• Let’s hope yesterday’s half-point rate cut worked. At 1 percent, the Fed can’t go much lower. Technically, of course, it can go to 0 percent, then try alternatives, like targeting the rate at monthly or yearly periods, instead of overnight. But even the current rate is a historic low, and pulling out even bigger guns would probably take a renewed crisis to justify. Going further could even spark a renewed panic itself if investors felt the Fed was going overboard or knew something they didn’t. (Plus, a 1 percent rate already has some experts talking about deflation.)
  • Consider it the first step down a long road: According to the New York Times, the European Union has drafted new rules for credit rating agencies, including requirements that they make their formulas transparent. Since almost everyone agrees these agencies’ laxity in marking shaky credit was a key part of the meltdown, Washington should double-time it to follow Brussels’ lead.
  • For those who enjoy ever-unfolding details about financial misery, CNBC has a piece about some 400,000 investors who can’t access savings in the Reserve Fund, a money-market fund that “broke the buck” a month ago. “They even bragged that you could sleep at night if you invested in their funds,” said one investor. “In the past month and a half, we don't sleep at all.” Remember: It could always be worse.
  • Oh wait, it is: The American Council on Education reports, via the Washington Post, that higher-ed costs will go up steeply in the next few years, as states cut funding and endowment investments shrink.
  • Despite the continued ugliness, the Commerce Department reports the economy contracted at a 0.3 percent annual rate in the third quarter of 2008, better than the 0.5 percent contraction many expected. So there’s that.
  • Oxford Analytica, via Forbes, has a new report arguing that the financial crisis has boosted the IMF’s battered reputation. Maybe--it has certainly underlined the Fund’s relevance. But then Strauss-Kahn and Friends go and do this: The Wall Street Journal reports that yesterday the Fund announced a $100 billion facility, with none of its usual structural-adjustment strings attached, to countries that are flailing but have nevertheless sound economies (according to its own standards). That means Mexico--Mexico!--can get essentially free money without having to challenge its oil bureaucracy, while the likes of Belarus still have to jump the reform hoops.

--Clay Risen