The Feds had to cut their discount rates between banks by 0.25% to 3.25% on Sunday after Bear Stearns was about to go bankrupt. However, JPMorgan bought Wall Street's fifth largest securities firm for $240 billion, almost 90 percent less than its value.

What rushed the Feds to take action was that they were afraid of a further meltdown in the financial system after confidence was shaken when investors were alarmed by speculation that there is cash shortage. Shareholders of Bear Stearns will get stocks in JPMorgan for equivalent to $2 a share compared to its $30 per share closing price on March 14.

The Commerce Department released its Current account reading for the fourth quarter showing that the deficit had narrowed by 3% to $172.9 billion which is approximately 4.9% of the GDP.

Over the past year, the deficit with the whole world declined by 8.9% to $738.6 billion marking the first drop since 2001. 2007 was much brighter than 2006 as the current account deficit totaled to 5.3% of the GDP compared to the 6.2% reported in 2006.

Knowing that the current account measures the flow of goods and services in and out of the U.S., it measures how much Americans need to borrow in order to finance their consumption and investment.

The deficit had narrowed mostly because of the increasing exports as the dollar weakened but few believe that a current account deficit of 5% of the GDP is prolonged. In addition, global growth is seen to be at stake as global policymakers believe that the deficit will affect the global economy.

The depreciation of the dollar by 5% in the fourth quarter against majors helped narrow the deficit and it could still be further narrowed if devaluation in the dollar is witnessed.

The details throughout the quarter show that the deficit on goods and services trade increased to $177.9 billion from $172.6 billion. Goods trade alone rose to $208.1 billion from $200.5 billion while the surplus on services trade inclined to $30.2 billion from $28 billion.

The surplus on income jumped to $33 billion from $21.3 billion. U.S. investment income from assets owned abroad dropped to $203.5 billion from $205.7 billion. Foreign investment from assets owned in the U.S. slipped to $168.8 billion from $182.6 billion.

Net financial inflows rose to $230.1 billion from $111.1 billion after foreigners continued to buy U.S. financial Assets. As for the foreign direct investment in the U.S., it also increased $39.9 billion in the fourth quarter despite the rise of $101.3 billion in the previous quarter.

Another sad moment for the Feds…their measure of New York Factory activity slid downhill to record an ever low in March. Manufacturing in New York fell for the second consecutive month in March as it was released at -22.2 compared to the previous reading of -11.7 in February. Readings below zero is a sign of contraction, and since the U.S. is pretty much in a recession then it doesn’t come in a surprise to the Feds.

Also, the US released its Net Long-Term TIC Flows coming in showing a surplus of 62 billion better than the previous reading of 56.5 billion.

Finally, the U.S. industrial output declined 0.5% in February from 0.1% in January. As for the capacity utilization, it fell to 80.9% from 81.5%. The drop in the industrial output was mainly a result the 3.7% decline in utilities' output due to bad weather.

With all these fundamentals out, it still wasn't able to allow the greenback to recover the losses it had previously recorded. The dollar sank to $1.5903 against the Euro while the yen was able to record a low not seen since August 1995 at $95.76. Similar to a pulley, U.S. treasuries and dollar commodities flew while the global stock markets plunged.

Traders now have increased their bets that the Feds will cut their benchmark interest rates by 100 basis points tomorrow from what was previously seen as only a 75 basis point cut. The sky is the limit for anything but the dollar and new records are on the verge of emergence. Stay tuned and don't touch that mouse as there is still more to come tomorrow…but until then sit back and see how good of an analyst you are and gamble with yourself to see whether u can guess the right number!!