Fed Joins Global Rate Cut, Trims Rate 50 Basis Points (CNBC.com)
At long last, the Fed cut rates this morning, by half a percentage point. To be honest, they had no choice: the Hong Kong Monetary Authority, Bank of England, and European Central Bank all cut rates by half a percentage point today. At one point, HKMA lowered its rate-spread over the federal funds rate to 50 bps, from 150 bps.

US STOCKS-Futures leap as central banks slash rates (Reuters)
Given that stock futures were in a funk before the Fed came and saved the morning, it will be interesting to see if a sustainable rally holds up today. It's also worth remembering that the short-selling ban comes off today: you can speculatively sell Goldman Sachs now! [Ed: OK, well, technically not until tomorrow since I am reminded the ban comes off at 11.59 pm] This could actually have an upside affect, as funds are encouraged to buy financials again, knowing they can now hedge some downside out. S&P futures are jumping 28 points, Dow futures are climbing 173 points, and Nasdaq futures are up 36 points.

Asian markets crumble, Nikkei 225 dives 9.4% (Marketwatch)
We knew it was going to be bad in Asia today, but not this bad. Japan's Nikkei tumbled 9.4%, to 9,203.32; Hong Kong dropped 8.2%, to 15,431.73 (more than a 2-year low); Indonesia lost more than 10%. "I don't think anybody has seen anything like this before, except those who are over 75 years old and have seen the Great Depression," says Dale Tsang from Imperial Dragon Asset Management. Despite the woes, Mitsubishi itself is now saying that it's still buying that stake in Morgan, which to be honest, it probably will. Don't believe the rumors.

Volvo Cars To Lay Off Another 3,300 Employees (DJ via CNN Money)
More layoffs in the automotive sector. There's some thinking among market participants that the Fed's new ability to lend to corporations may well start (and end, according to bears) with U.S. car manufacturers.

UK government steps in to help banks (AP)
The British government is offering an $87.5 billion package to part-nationalize any banks who need the help, at the same time as it's also offering a $350 billion short-term credit facility. To qualify for the help, you have to have one of the following eight names: Abbey National, Barclays, HBOS, HSBC Bank, Lloyds TSB, Nationwide, RBS or Standard Chartered. My guess is Barclays, Abbey, Nationwide, and maybe RBS will end up taking them up on the offer, while the rest won't. Any other suggestions?

Oil Slumps to 10-Month Low, Metals Tumble on Credit Turmoil (Bloomberg)
The price of black gold is plunging along with the rest of the market: oil is now at around $86, while copper, nickel, and aluminum are all off. The countdown is now on for the first "I want to make a name for myself by calling a random round number" analyst to suggest oil will hit $50 by Christmas. If you spot him or her, e-mail us. Meanwhile, any guesses for how low oil will fall to this year?

Alcoa Profit Falls 52%; Buyback Plan Ends (New York Times)
Looks like it's a gloomy day for the metals guys. With aluminum prices off 32% on the year, Alcoa said its net profit fell short of the street's expectations. It made $268 million last quarter, or 33 cents a share, down about half from the first quarter. MacArthur puts a price target on Alcoa of $25 now, from $46 previously ... though given how out analysts' expectations have been on earnings and performance this month, that's not saying a lot.

Costco Results Benefits From Bargain Hunting (WSJ)
Just when everyone else is thinking that things can't get much worse, Costco's getting the best of the silver lining. Costco Q2 earnings have come in at $397.8 million, or 90 cents a share -- that's around 7% up on the first quarter. Costco says that people's desire to save is the reason for the jump in its sales. Actually, in real recession conditions, you would expect to see a bigger jump than this in earnings of companies such as Costco. The 7% jump probably indicates that people don't feel quite as poor as the media says they do (a story they love reporting, largely because journalists always feel poor).

'Wasn't Us,' Former AIG Chiefs Say (Forbes.com)
If you thought Dick Fuld's testimony to the House Oversight Committee was a little short on a mea culpa, try AIG's chief's yesterday: former CEOs Martin Sullivan, Robert Willumstad, and shareholder and manager Hank Greenburg all claimed the insurance giant's problems were not anything to do with their management style! Actually Greenburg said AIG went under because of Sullivan and Willumstad, while they in turn blamed mark-to-mark accounting rules (which actually, is sort of true).

TCS to Buy Citigroup Arm In India for $505 Million (WSJ)
The Indians have finally got in investment bank bargain-hunting mode. Tata Consultancy is paying $505 million in cash for Citigroup's Indian back offices. In a "separate" deal, Tata is getting a $2.5 billion, 9.5 year contract with Citi. Tata's bid here looks savvy: if there is one area of banks in the whole crisis that has come through relatively unscathed, it's the back offices.

ING Buys 3 Billion Pounds of Deposits From Icelandic Banks (Bloomberg)
Dutch ING to the rescue again! ING is buying $5.24 billion of consumer deposits from Landsbanki. ING, you may remember, bought the debt-saddled Barings in 1994, after trader Nick Leeson brought the British bank down through derivatives bets gone wrong.

Cramer: Don't Sell Forever (TheStreet.com)
After his "I don't want to yell fire in a crowded room ... but FIRE!" speech on national television Monday, Jim Cramer is now saying that investors ought not to sell everything. "When I say sell ... there's still plenty of defensive stocks I like," says Cramer. "I'm a hot button -- there's lots of people who want to take me down at all times, but it's just sport."