Before the Bell

Larry Kudlow writes:

Take Charge, Central Bankers 

There’s a global stock market tsunami gathering force. It may hit U.S. shores very hard this morning.

Much of this is panic over a U.S. recession threat that has yet to clearly materialize. The world sell-off also vastly overestimates loan and credit problems among international financial institutions.

In any event, world central banks should immediately reduce rates and add liquidity first thing in the morning, no matter what the time-zone.

Fed head Ben Bernanke should have cut rates 50 basis points last week. He should do it first thing this morning. Then cut rates another 50 basis points on January 30.

Importantly, central banks must work together and cut rates together. They must coordinate to avoid major financial consequences. They must show investors, financiers, and business people that they are in charge.

In this deflationary environment, plunging commodities, stocks, and credit-risk-free government bond yields are all signaling central bankers to take charge. That means lower rates and more money creation.

Pronto.

Bernanke didn't listen to Kudlow - he cut rates even more - 3/4 of a  percentage point this morning. The DOW future had been predicted at - 500, and has improved as a result - now it's predicting an opening drop of 330.

Hope everyone tied to the financial markets has their seatbelt securely fastened this AM.