Professional system trader Art Collins shares his daily biases in the index, bonds and currency futures markets for October 8.

Currently at 2% fed funds, it seems we are likely to see those 1% rates again that got us into this mess in the first place.

The long-awaited sell-off seems to be here.  Suppressed, denied, and delayed, Mr. Market is finally having his say.

For the Federal Reserve and the US economy, the new commercial paper funding facility is a step in the right direction because it lends directly to business sector.  However what the Fed ceases to realize is that the lack of liquidity comes from the lack of confidence and so far, their approaches have been too conservative to warrant a recovery in confidence.

But stocks still fell more than 500 points.

Fed Chairman Ben Bernanke opened the door to rate cuts during a speech on Tuesday, while a record decline in consumer credit suggests spending may fall signficantly through the end of the year.

U.S. pending home sales is anticipated to fall another 1.1% after declining 3.2% in July, which suggests that the downturn in the housing sector will continue to limit economic activity throughout the second half of the year.

Although the lack of credit is often fingered as the problem, the prevailing issue right now is fear.

Professional system trader Art Collins shares his daily biases in the index, bonds and currency futures markets for October 7.

Without the ability to print your own money, you have to live within your means.