This Post was written by Minyanville contributor Minyan Peter.

Based on yesterday's Consumer Credit figures for February, in the "shoot twice, think once" world in which we increasingly live, I can already hear Congressmen condemning credit card issuers for cutting off credit to consumers.

But, before you act, I would strongly recommend that you completely ignore the headline data.

First, in a world of secular debt deleveraging, "seasonally adjusted data" is meaningless. And particularly for credit card lending, where Christmas is so important. And given the this past Christmas was a bust, the seasonal data for December, January and February don't make any sense.

Ah, yes. Tuesday, baseball season, and new NCAA champs. Sigh. Online classified ad growth skyrocketed by 84% in February, according to Hitwise (tip to MarketingCharts.com). The bad news? Craig's List and other free classified sites dominated the growth, further sealing the doom of newspapers. Steve Ruble of Micropersuasion interviewed Jeff Jarvis of "What Would Google Do?" fame (and Buzzsaw, of course) and asked what the future of online advertising was. The reply? Bleak to non-existent.

We all know that the real estate market is in trouble, and another sign of just how bad things are came out today as the National Association of Realtors announced another steep drop in home prices during the fourth quarter.

The NAR started keeping comprehensive data on home sales back in 1979, and in that time period there has not been another quarter that saw home prices drop as much as they did in the fourth quarter of last year. So just how much did values drop? A massive 12.4%.

Banking analyst Meredith Whitney is credited with questioning assets on bank balance sheets given the collapse in the real estate market.

Taking advantage of a complete lack of information, Ms. Whitney triggered a massive collapse of trust in an industry by claiming that mortgage-backed securities were worth far less than what the market had perceived.

While she may have had a basis for her claims, her assessment was more sensational than factual. Mortgage-backed securities are quite complex instruments whereby loans are sliced, diced and packaged for sale to a global market.

With maturities extending 30 years into the future, it is unreasonable and unfair to assume that paybacks, even with high default rates will amount to what is currently priced into the market.

The lack of understanding of the underlying security or loans at the individual level has created uncertainty that has yet to be resolved.

For fans of the original "Star Wars" movie, think of the weakness in terms of attacking the Death Star. That one hole was exploited (we can debate the merits of doing so later) by Ms. Whitney and those like her.

More progress on the credit market front.

The initiative by major central banks to increase the supply of dollars globally to free-up credit continued to move rates in the right direction early Monday -- down -- as rates fell to their lowest level since the failure of Lehman Brothers on September 15.

The London rate for three-month loans in dollars declined for the 16th consecutive day, dropping another 17 basis points to 2.86%. The three-month rate for the euro, the Euribor, also fell 3 basis points to 4.74%. Rates also fell in Asia.

Meanwhile, the London interbank overnight rate, or LIBOR, decreased 2 basis points to 0.39%. In addition, the difference between what banks and the U.S. Treasury pay to borrow dollars for three months, the TED spread, fell to 224 basis points, which is down from 364 basis points on October 10.

Short-term rates, including overnight rates, are key sources of cash for corporations and other large institutions, which use the cash to pay suppliers, make payroll, roll over debt etc. Hence, very high overnight and short-term rates will discourage corporations from conducting business, restricting commerce and slowing the economy, economists say.

Short-term interest rates continue their downward trek.

The effort by major central banks to increase the supply of dollars globally to free-up credit continued to move rates in the right direction Thursday -- down -- as private banks were encouraged by the U.S. Federal Reserve's interest rate cut and $120 billion in new swap lines with emerging market central banks.

The London rate for three-month loans in dollars declined for the 14th consecutive day, dropping another 23 basis points to 3.19%. Rates also fell in Asia: the three-month rate for Hong Kong, the HIBOR, dropped 15 basis points to 3.39%.

Meanwhile, the London interbank overnight rate, or LIBOR, plunged another 41 basis points to 0.73% - - its lowest level since January 2001.

Short-term rates, including overnight rates, are key sources of cash for corporations and other large institutions, which use the cash to pay suppliers, make payroll, roll over debt etc. Hence, very high overnight and short-term rates will discourage corporations from conducting business, restricting commerce and slowing the economy, economists say.

The thaw in short-term interest rates continues.

The effort by major central banks to increase the supply of dollars globally to free-up credit continued to move rates in the right direction Wednesday -- down -- as private banks were encouraged by commercial paper purchases by the U.S. Federal Reserve and a likely interest rate cut later today.

The London rate for three-month loans in dollars declined for the 13th consecutive day, dropping 5 basis points to 3.42%. The three-month rate for the euro, the Euribor, also fell 2 basis points to 4.83%, and the three-month rate for Hong Kong dollars, the Hibor, dropped 30 basis points to 3.54%.

