Like dominos, the economical sectors started to crumble, and the last one to go was the jobs' market in December, where other sectors were between ups and downs, one fact was the most dominant and obscure in the markets, the housing slump did not and will not stop anytime soon, and the leak has gotten to the economy's body, reaching to the stage where we are right about now, yet the housing slump continues.

Today, the U.S. existing home sales for the month of December 2007 probably dropped 1% to an annual rate of 4.95 million housing unites, following 5.0 million units in November, the decline highlights again that we still don’t see the light at the end of the tunnel for the housing sector, and accordingly there will be no signs of correction whatsoever in the economy in general as the main cause of it is still valid, and the economies biggest nightmare is goofing around the house.

The Federal Open Market Committee decided in an unusual meeting earlier this week to cut rates 0.75% both on the benchmark and on the discount rates, that was only one week ahead of their scheduled meeting on January the 30th, and now traders are actually pricing at least another quarter point cut in next week's meeting, and if the housing data today came up just as worse as it is expected, I think speculations of a rate cut next week are just going to go up to the extreme.

The U.S. housing slump is the economy's cancer, and until this sector finds the bottom at a certain stage, it is unlikely that the economy will start recovering again, that’s why the fed just keeps lowering rate, as in my opinion they are just trying to shape the bottom of the curve for that huge slump, and yes they have to go as far as they can go to find the bottom, because this thing is not a joke anymore.

Mr. Bernanke and his mates will have to find a way to handle this crisis, maybe cutting rates is the best solution they have now, after trying a couple of options and actually FAILING, like the TAFs, but how far the bank can go with lowering interest rates??!! Is it gonna be good enough to handle the crisis? What about consumer confidence, I think if you want to find the bottom for the housing slump you have to lower borrowing costs, but at the same time you have to get consumers' confidence back in the economy, or at least to convince them that not selling homes might be a good idea.

That's a lot of work to do from policy makers in the world's largest economy, but hey…that’s what they are hired to do and that's what they're getting paid for, so maybe what I am trying to say is, let's watch out for the news today, and let's get prepared for next week's GDP data, and the FOMC next rate call, and lets see how far they are gonna take it…