FED is the White Knight?

It sure seems that way since the market went strait up after that.

The Fed cut the discount rate by a half percentage-point to 5.75
percent but left the federal funds rate -- its main economic policy lever --
unchanged at 5.25 percent.

However, it said it stood ready to act to keep the U.S. economy on
an even keel, giving an immediate boost to beleaguered stock markets.

Right now they have tried everything in the arsenal except for dropping the fed funds rate. I think if they did that outside of their normal FED meeting it might panic the market. It would be an admission that they were to break the glass and hit the "Big Red Button." I wonder what this is doing to the liquidity of that Asset Backed Paper market?

In any case it seems the FED is now the backstop if anything goes wrong in the markets. If the Hedge Funds are leveraging 6x to get maximum returns and their black box goes haywire then the FED will be there to ride in on that white horse. I think they saw what would go down if the Hedge Funds had to really sell assets to cover redemptions. I still think they may not have averted the "Big One" depending on how this mortgage thing works its way through the markets. I still think cash is the way to go until we get more

confirmation.