How secure is the world?

When the overnight lending rate surpasses that of the day after September 11 attacks, I think it's fair to say there's a small panic brewing on Wall Street. Question is, when will this ridiculous swing of Dow Jone and TSX index turnaround for the better?

AP says Financial companies borrow record amount from Fed

Banks, investment firms push borrowing from Fed's emergency loan program to record

WASHINGTON (AP) -- Banks and investment firms borrowed in record amounts from the Federal Reserve's emergency lending facility over the past week, providing fresh evidence of the credit stresses squeezing the country.

The Fed's report released Thursday said commercial banks averaged a record $44.5 billion in daily borrowing over the past week. That compared with a daily average of $39.36 billion in the previous week. On Wednesday alone, banks borrowed a record $49.5 billion, surpassing the previous high that came one day after the Sept. 11, 2001, terror attacks.

For the week ending Wednesday, investment firms drew a record $147.7 billion. That was up significantly from $88.15 billion in the previous week. This category was broadened last week to include any loans that were made to the U.S. and London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley and Merrill Lynch. On Wednesday alone, investment firms borrowed a record $146.6 billion, breaking the previous record set on Sept. 24.

Well, with the revised Bailout $700 billion plan to a $850 billion rescue plan, the overall market today just seemed doom and gloom overall.

Yesterday's manufacturing index ISM, fell drastically from the month before and caused further deterioration on consumer confidence. In fact this is close to the supposely "repression" level of ISM which is an arbitrary 

Manufacturing index tumbles

Survey of purchasing managers shows factory activity fell more than expected in September.

NEW YORK (CNNMoney.com) -- A key measure of the nation's manufacturing activity fell in September to a nearly seven-year low, nearing a benchmark that indicates a recession, a purchasing manager's group said Wednesday.

The Institute for Supply Management's (ISM) manufacturing index fell to 43.5 in September, down from the August reading of 49.9. It was the lowest reading since the 40.8 measure in October 2001, the month following the terrorist attacks on New York and Washington.

Economists were expecting a reading of 49.5, according to a consensus estimate compiled by Briefing.com.

The tipping point for the index is 50, with a reading below that indicating contraction in factory activity. A reading below 41 marks a recession. The index has hovered around the 50 mark for the past 12 months, with an average of 49.6.

The sharp decline of key indicators such as employment, new orders and production is the most troubling aspect of the report, said John Silvia, economist at Wachovia. The weakness in those sectors will serve to make a 'pretty miserable' outlook for fourth-quarter industrial production, he said.

Employment is especially weak, which will weigh on personal income, further supressing consumer spending. That the index didn't sink to the technical standard indicating a recession doesn't matter, Silvia said.

"We're in a recession. What are you going to do? We're not going to be able to fudge this," he said.

In what could be a portent of Friday's September employment report, ISM's employment indicator tumbled to 41.8 from 49.7, marking the second month of decline in the sector.

If 41 ISM score marks a recession, do you think it feels like we're only 2.5 on the index from a recession then? Is that too optimistic? 

As per our usual simple inflation up = gold up strategy - but as you can can there's a slight change of plans today... silver and gold are flat along with most of the market.

As usual, for those who can stomach the risk, there are so many great deals out there its' frigtening. 

Gold falls 5% after Senate approves bailout plan

Gold's losses followed broad declines in precious metals and other commodities. Silver plunged 13%.

Gold for December delivery lost $43, or 4.8%, to end at $844.30 an ounce on the Comex division of the New York Mercantile Exchange, the lowest closing price since Sept. 17.

"There was some relief buying in the dollar when the Senate passed the latest proposal, which has forced gold lower," said Peter Grant, a senior metals analyst at USAGOLD-Centennial Precious Metals.

In other precious metals, December silver tumbled $1.65 to end at $11.12 an ounce. Platinum for October delivery lost $50.10, or 4.9%, to $979.60 an ounce, falling below the $1,000 level for the first time since early 2006. December palladium slid $7.75, or 3.7%, to $203.20 an ounce.

Commodities moved broadly lower Thursday, with the benchmark crude-oil contract down nearly 4% to below $95 a barrel. See Futures Movers.

The Reuters/Jefferies CRB Index (CRB:

328.42, -14.82, -4.3%) , a benchmark gauging the prices of major commodities, fell 4.3%.