The Abyss is Open Wide

And the financial markets are blind, staggering drunk, with their shoes untied.

Not until the last major bank gets a life support shot from an SWF that is just barely off the terrorist watch list - as almost anyone of note is on - will we declare that we really have a problem with our financial system.

299 points down in half a session! That is the loudest Fed barf I've heard in a while.
Cramer and his minions are demanding more and the Fed gave little. Some, but not what the screaming child of financial markets demanded. Hence the tantrum.

Gold and silver fell hard on the news, not because we aren't in an inflationary environment, but because we are only in 3rd gear and throngs want the turbo's kicked in just as we have crested the hill and are nearing a downhill run with worn brakes.
Serious doesn't begin to flesh out this situation. Apparently the banks will not be able to stuff their coffers full enough with the spreads the Fed is decreeing for them - they need that extra 1/4 percent or their script may be called.

Gold and silver never get called. Not even by those that hate them, they are still useful without being a claim on anything other then themselves. The banks are not so lucky to be dead metal. Instead, they are closer to dead meat. WaMu has a life threatening stock collapse and financial flesh wound that is going to force it to seek loads of outside capital to get back to a sound gallop if even for no race at all. Real estate races aren't held any more in case they had not noticed. Citi already found its Suga Daddy SWF.

Were the derivative books settled to market - whatever remains of one, and all the Enron like accounting brought to light, not only would the Fed have to goose the money supply with more credit, but they would also have to slice the rates by closer to full point. That would hasten the dollar slide to windy ride down.

Gold and silver are digesting this news. There time is here and as soon as the money gets scared of the stock market, disappointed in the bond market, flailed in the falling emerging markets, the commodity/PM sector is going to look very tempting.
Shinny as a matter of fact.

Gold and silver will do what they always do in times of turmoil - rise beyond the occasion.