The audience able to take advantage of the morning's European rate cut was almost entirely composed of the vanishingly small community of insomnia plagued index futures traders, and even that crowd better have taken their gains quickly, as the advance had all but evaporated by the open.

This shouldn't surprise anyone. Markets have priced in "regulatory miracle work" to such an extent at this point that short of turning water into warrants we can't see how any major financial authority can even make markets crawl out of their crate, much less sit up, roll over and fetch.

Several commentators have already called the "fiscal bag of tricks" top (erroneously in our view until this week) and expect that further government intervention will effectively be useless. The United States has perhaps another cut left in it, but that's probably about it. And then? Well, that depends on your view of future earnings and the like. If you think that commercial real estate is going to be just ducky, that LBO loans outstanding will be just fine because their covenants are oh-so-light that acceleration, or default won't be triggered so easily (though this fails to explain how slowdowns in loan payments won't slug bond holders anyhow) and consumer confidence will suddenly rebound when Britney's father hands control of the estate back to the hedonistic pop-star, and commodity prices, currently in a holding pattern over KREC (Recession National Airport), will remain orbiting forever, well, you probably won't mind going long today.

The Bank of England surprised markets with a sweeping one-and-a-half percentage point interest-rate cut Thursday, as central banks in Europe slashed their key rates to stave off deep and prolonged recessions.

The Bank of England cut its key lending rate to 3% from 4.5%, signaling deep concern as the British economy struggles with falling house prices and sharply tighter credit conditions.

The European Central Bank, which makes monetary policy for the 15 countries that share the euro currency, cut its key rate by half a percentage point to 3.25%, as expected. Switzerland's central bank joined in, cutting its key rate target by half a percentage point to 2% in an unusual between-meeting move.

Europe's Central Banks Slash Interest Rates [The Wall Street Journal]