Breaking: Fed Drops Rate another Quarter Point; JP Morgan buys Bear Stearns.

Wow. Does Helicopter Ben get double time for working Sundays? From the AP:

WASHINGTON - The Federal Reserve announced a series of new steps Sunday to help provide relief to a spreading credit crisis that threatens to plunge the economy into recession.

The central bank approved a cut to its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans.

The steps are “designed to bolster market liquidity and promote orderly market functioning,” the Fed said in a statement. “Liquid well-functioning markets are essential for the promotion of economic growth.”

In other news, JP Morgan Chase is acquiring Bear Stearns for 236.2 million, in what can only be called a disastrous collapse of one of the biggest investment firms. Bear Stearns was heavily exposed to the Subprime disaster, and this is being done to avert a bankruptcy. Good on the Fed and the government for approving this over the weekend. Had this not been done, and Bear was allowed to go under, the resulting run on global investment banks may have caused a major problem. Watch the markets this week closely. We’re coming out the other side of this slowly, and we’re trying to find a market bottom. However, the market’s still negotiating No Man’s Land, and there’s a lot of Bouncing Betty’s out there still.

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