
Look out for a whole host of economic reports coming out this week in the US.
Wednesday - Fed interest rate, Durable goods
Thursday - GDP report
these guys better not give any shocks...pleasant surprises most welcomed ...DOW futures now pointing to -200 over points and HSI is following it with more than 12.5% in plunge

Hongkong would have probably wish they have Deepavali too today
Interest rate may not have impact, judging from last few cuts. It may make market even more nervous. What is crucial is US GDP figures end of the week. If it is steady or slightly above expectation, market may have reached its bottom and spring up. Last few GDP announcements were accepted positively and sprang up the market.
Fed heads toward uncharted territory
Ben Bernanke & Co. are likely to cut interest rates again on Oct. 29. And some experts think rates could soon fall below 1% for the first time.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: October 24, 2008: 9:29 AM ET

NEW YORK (CNNMoney.com) -- The Federal Reserve is widely expected to cut interest rates again next week. But could the Fed soon go where it has never gone before and bring them below 1%?
The Fed lowered its federal funds rate, the benchmark overnight lending rate at which banks lend to one another, by a half-percentage point to 1.5% in an emergency announcement Oct. 8.
Many investors believe the central bank will cut rates by at least another half-percentage point following the end of a two-day meeting on Oct. 29.
In fact, the fed funds futures on the Chicago Board of Trade are now pricing in a 26% chance that the Fed will cut rates by three-quarters of a percentage point to 0.75% by that meeting.
Fed Chairman Ben Bernanke has said in recent weeks that economic weakness is likely to continue into next year, despite rate cuts and other recent moves taken by the Fed and Treasury Department to try and fix the credit crisis.
On Monday, Bernanke pushed Congress to consider a new stimulus plan to spur the economy.
"Everyone at the Fed has pretty much told you they're going to cut," said Rich Yamarone, director of economic research at Argus Research. "They're in a kitchen sink mode right now. Rate cuts, fiscal stimulus, bailouts - they're throwing everything they can at this right now."
Still, would the Fed really consider lowering interest rates below 1%? The last time rates were at 1% was between June 2003 and June 2004.
Rate cuts have been a key tool the central bank has used in the past to boost a weak economy. A variety of lending rates, including credit cards and home equity lines, as well as the prime rate used to set many business loan rates, are pegged to the fed funds rate.
So lower rates usually lead to cheaper credit, thus spurring businesses and consumers to spend money more freely.
But in the current credit crisis, with banks afraid to make loans due to worries about their firms' own need for cash in the near term, already relatively low short-term rates have done little to get credit flowing. (The Fed cut rates seven times between September 2007 and April before holding them at 2% for several months.)
Some economists argue that another rate cut may be the least important step the Fed can take in its effort to solve the crisis.
"It's window dressing, only a psychological weapon," said Sung Won Sohn, economics professor at Cal State University Channel Islands. "Right now, the problem isn't the cost of the Fed's money, it's that the existing money supply is not circulating. The pipelines are clogged."
Even Fed Vice Chairman Donald Kohn seemed to acknowledge that rate cuts aren't as important as they once were. In an Oct. 15 speech, Kohn said the coordinated global cut the previous week had already been "overwhelmed ...by the further erosion in confidence."
Still, many economists say that fear and uncertainty in the markets is so great right now that the Fed can't risk leaving rates unchanged. And they say anything that can be done to spur lending is a positive.
"It's not irrelevant, even if it's not as important as usual," said David Wyss, chief economist with Standard & Poor's.
Wyss said that if the U.S. credit and financial markets remain in crisis, a cut below 1% could come later this year or early next year.
To be sure, some have pointed to rates being at 1% for as long as they were as a factor in the housing bubble earlier this decade. It was the plunge from those inflated home values that sparked the credit crisis now dogging markets.
Low rates can also feed inflation. But that might be a sacrifice the Fed has to make.
"Inflating our way out of this mess is the Fed's only option at this point," said Peter Boockvar, market analyst of Miller Tabak, in a note Friday morning.
With the global economy slowing down, there are few economists talking about the threat of inflation. And the continued decline in home prices has negated most fears of low rates leading to another housing bubble.
So even a cut to nearly 0%, a rate where the Bank of Japan left rates for much of the 1990's, is not out of the question, given the unprecedented nature of credit problems.
"There's a hesitation to do it because it looks like desperation. But they're getting desperate," said Wyss.

Fed likely to cut rates again to help sentiment
Posted: 26 October 2008 1327 hrs
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WASHINGTON : The Federal Reserve is widely expected to cut key interest rates further at its upcoming two-day meeting, hoping to offer a psychological boost to panic-stricken financial markets, analysts say.
The US central bank, which led a coordinated global rate cut earlier this month that pushed its target rate down a half-point to 1.50 percent, is seen as trimming the rate another 25 to 50 basis points.
The Federal Open Market Committee headed by chairman Ben Bernanke is expected to announce a decision around 1815 GMT Wednesday at the close of a two-day meeting.
Yet analysts say the move would be largely symbolic because the actual rate of overnight interbank loans is in fact well below the Fed target because of the extraordinary efforts to pump liquidity into a strained banking system.
"The cut is already in the market," said John Ryding, economist at RDQ Economics.
Ryding said a fresh rate cut is virtually certain "and the question is whether it's 25 or 50 basis points."
Still, Ryding said the Fed target rate is largely "irrelevant" during the current market turmoil , with the actual overnight rate since October 16 between 0.60 and 0.93 percent for these types of interbank loans.
On Friday, the futures market was implying an 86 percent chance of a half-point cut in the funds rate to a historic low of 1.0 percent and a 14 percent chance of a cut of three-quarters of a point that would leave the rate at 0.75 percent.
"The market is convinced the Fed will do something," said Cary Leahey, senior economist at Decision Economics.
"We lean toward 25 basis points but we wouldn't be surprised to see 50. I think there would be resistance to lowering the rate below 1.0 percent."
Cutting below 1.0 percent could be seen as a sign of panic, according to some analysts, and also would remind markets of the low rates in 2003 that fueled the massive housing market bubble. Also, a low funds rate could pressure some investment firms' money market funds, which might be unable to pay interest to investors after management expenses.
Joseph LaVorgna, economist at Deutsche Bank, said he expected a half-point cut that "should embolden some investors to take risk" that would help ailing markets.
"Hopefully, the combination of excess liquidity and government guarantees will encourage investors to extend further out on the money market curve," he said.
Avery Shenfeld, senior economist at CIBC World Markets, said turbulent financial markets will be looking for something from the Fed to calm the intense volatility.
"With so much bad news already built in, there's nothing to fear but fear itself," he said.
Shenfeld said the market will likely get more downbeat economic news, and that under the circumstances, "We see the Fed as having no reason to go light on its rate cut."
"So while we favor a 50 basis point move as more likely than a 25 point trimming, markets may worry that the central bank is running out of ammo," Shenfeld added.
Leahey said the Fed will remind markets that it stands ready to take further actions if needed to stabilize conditions.
With rate cuts largely ineffective, the central banks could buy longer-term Treasury bonds in an effort to "twist the yield curve" and bring down rates affecting mortgages, Leahey said.
Fed members "feel that righting the economic and monetary ship is job number one," Leahey noted.
"They'll make sure they will remind investors they will not stand down till the job is done."
- AFP/vm