In this portion of the economic cycle, we typically see all sorts of causes and reasons for fault. This time, its no different...br /br /We've seen "the fall of the U.S." theories...br /h1 style="font-style: italic;"span style="font-size:78%;"a href="http://online.wsj.com/article/SB123051100709638419.html"As if Things Weren't Bad Enough, Russian Professor Predicts End of U.S./a/span/h1Its an interesting theory, but pretty light on the substance. This guy fails to take into consideration the actual climate in America.br /br /And of course "the death of free-market capitalism" calls...br /br /a href="http://www.realclearpolitics.com/articles/2008/12/laissezfaire_capitalism_should.html"span style="font-weight: bold; font-style: italic;"Laissez-Faire Capitalism Should Be as Dead as Soviet Communism/span/abr /br /Again, awfully light on substance. Its so easily to rip on free-market capitalism during recessions, but people often forget about the wealth created by capitalism which probably is the reason the writer had a job to begin with. Some like to have it both ways. Its easy to tear down ...

Currencies trade in a tight range…  Another new plan to help homeowners…  RBNZ and Riksbank slash interest rates! The Governorator speaks!… And Now… Today’s Pfennig! It’s going to be a Tub Thumpin’ Thursday in Europe for sure, given the Central Banks of England and the Eurozone are meeting and will probably cut interest rates to levels that haven’t been seen in a while! The automakers are in deep dookie folks, according to them, and are in need of funds / bailout money right now! The head of Ford believes his company can withstand the recession, but fears for GM and Chrysler… The UAW has made some concessions to help the automakers, but it could be a case of too little, too late…

Well… Another day of doldrums in the currencies, with the bias, what little there is, to buy dollars. The stock jockeys received some manna from heaven yesterday when

...

With inflation in prices running at more than 10%, and inflation in credit running at up to 100% and more, bond investors are getting the lowest yield in half a freaking century? Hahahaha! Morons!

From Bloomberg.com we get the headline “Treasuries’ Scarcity Triggers Repo Market Failures”, by Liz Capo McCormick, which is probably very scary, but I have no idea what the hell she is even talking about or why it is important, neither of which is made any clearer when the article explains, “In a repurchase agreement, or repo, a customer provides cash to a dealer in exchange for a bill, note or bond. The exchange is reversed the next day, with the customer receiving interest on the overnight loan. A Treasury security is termed on ’special’ when it is in such demand that owners can borrow cash against it at interest rates lower than the general collateral rate”, which

...

Accurately predicting a recession is about as easy as pinpointing the landfall of a hurricane several days out. That’s still not stopping CEOs, government leaders and economists on both sides of the fence from weighing in on the matter with increasing frequency.

The U.S. economy with a $13-trillion output of goods and services, as guaged by Gross Domestic Product, or GDP — is not only the world’s largest economy, but thus far has been a resilient economy.

Last Sunday this blog broached the possibility of some sort of intra-meeting move by the Fed. And then on Monday, Paul Kasriel at Northern Trust told me a cut in the discount rate would make life easier for the Fed as opposed to pumping the system via daily injections. Well, the discount cut happened, as we all know.

Say what you will about how the Fed could care less about ‘moral hazard’ and has said “Uncle” after just a month of market melodrama by deciding to follow the typical bailout script of Big Al Greenspan — the more active participation by the Fed to try to plug the leaks in the proverbial dam is something that the bears should be very respectful of in the near term.