The Fed's Not Done

The argument against such a move is that huge injections of liquidity will lead to inflation. That's not likely to happen anytime soon with seemingly every asset price falling and both producer and consumer inflation indexes showing month-on-month declines. Also, the Fed would be buying assets. They may overpay, but they may not, so an expansion of the deficit is not guaranteed.

The most recent issue of The Economist magazine warns against the "perils of incrementalism." The editorial recommends supporting banks with direct investment, cutting interest rates, and using more "unorthodox tools, such as interfering directly in credit markets by buying up assets -- a route where the Fed has shown the most creativity." While the risk of inflation is acknowledged, it is better, says the magazine, than "murderous deflation."

The Fed has led the way and the euro-zone needs to catch up. The complexities of the combination of 15 countries sharing a currency are showing through. Friday's Financial Times mentioned that Germany has not had a property bubble. Most Germans don't use credit cards and even if they had the cards most restaurants, supermarkets and the two largest consumer electronics chains don't accept them This makes it easier to understand Chancellor Angela Merkel's warnings about how to handle the crisis. All that aside, expect the European Central Bank to lower rates by at least 50 basis points on Thursday. They should do more or risk falling further behind the curve, but the situation has its issues.

The Bank of England meets the same day and it has been more aggressive about lowering rates and will probably cut 75 basis points off the benchmark rate which now stands at 3% (the ECB is at 3.25%.) Australia will lead the round of reductions when its bank meets Tuesday. Look for the current 5.25% rate to come down significantly.

The big number comes in the U.S. at the end of the week when the jobs situation will be reported on by the Bureau of Labor Statistics. The consensus is for a loss of 300,000 jobs and a move up in the jobless rate to 6.8% from 6.5%.

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Know What You Own: Farrell mentioned JPMorgan Chase. Related stocks are Bank of America (BAC - commentary - Cramer's Take), Wells Fargo (WFC - commentary - Cramer's Take) and USBancorp (USB - commentary - Cramer's Take).

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Vincent Farrell Jr. is chief investment officer for Soleil Securities Group and a regular guest on CNBC and other national print and broadcast media.

Prior to joining Soleil in August 2008, Farrell was a principal of Scotsman Capital Management. Before that, he was chairman of Victory Capital Management of Cleveland and chairman of Victory SBSF Capital Management in New York. He was a founding partner of Spears Benzak Salomon & Farrell, which was acquired by KeyCorp in 1995. Vince held a variety of positions in his 23 years at SBSF, including chief investment officer, and he served as the portfolio manager on a number of the firm's largest client relationships.

Prior to joining SBSF, Vince spent nine years at Smith Barney as a vice president, sales.

Vince graduated from Princeton University in 1969 and received his MBA from the Iona College Graduate School of Business in 1972.