Despite the Fed's intervention, in both London and New York the cost of money for most borrowers actually went up.

It is just the energy sector (XLE) and other commodity sectors that are getting clobbered, while the main equity sectors behave very well after a 4% advance.

The supply theory of money is simple enough. The more dollars you have, the less each one will buy. So, the question for a dollar watcher is: how many dollars are there?

The action on Tuesday leaves the market favoring more upside in the immediate future.

Mike Paulenoff's work argues that the streetTRACKS Gold Shares (GLD) has peaked and that good news will be sold at the top of the January-March channel.

Goldman Sachs (GS) and Morgan Stanley (MS) are expected to write off about $1 billion. Deutschebank says the writedowns will be about $9 billion over the next 6 months. DB itself has more than $50 billion of leveraged loans to private equity on its books. Goldman has nearly $40.

The Federal Reserve cuts rates by 75 basis points, but inflation concerns are building.

Fading risk aversion pushed the US dollar back and forth as market participants looked for a 100 basis point rate cut by the Fed, but the central bank failed to meet market expectations as they reduced the interest rate by 75 basis points.

The market was back and forth throughout the day on Monday.

The Chinese were going to put up some money to prop up Bear Stearns. There might be many explanations for why the Citic deal didn't go forward, but here we suggest one that is the most far-reaching: the foreigners are growing wary of the United States.