All these are classic signs of the type of economic bubble that ends with serious consequences. As regular readers know, I suspect that the Fed and Treasury Department erred repeatedly during the middle to late 90s by underwriting and expanding the excesses with bailouts and further easy credit. I believe the authorities should have checked the situation when thing were still manageable. They had opportunities. As usual, this Fed was quick to respond to the bear market in stocks, tougher credit conditions, and the growing risks of a serious slowdown.
More cuts are likely to come.
Only time will tell whether it will be enough to forestall a recession and put markets on firmer footing. So far, little has been accomplished in the way of removing other potential credit and savings imbalances. I think that's an issue that should remain in the back of investors' minds. Last year my quarterly market summaries focused primarily on the depressed stocks in the property casualty and food industries. Both of those sectors rallied sharply from their most depressed levels and I have since reduced my exposure significantly.