Mixed. Nikkei up, others down, last I checked anyways.
I hope that the chicken littles here yesterday have learned something. People were on here yesterday predicting a four thousand point drop, etc, etc.
What we have here is a mess that’s working its way through the system. To use a crude but probably accurate analogy, lowering the rate by a percentage point is kind of like a laxative for the financial system. It’ll get everything flowing through again, and it’ll blast out what’s been accumulating.
What some of you are missing is that this hitting Bear Stearns and others is, in many ways, a good sign - so long as the Fed manages it correctly. That means that the trouble is working its way through the system. Debt is being repriced.
The Fed acted in exactly the correct way on this one. They stepped in to prevent a panic, but they also didn’t try and stop Bear Stearns from paying the price for its irresposible behaviour.
I agree with most of what you wrote — though I believe the situation is much more tricky than that. This is not smooth sailing by any means.