In mid November, Bank of American Corp. (BAC) ponied up more than $7 billion to nearly double its already existing investment in the state-owned China Construction Bank Corp., a move that gave the biggest U.S. bank a 19% stake in China’s second-largest lender.

U.S. payrolls data show steepest fall in 34 years… Dollar falls to 6-week low vs yen, but rises vs euro… Markets fully price another half-point rate cut

Gold eases in quiet trade, traders eye next week’s data… Gold set for biggest gain since 1999 on safe haven buying

The European Commission (EC) said yesterday (Monday) that the Eurozone economy has already slipped into a recession and strong and stable economic growth will not return until 2010. The European Central Bank (ECB), originally charged with the task of maintaining price stability, has now found itself with the added responsibility of encouraging growth and will likely cut interest rates later this week.

The U.S. government yesterday (Tuesday) announced plans to invest $250 billion, more than a third of the $700 billion congressional bailout allotment, into nine of America’s largest banks in an effort to bolster confidence in the financial system. Similar to steps taken by European governments earlier this week, the government will guarantee new debt and take equity stakes in the participating banks.

Governments across Europe yesterday (Monday) took the first step in a new, coordinated effort to subvert the widening credit crisis and restore functionality to the markets by guaranteeing new debt and using taxpayer money to bail out troubled lenders all over the continent.

The U.K. government yesterday (Wednesday) announced its own banking bailout package with an $87 billion (50 billion pound) recapitalization plan for the ailing British financial sector.

In a bold move to provide stability to the frozen short-term credit markets, the U.S. Federal Reserve yesterday (Tuesday) announced new measures aimed at boosting liquidity and allowing corporations to maintain daily operations. But the U.S. markets were less enthusiastic about the Fed’s new measure. Slight gains in early morning trading quickly reversed course to plunge much lower.

Despite a $700 billion bailout plan and huge injections of liquidity, money markets are frozen. Today, the London Interbank Offered Rate (LIBOR), which measures the cost of lending between banks, hit new record highs for all currencies.

Money Morning’s Keith Fitz-Gerald says this shows the worst is still to come in this credit crisis.

Keith has three recommendations for investors: 1) Hold T-bills; 2) Look for inverse investments; and 3) Include hard assets and inflationary hedges in your portfolio.

S&P Slashes RBS Rating; Dendreon’s Big Boost; Eli Lilly Comes Out Ahead on ImClone; AgFeed’s Hungry For Its Own Shares; Bank of America Surprises with Loss; Paulson Taps Another Goldman Exec.