Evian speech. Like the overly sensitive victim of a schoolyard bully, the more Washington reacts to overt anti-Americanism, the more it pleases the provocateur. In a particularly intriguing passage, Mr. Medvedev in Evian noted NATO's plans to expand, and "quite naturally," he said, "we regard these actions as directed against us." Then, perhaps anticipating criticism, he said, "Sovietology, like paranoia, is a very dangerous disease, and it is a pity that part of the U.S. Administration still suffers from it." Some thought Mr. Medvedev would lower the volume on former President Putin's anti-U.S. outbursts. Instead, it appears he is joining such other anti-American stalwarts as Hugo Chavez and Mahmoud Ahmadinejad in concluding that international forums are mainly venues for ranting about the ...

The banking crisis is becoming like a particularly gory episode of ER; the patient has been wheeled in with limbs dangling and blood spurting after a horrific car crash (self inflicted, he's a drunk driver, and has wiped out an innocent family, but our medics don't moralise), and the dashing heroes, Dr. Paulsen and Dr. Bernanke, start barking out orders. They pump in blood transfusions, inject morphine to kill the pain and adrenaline to boost a flagging heart, but the patient is in full cardiac arrest. Stand back while Hank the Hunk gets the pads and gives our expiring patient a high voltage jolt. And another one. And yes, we get a faint heartbeat, that monitor bursts into life, our heroes have saved the day, or have they? Get real, you know this one won't have a happy ending. As hedge funds get nuked ...

Let the tit-for-tat military deployments begin, as Moscow complains about the presence of NATO ships in the Black Sea, they unveil plans for joint naval exercises with Venezuela in the Caribbean. As we've reported before on this blog, both Chavez and Putin share a particularly ridiculous paranoia that they are on the brink of invasion by the United States, and must vigorously prepare defenses and militarize their borders. Escalation, it seems, isn't just a means but also an end. From the LA Times: During his visit to Russia, Chavez said that the two nations had formed a strategic partnership and that he was buying a Russian missile defense system to thwart a potential U.S. air attack. In recent months, Chavez advisors have said Venezuela is considering buying as many as five diesel-powered Russian submarines. The deal would ...