A Rate Cut, But Stocks Still Tank

Despite a one-half percentage point cut in key interest rates by the Fed - coordinated with central banks around the world - investors were not persuaded at the end of the trading day that the economy would respond quickly to the move.

What will it take to turn around the markets and the economy?

In one word, confidence.

Until the market and banks have confidence that the economy is turning around and lending can resume with some confidence of repayment, things are only going to get worse.

And, until the credit markets begin functioning and banks resume lending, it is unlikely the economy will bottom out and begin a rebound.

Investors may be waiting, in part, to see how the presidential election turns out and what the new president is willing to do to resuscitate the economy.

It is going to be a long 30 days.