Short-term rates, including overnight rates, are key sources of cash for corporations and other large institutions, which use the cash to pay suppliers, make payroll, roll over debt etc. Hence, very high overnight and short-term rates will discourage corporations from conducting business, restricting commerce and slowing the economy, economists say.

The meltdown in short-term interest rates continues unabated.

The effort by major central banks to increase the supply of dollars globally to free-up credit continued to move rates in the right direction Wednesday -- down. The London interbank overnight rate, or LIBOR, fell another 16 basis points to 1.12% -- its lowest level since June 2004. The London rate for three-month loans in dollars declined for an eighth consecutive day, dropping 29 basis points to 3.54%.

In addition, the difference between what banks and the U.S. Treasury pay to borrow dollars for three months, the TED spread, fell to 248 -- down from 434 basis points a week ago.

Short-term rates, including overnight rates, are key sources of cash for corporations and other large institutions, which use the cash to pay suppliers, make payroll, roll over debt etc. Hence, very high overnight and short-term rates will discourage corporations from conducting business, restricting commerce and slowing the economy, economists say.

Does today's record 936 point rally in the Dow mean that happy days are here again? I think it's a gift to investors who want to stop their losses after having seen their portfolios plummet in the last year. Last week, the Dow fell 22%, destroying $2.4 trillion in market value -- it gained back $940 billion of that today. As an unpleasant reminder, after today's 11% rally, the S&P 500 has lost 36% of its value in the last year. And, while I hope I am wrong, I don't see the conditions yet in place to believe that we have reached bottom with the economy and can now expect the earnings growth that would justify investment in stocks

Today's rally feels good but it is highly likely that there was an element of short covering driving up the market. Last Wednesday, the SEC lifted its ban on short selling. Investors who shorted financial and insurance companies were doing quite well last week as fears of another financial bankruptcy mounted. With today's successful save of Morgan Stanley (NYSE: MS), anyone who was short that firm -- or other financial stocks -- was forced to buy those stocks as they spiked in order to repay their stock loans. This probably contributed significantly to a buying panic.

If you need your money in the next six years, you could sell first thing tomorrow morning and you will be able to limit the losses that could come from unpleasant surprises. What kind of surprises? Here are two:

• Credit Default Swap settlements. There is no central repository of information about who owes how much to whom for their CDS obligations. Nor is there solid data on how much these CDS counterparties have in their capital accounts in the event of a default that triggers their obligation to pay up. For instance, I was surprised to learn that Goldman Sachs (NYSE: GS) had a $20 billion obligation in the event of an American International Group (NYSE: AIG) failure. Who else is out there with such obligations? Do each of these counterparties have the ability to get the government to bail them out by taking over the company to prevent them from having to pay? Probably not.

TheStreet.com's Jim Cramer says the rejected bill was about rescuing credit markets, not rescuing Wall Street.

So what if the plan would have benefited some fat cats? Everything's always going to benefit fat cats. That's how things work, unless you want a Leninist or Maoist society.

What people needed to care about were the 90 million families who own stocks and the millions of people who are about to get kicked out of their homes who had a hope to be able to refinance with someone from the government rather than a collection agency.

You want bailout? Fannie (NYSE: FNM) (Cramer's Take) and Freddie (NYSE: FRE) (Cramer's Take) were bailed out. AIG (NYSE: AIG) (Cramer's Take) was bailed out. Those directly helped some of the wealthiest people and nations in the world. The AIG bailout could cause the U.S. government hundreds of billions of dollars, because of credit default swaps. Those were bailouts.

This package was about stopping home price depreciation before it hit 40%, 50%, 60%. It was about the private sector being able to buy failed banks, not the public sector, which is what will now have to happen.

American Express (NYSE: AXP) saw a big sell-off in its shares during the after-hours session on Monday following the release of its second-quarter earnings numbers. The shares already closed down over 11%.

It isn't difficult to comprehend this one. According to Earnings.com, Wall Street was hoping for the credit company to make 83 cents per share. American Express only delivered 57 cents per share from continuing operations. Not only did the company disappoint the Street by a very wide margin, but it disappointed itself, since that 57 cents per share represents a 35% drop compared to the bottom-line results achieved a year ago.

Yep, the financial crisis is still with us. American Express needed to significantly add to its credit reserves. Management stated that the economy is having a negative effect on its cardmembers, and that previous guidance can no longer be relied on. Translation: don't buy this stock! At least, that's my opinion.

