Wild gyrations in the market; emotions are trumping facts at the moment

The lack of follow-through to today's coordinated interest rate cuts is not all that surprising in light of the deeply-rooted anxieties that exist amongst investors -- it will take time for frayed nerves to calm and for emotions to catch up to facts.

What are these facts? The most important include: the U.S. and U.K. injections of public money into the banking system, the U.S. plan to remove troubled assets from the books of financial institutions, the incredibly extraordinary expansion of the Fed's balance sheet, the cut in global interest rates, and the elimination of the virulent worldwide inflation problem and the related excesses in emerging markets that were threatening the secular upturn in the global economy.

And why did the central banks wait until after the LIBOR rates were fixed to make their coordinated cuts? They are out of touch with the reality of the markets.