It's a fact that we are very close to a systemic financial meltdown if things don't change for the better, and do so very rapidly.
I consider today's "cosmetic" 0.50 percent rate cuts by the Fed, the European Central Bank, the Bank of England, and other central banks too little, too late. The Fed's 50-basis point cut is too small given the huge destruction that the recent and un-abating financial shockwaves have caused to confidence in the financial system, to the real economy, and to wealth in general.
Before the Fed ends cutting, in the near future, the rate will be closer to zero than to 1 percent. The half of a percent cut by the European Central Bank is also much too small. They will need to cut at least 150 basis points before there is hope of restarting their economies and unfreezing their financial markets. (They have room to do that because the ECB now stands at 3.75 percent after the today's rate cut.)
All that said, I think that these rate cuts will only have limited effects as they don't resolve the fundamental problem in markets, that is, the big rate spreads relative to "safe rates" because of the enormous, unidentifiable counterparty risks of insolvent entities.
Unfortunately, it will take time (and time is not our friend at this moment!) before markets will be able to sort out the solvent banks from the insolvent banks and entities. Besides this, while all these uncertainties will still dominate the markets, it will be absolutely necessary to make huge liquidity injections in the non-banking and corporate sectors.
In that context, the historic decision the Fed took yesterday to support the commercial paper market is surely a step in the right direction.
As things stand today, th | 
