The dollar reaches new lows. The housing market shows no sign of a bottom. Oil almost touches $84 before backing off. Interest rates go up after the Fed cuts. So naturally the stock market keeps climbing.

The Fed has traditionally reacted to data rather than make forward-looking assumptions. But this week the Fed promised to "keep reassessing our outlook and adjusting policy" as the situation demands.

How predictable was the current turmoil in the market one year ago? On one level, it was not all that hard to see that that there were going to be problems in the subprime mortgage market. But it is one thing to predict a problem, and quite another thing to understand its full implications in the market.

Should the Fed cut the interest rates in two weeks? Will it make a difference? Are we headed into recession?

John Mauldin explains that by eliminating negative alpha, investors could find an extra 2-4% in their returns.

John Mauldin explains in simple terms the very complicated story of how we went from some bad mortgage loan practices in the US to the point of world credit markets freezing up.

his week we look at the similarities and the differences between the credit crisis that is going on today and what happened in 1998, take a quick look at the threat from China to the dollar and see what exotic fish and exotic bonds have in common.

With the economy increasingly looking like it will slow down materially in the last half of the year, there is a drum beat for the Federal Reserve to cut rates. But how likely is a rate cut this year?

The credit markets have finally begun to tighten, as a major re-pricing of risk is underway as a direct result of the subprime markets. The subprime virus seems to be spreading, despite the view a few weeks ago that there would be no "contagion" in the rest of the credit markets.