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KAI RYSSDAL: We started with them yesterday and we'll do it again today: Overseas stock exchanges. Because they are the proximate cause of the Fed's rate cut. Today was shaping up to be another gruesome session in many of the world's big markets. The Shanghai Composite gave up more than 7 percent today on top of Monday's loss of 5 percent. Europe was tumbling too until the announcement by the Federal Open Market Committee at 8 this morning. Technically, it's called an intermeeting cut. There is a regularly scheduled meeting on the calendar for next week when, who knows, we might even see another cut as the Fed plays catch-up with the economy. Marketplace's Bob Moon gets us started on the news of the day.
BOB MOON: Last week's unemployment shock and growing credit market worries just added to the momentum of the "Bad News Express," threatening to pull the stock market along with it on a steep downhill course.
Today, you could almost picture Ben Bernanke and his crew running alongside as fast as they could to keep up. And even after the Fed sprinted into action, Wall Street investors kept on signaling it'll have to run even faster if it hopes to catch this runaway train.
NIGEL GAULT: It is very difficult to get out in front.
Nigel Gault is chief U.S. economist for Global Insight.
GAULT: Fed rate cuts take time to have a positive effect on the economy. So the Fed is really looking forward to try to help us 6 to 12 months from now.
Not everyone agreed with the Fed action. Some economists voiced concerns it smacked of panic. But others argued with a recession looming and the stock market headed for a possible crash, the Fed had to do something. Doug Roberts is chief investment strategist for Channel Capital Research.
DOUG ROBERTS: Once the spiral started, it would be much more difficult to control, would take even more medicine to do it.
Indeed, the Fed no longer seems concerned about appearances that it might somehow be bailing out stock market investors. University of Maryland economist Peter Morici:
PETER MORICI: The Fed doesn't want to see the stock price of General Electric or IBM or General Motors, or even small companies, fall because the banks have made bad decisions.
Morici expects yet another rate cut when the Fed meets next week. And he says it'll take more than that to restore confidence in U.S. financial markets.
MORICI: Remember, the Fed has general oversight on the banking system. It can talk to the banks directly about their lending practices and demand changes in what they do.
Morici says the Fed needs to tell the banking industry to clean up its act, once and for all.
In Los Angeles, I'm Bob Moon for Marketplace.