A Chequer-Board of Nights and Days

Whooping and hollering traders and soaring stock prices on Tuesday offered little evidence of the nagging concerns that the Federal Reserve's aggressive 50 basis point rate cut amounted to an admission that problems in the US financial system ran deeper than the Fed's governors first thought.

Charles Diebel, fixed income strategist at Nomura in London, said that by cutting the rate by more than the market expected, the Fed had opted for "shock and awe".

Arthur Hogan, chief market analyst at Jefferies & Co said he was taken aback by the traders' emphatic response, reacting to the cut "as if Ben Bernanke [Fed chairman] has come up with a cure for cancer".

Well, not quite. Doubtless, it will take some time for this rate cut to filter through the economy. But it is a huge shot in the arm and as I have written before, I am much more concerned about a stagnating economy than I am about inflation. I figured that there was a possibility that the Federal Reserve would cut interest rates as much as 50 basis points and the fact that they have leaves me feeling like any downturn will be slight and not recessionary.

Here's hoping, anyway.