I simply can't see allocating investment funds to American Express at this point. If investors wanted to get some exposure to plastic, all they would need to do is consider Visa (NYSE: V) or MasterCard (NYSE: MA). Both of these businesses are based primarily on transactions, not on credit risk. Whenever a card is used, these businesses get a little cut. And that adds up, my friends. Granted, both of these companies sold off on Monday and have been weak lately, and they have litigation risk, but I'd at least look at them for the long-term. Over time they should do well.

American Express, however, is way off my list of potential investment ideas. Not even going near this one. Name a timeframe (e.g. year-to-date, one-year, five-year, etc.), and you'll find that the stock is down. The economy is going to have to turn sharply before I even remotely consider it.

Disclosure: I don't own any company mentioned; positions can change at any time.

The U.S. Federal Reserve announced Tuesday an expansion of its securities lending program.

The actions announced today supplement the measures announced by the Federal Reserve on Friday to boost the size of the Term Auction Facility to $100 billion and to undertake a series of term repurchase transactions that will cumulate to $100 billion.

The Fed added that "since the coordinated actions taken in December 2007, the G-10 central banks have continued to work together closely and to consult regularly on liquidity pressures in funding markets. Pressures in some of these markets have recently increased again." The Fed added that central banks "will all continue to work together and will take appropriate steps to address those liquidity pressures."

"To that end," the Fed said, "today the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are also announcing specific measures."

Fed Analysis: Without question, the Fed is attempting to head-off any building, short-term liquidity crunch banks may face in the weeks and months ahead. This latest increase in the Term Auction Facility, the coordination with the other major central banks indicates monetary, and lengthening of the primary dealers' term to 28 days from overnight will help the Fed and the other central banks achieve that liquidity goal.

The management at American Express (NYSE: AXP) must have hoped that its relatively high-end card holders might dodge much of the economic slowdown. It was not to be. According to The Wall Street Journal, "the card company said yesterday that it would take a $440 million pretax charge against fourth-quarter earnings as it sets aside more money to cover soured loans." The news and a warning from Capital One (NYSE: COF) showed that credit problems have moved beyond the mortgage market and into consumer credit.

American Express described its problems as "broad-based and sudden." So, part of the financial industry says the consumer pulled in very sharply in December, a sign that GDP may have already begun shrinking at the end of last year.

The consumer was the economy's last, best hope. He was needed to drive revenue in the retail and consumer goods markets. It appears now that his hibernation has begun in earnest.

Douglas A. McIntyre is an editor at 247wallst.com.

The nation's fourth largest brokerage firm, Lehman Brothers (NYSE: LEH), reported its August 31st quarterly results this morning. Investors began to breathe a sigh of relief as the numbers beat Street's expectations posting $1.54 earnings per share versus the expected $1.43 EPS. Earnings were 3% lower from last year's results, which were accomplished in an accelerating environment.

Lehman Brothers acknowledged a $700 million hit from "substantial value reductions" in mortgage-backed securities. The investment banking and retail brokerage fees were up 3.1% for the quarter and total revenues were $4.3 billion. Lehman Brothers stated that 53% of its revenue totals came from overseas activities, helping to absorb mortgage-backed securities losses.

Lehman Brothers, once known as a pure trading house, has diversified its revenue stream substantially. Coupled with more than 50% of its revenues coming from international sources, the giant firm has shown it can weather the credit-storm.

The stock is up over 4% today on the relief factor. The next few days will see Bear Stearns (NYSE: BSC), Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS) report their August results as well. If Lehman Brothers is any indication, investors may again feel these stocks have come down too much and begin nibbling away on the buy side. The only remaining significant issue is the credit markets and if they have indeed calmed down. If so, the leverage in the business model of the major four firms could begin to re-accelerate earnings in 2008.

Georges Yared is the CIO of Yared Investment Research and the author of Baby Boomer Investing...Where do we go from here?

The minutes of the Federal Reserve Open Market Committee (FOMC) were released this afternoon and judging by the 130 point plunge that followed, some investors were disappointed with the Fed.

AP reported that investors were hoping for stronger signs that the Fed would cut its Fed Funds rate when it next meets on September 18th. Although the Fed fretted about the slowing housing market and tightening credit markets, which would lead one to believe that the Fed might be willing to cut rates, investors were expecting a more definite statement. However, the Fed continued to identify inflation as the biggest risk for the economy -- implying that it would hold rates steady to keep inflation from getting further out of control.

While it would be nice to think that something so simple drives stock prices up and down, it's really much simpler and much more difficult to explain their movement. The reasons that big investors buy and sell stocks are simply not disclosed to investors. So the media just takes a quote from a market expert without really knowing what caused prices to move.

Meanwhile, the average Dow stock lost 2.1% of its value today. And the reason might be that the Fed is not eager to bail out those who borrowed too much money and now can't pay it back.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.