A mad rush by Congress, Bush, the Treasury department and even foreign central banks to "Do Something" is now underway.

If the Fed, Congress, and Central Banks would just stop and think, they would realize they already "did" something. They created the biggest credit bubble in history and we are on the backside of the credit bubble bust right now. It's too late to do anything about that now.

Leverage Continues To Unwind

Market action now suggests leveraged hedge funds are selling what they can (oil stocks like Exxon Mobil (XOM) and tech stocks), not what they want (junk mortgage backed securities). The latter simply has no bid. Recent action smacks of margin call selling or a derivative blowup somewhere.

A Tipping Point For Tech was reached and latecomers hiding out in Apple (AAPL), Research In Motion (RIMM), Cisco (CSCO), Amazon (AMZN), or Motorola (MOT) have been punished mercilessly. Tech is now catching up to financials on the downside.

US Bureaucracy In Action

The US is in a Mad Rush To Nowhere.

"Testifying before the Senate Finance Committee, the official, Peter Orszag, said workload issues at the Internal Revenue Service would prevent the mailing of rebate checks until after the peak tax filing in late May or early June.

And then it could take 8 to 10 weeks to distribute the checks, meaning the impact of the action might not be felt until the second half of 2008 or early 2009."

Add that to the growing list of reasons the Fiscal "Stimulus" Plan Doomed To Fail.

ECB Attempts To Slay Dead Dragon

Meanwhile, across the ocean the ECB valiantly attempts to fight inflation.

"The European Central Bank President Jean-Claude Trichet moved to quash speculation that he'll follow the Fed's lead, saying he's committed to fighting inflation. Investors shrugged off the comments and raised bets on an ECB interest-rate cut. Yields on June rate futures dropped 20 basis points to 3.68 percent."

Those placing faith in the Fed, Congress, or foreign central banks to do something intelligent here need to think again. Faith in the Fed specifically and Central Banks in general has reached bubble proportions. It will be the last bubble to pop.