Jim:   Hey, uh... Weren't we supposed to crash today?...

Wasn't this supposed to be the big one?... The selloff to end all selloffs?...

Oh, sure, some of the selling pressure abated, and we rallied, because the nare-do-well hedge funds that were in trouble finished their selling to meet their redemptions...

But when you're down enough in that game, they make you give the money back in the fifth business day, which is Monday, so the selling ended, at last, today... They get the money, they give the money back to investors on Monday... But judging by the big, and entirely unexpected, rally in the financials, I think there's something bigger afoot...

Now, after that nasty Labor Department (i.e., Jobs') number this morning, that's now taken us to over 6% unemployment... after the tremendous historical collapse in all commodities... after the remarkable run in the dollar... and, after the earnings debacles we've seen in pretty much every sector, except those you can smoke, drink or eat... it is just amazing to me that nobody's talking about the Fed... get this... the Fed slashing rates! Nobody...

All we hear about is that they're about to raise rates... All we hear about is any day now, that it's time to take them up...

And I'm here to tell you that that is absolute nonsense after today.

Now, interest rates are plummeting... the regular rates... not the Federal Funds rates that the Federal Reserve controls...

We are obviously going to experience not a slowdown, after we saw the employment report, but a recession...

Now, we aren't getting any relief from anybody... from the Federal Reserve or from the Treasury Department.

Now, you heard Bill Gross... he's the biggest bond buyer in the world (i.e., at Pimco), give a "boo-yah Hank" in his newsletter yesterday... He is saying that (Treasury Secretary, Hank) Paulson, this weekend, right now, has to clean up the mess that we've been saying... that is now 12 days overdue... and buy hundreds of billions of dollars in Fannie Mae (FNM) and Freddie Mac (FRE) common... the common stock, preferred and, of course, their bonds. It's imperative, if we're going to get through this... and there's talk that it could happen imminently that we need to resolve the mortgage situation. Oh man, it would be bullish if Paulson listened to Gross, and backstopped FNM and FRE... because it is so bad for those two knuckleheads...

But, all I hear about is, when is the Fed going to tighten (i.e., increase rates)?...

After today - after this morning's number - let's put that question to rest once and for all... The Fed would tighten, when things are far, far better than they are now...

Now, this is just forgotten... it drives me crazy. Do you know just a few years ago, the sainted Alan Greenspan (i.e., former Federal Reserve Chairman) took rates down to 1%?... At the end of 2003, he took rates down to 1%... That's 50% below where we are now... And, believe me, things were nowhere near as bad in this country back then, as they are now... nowhere... not even close.

So, beginning next week, and we're anticipating this on our show tonight, you will begin to hear a new drum beat... We need another rate cut...

Consider everything... every single thing that has kept the Fed from lowering rates, or has given the hawks ammo to actually raised rates, has changed virtually overnight...

Gasoline... That was at $4.25, going to $5.00... Right here, it's going to $3.00...

Employment... It held up pretty well, right? Not anymore, that's out the window... We've got real job losses, scads of them...

All those commodities... Remember when steel was out of control? Remember when copper couldn't stop... grain going to $16... how about iron? How about zinc? They are all getting obliterated...

Natural gas... down 45%.

So many people were worried that, if the Fed cut again, the dollar would be annihilated. Well, guess what? The dollar is screaming right here. I went to Paris in April, like a fool, and now the dollar's about 10% more valuable than it was when I took my trip... and it isn't stopping...

But now we actually need to stop the dollar's climb, just stay competitive, and a rate cut could do that.

How about retail?... Did you read one article that didn't say that retail's the worst environment in years? Is that a good situation to raise rates? Hey, we should raise rates, because no one's making any money in retail...

How about housing?... Your house should lose about another $500 in value between now and our next commercial break... and, by the 11pm version of our show, you're house will lose about another $780... But, you know what? Those values are not in the consumer or producer price indicies, so you don't hear about them... and the Fed obviously doesn't seem to care about that incredible deflationary story...

Yes, we are in the grips - not of inflation - but of the most major deflation in this country's history, except for the Great Depression... and the Fed needs to step up and answer the call, and it ain't raising rates, even if the Fed thinks it's done...

I had hoped that we wouldn't even need more rate cuts... but I had the guts to call for them last year and now, tonight, I am saying, unfortunately, because of the employement number, we've got to go back at them...

We need them now, and we need the mortgage mess resolved, using the Bill Gross plan - we need a resolution mortgage trust - and it will make a difference, despite the canard that lower rates won't do it...

Now, I believe a big reason why we didn't crash today, as we were supposed to... is that the rate cut theory that I just espoused is just now percolating under the radar...

I believe, next week, all of the fools, knuckleheads, morons... whatever you want to call them... would say that we need a rate increase... They will all be replaced from the airways... even so gradually that we'll start seeing "cut-rate" people come on... and Fed, inject money into Fannie and Freddie... and Treasury, buy some mortgages, and go public with the resolution mortgage trust... like the FDIC is quietly doing right now, and why we recommended BB & T Corp. (BBT) earlier this week...

And we've got to get America moving again... I mean, this was a wakeup call this morning... I am not a political guy, but it is amazing to me how neither major candidate is talking about the need for lower rates, and injecting cash into the mortgage market... or creating a resolution mortgage trust.

Memo to candidates... you want to get elected? It ain't drill, drill, drill.... Save our homes...

I think, beginning next week, you'll hear people saying that the bond market is speaking softly now, but soon it will be loud...

We are free to cut rates again, to rebuild the bank's capital... and we now, with this employment number, can make the move.

Your Game Plan for next week is to continue to buy more of our recommended banks and brokers... You know that we said that group bottomed... but, before we start hearing these voices... before the sensible advice drives the stock up...

Now, we still had a horrible week, despite the great close today... one that was absolutely deadly... And yet, it's worth remembering that we have not taken out those July 15ht lows that we were talking about, which are still substantially below where we are.

I think they hold. I am not backing down, even if the catcalls, and the criticisms and the usually slagging that would make me unable to get out of bed each morning, if I took it seriously...