Contrasting monetary policy moves from the Bank of England (BoE) and European Central Bank (ECB).

The BoE stunned the markets with a 1.5% rate cut, taking its benchmark rate to 3.0%, the lowest in over half a century. The ECB, meanwhile, met expectations with a 50 basis-point cut. The Eurozone’s policy rate now stands at 3.25%.

This from Bloomberg:

The Bank of England is working with the government to limit the fallout from what it calls the worst global banking crisis in almost a century. Prime Minister Gordon Brown was forced last month to broker a takeover of HBOS Plc and Bank of England figures show financial institutions in the U.S. and Europe have already suffered $2.8 trillion in securities losses from the crisis.

“They’re admitting…

Daily Reckoning editor Bill Bonner says everything is going according to plan. An unsustainable credit-fuelled boom popped. And businesses, consumers and financial markets are left reeling. Bill says US stocks could fall much further before stabilising at a ‘normal’ level. Meanwhile, reckless money printing by the Fed will eventually take down the dollar, and light a fire a fire under gold prices.

Consumer shows spooky signs of weakness… recession now unavoidable? How’s your 401(k)? Some scary stats on the average retirement savings plan. Haunting mortgage data… 10 million Americans suffer “negative equity”. U.S. finance capitalism dead or dying… Byron King on the new paradigm for global economic power. Eric Fry on investing during the post-crash bounce. Plus, one “surefire” sector during these frightening times.

The U.S. economy shrank at an annualized rate of 0.3% in the third quarter – the biggest decline in seven years – after businesses cut back on investments and consumer spending experienced its sharpest pullback since 1980. And though the contraction was smaller than economists expected, they are still predicting a drawn-out downturn that could be one of worst U.S. recessions since the Great Depression.

Bill Bonner says the Fed will make this slump longer and harder than it should be. Bernanke & Co are using every weapon in their arsenal to prevent deflation. But they tried this during the Great Depression. And Japan tried it in the 90s. And both times they only managed to deepen the pain.

Huge trend reversal: Dollar busts, commodities boom… why, and will it last? Rate cuts round the world… U.S. and China slash, Japan considers. U.S. three months away from “official” recession. Two new bailouts: Who’s lining up for help, plus Uncle Sam’s October tab. Denning and Nelson on beating inflation with the right long-haul stock.

As expected, the Fed announced a 50 basis point rate cut today. The move brings the benchmark rate down to 1%, the lowest level since 2004.

The Fed said that inflation was no longer a threat and that the central bank will cut rates as needed to boost the economy, according to Marketwatch.

Importantly, the Fed statement drew no line in the sand at the 1% funds rate target, raising the possibility that rates may move lower.

The move raises lots of technical questions about having rates so low, but analysts said these matters are of less concern than ending the credit crunch.

The last time the Fed funds rate was below 1% was in July 1958.

With interest rates so low already, economist at…

We are not going to see the world’s best businesses this cheap for a long time, says Dan Denning. He says it’s not hard to imagine another round of global rate cuts and a massive stimulus package in the US. And then there is the ‘Obama effect’. In other words, if you don’t want to own these equities now, why bother being in the market at all?

U.S. stocks soar!  Currencies rally!  Consumer Confidence at an all-time low!  Getting off the bench! And Now… Today’s Pfennig!

“Better to miss the first 20% of a bull market than try to time the bottom.” Amen to that. Yesterday, the Dow climbed 432 points. There are signs the credit markets are “loosening,” says BusinessWeek. And Fed head Ben Bernanke has called for another stimulus package. Could this be the bottom of the bear? Absolutely. Then again…