Spend. IF you got it.

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The case for doing more is twofold. One is to cushion the blow to families and communities, even if some are culpable. The other is to disrupt a dangerous downward spiral in which falling prices of houses and mortgage-backed securities lead lenders to pull back, hurting the economy and dragging asset prices down further, and so on.

In ordinary times, a capitalist economy lets prices -- such as those of homes, mortgage-backed securities and stocks -- fall to the point where the big-bucks crowd rushes in, hoping to make a killing. But if the big money remains on the sidelines, unpersuaded that a bottom is near, the wait for bargain hunters to take the plunge could be very long and very painful.

So the next step, no matter how it is dressed up, is likely to involve the government's moving in ways that put a floor under prices, hoping that will limit the downside risks enough so more Americans are willing to buy homes and deeper-pocketed investors are willing, in effect, to lend them the money to do so."

If the Fed is likely to employ such measures on the downside, could it also resort to placing a cap on certain other prices as well? Nothing would delight the manipulation clubs more. Finally, they could have the proof they have been unsuccessfully seeking since time immemorial.

Remain on alert for emerging perceptions of a turn in credit market conditions and how they square with lingering apprehensions that any such turns are in fact small bounces at the bottom of a deep barrel. Equity market gains gave way to a retreat, as the effects of latest set of economic numbers wore off this fairly fast today. Back to dollar watching. With oil up $1.66 per barrel to $107.50 we would also keep an eye on it before the weekend.

Happy Trading.