ASTROLOGY BY JAN WARREN ALLEN

The Fed cut the discount rate it charges on direct loans to banks to 3.25 percent from 3.50 percent and set up a new program to provide cash to a wider range of big financial firms previously unable to borrow directly from the central bank.

It took the steps in concert with a decision to approve special financing to facilitate the purchase of ailing investment bank Bear Stearns by JPMorgan Chase. Under the deal, the Fed agreed to fund up to $30 billion of Bear Stearns' less liquid assets.

Senior Fed officials said the extraordinary measures, which extend a series of emergency steps taken over the last 10 days, were needed to ensure that a broad spectrum of financial firms had access to funds after problems at Bear Stearns late last week.

"The Federal Reserve, in close consultation with the Treasury, is working to promote liquid, well-functioning financial markets, which are essential for economic growth," Fed Chairman Ben Bernanke said in a rare conference call with reporters. "These steps will provide financial institutions with greater assurance of access to funds."

The shock move late on Sunday harkened back to the days of then-Fed Chairman Paul Volcker, who engineered a surprise increase in interest rate on a Saturday in early October 1979. 

This time, however, the problem was quickly deteriorating financial conditions, which threaten to push an economy many think is already in recession into a deep, nasty downturn.

The action came just two days before Fed officials gathered for a regularly scheduled meeting and it led financial markets to expect an even more-aggressive cut in the federal funds rate when the meeting wraped up on Tuesday. And indeed, On March 18, they did cut the Fed Funds rate to 2.25%.

In addition to cutting the discount rate, the central bank said it was setting up a new lending program under which so-called primary dealers could borrow directly from the Fed at the discount rate.

"This is designed to help get liquidity to where it can help play an appropriate role in helping address the range of challenges facing, particularly asset backed securities markets," New York Federal Reserve Bank President Timothy Geithner told reporters.

Since the Fed saw to it that another shoe could not fall as far as the banking and credit markets were concerned, the energy had to be released somewhere, and the way it did blew my mind! It manifested in the price of gold; which makes sense if you think about it. The Sun is the natural ruler of gold, and it's square to the 5th house cusp (the natural house of gold and speculation); so this is where the energy was released, or should I say unleashed!