After U.S. Federal Reserve policymakers meet today (Monday) and tomorrow (Tuesday), most experts expect a half a percentage point cut in the benchmark Federal Funds Rate – which is already 1.0%.

That doesn’t leave members of the central bank’s policymaking Federal Open Market Committee (FOMC) much room to maneuver. Still, the policymakers may have more ammunition in their arsenal and the statement that accompanies the rate decision at the end of the two-day session could shed some insight on the “creative” actions the Fed could consider in addition to rate cuts (For instance, the central bank could extend the new investment firm discount window, offer additional loan guarantees, or utilize any number of other tools).

And the Fed may well have to use those other tools. As Japan’s “Lost Decade” demonstrated, “zero” interest rates won’t necessarily jump-start an economy – especially when interest

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After U.S. Federal Reserve policymakers meet today (Monday) and tomorrow (Tuesday), most experts expect a half a percentage point cut in the benchmark Federal Funds Rate – which is already 1.0%. That doesn’t leave members of the central bank’s policymaking Federal Open Market Committee (FOMC) much room to maneuver. Still, the policymakers may have more ammunition in their arsenal and the statement that accompanies the rate decision at the end of the two-day session could shed some insight on the “creative” actions the Fed could consider in addition to rate cuts (For instance, the central bank could extend the new investment firm discount window, offer additional loan guarantees, or utilize any number of other tools). And the Fed may well have to use those other tools. As Japan’s “Lost Decade” demonstrated, “zero” interest rates won’t necessarily jump-start an ...

Don't look now, but the financial sector is slipping quickly towards new multi-year lows.

The Select Sector SPDR - Financials (NYSEArca: XLF) closed today at $13.80/share, just 62 cents above its all-time low of $13.18/share, set on October 27. It's now down 16% in the past four trading sessions, and is trading right about where it stood on October 7, when the U.S. House refused to pass the initial bailout package and many Americans (including me) thought another Great Depression was on its way.

Meanwhile, the news from the sector is unremittingly bleak.  The Feds have had to nearly double the size of the AIG bailout, from $84 billion to $153 billion. If you're doing the math, that is $500 for every man, woman and child in the U.S. I say we just give them $1 trillion and be done with it.

Of course, it's not just AIG. Fannie Mae reported a loss

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-- Today, it's the turn of the Senate to vote on the bailout bill that Congress ditched spectacularly on Monday. Call it bold move, call it political stunt, Senate leaders hope the move will help the bill pick up more votes in the House.

-- Mr. Market is still on edge, however. US stock futures have slipped after yesterday's surge. "S&P 500 futures fell 11.9 points to 1,156.80 and Nasdaq 100 futures dropped 19 points to 1,585.50. Dow industrial futures fell 96 points," reports MarketWatch.

-- The FDIC isn't taking any chances. It is asking Congress to approve an increase in deposit insurance limits.

U.S. stocks soared yesterday (Tuesday) - with the Dow Jones Industrial Average gaining 485 points in posting its third-biggest point gain ever - as investors surged back into stocks just one day after the surprise rejection of a $700 billion bailout plan touched off a record sell-off.

The U.S. House has passed a $25 billion loan to automakers. It is not a bailout, but a loan that will be financed at the cost of funds of the Treasury. The funds must be used for:

1-A US manufacturing facility where the loan financed is at least 30% of the cost of a plant that produces vehicles that get at least 125% of the average MPG of American cars.

2-To support a facility that is at least 20 years old in the U.S. Most European and Asian facilities in the U.S. are less than 20 years old, so this would essentially go to the Big 3.

Automakers are trying to include auto asset-backed securities (ABS) in the bailout package along with mortgage-backed ABS. Auto ABS spreads have widened by 40% since this crisis, which has made getting an auto loan difficult for anyone with a 720 credit score and below.

Sales have fallen

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