The Federal Reserve's overnight rate that was reduced to 2.25% just yesterday, and sent the Dow flying 420 points into posititve territory, gave a good chunk back today. The DJIA falling 293 points to 12,099.66 means that Bernanke's magic bullets were a very short-term fix to what ails us.

Not even some positive earnings reports and falling oil prices could sustain the markets run-up. The following stories were posted by my colleagues:

• Morgan Stanley joins Goldman Sachs in helping quell bank panic
• General Mills (GIS) quarterly profit surges 61% on strong sales
• Oil extends its pullback following today's inventory report

This has to be very discouraging to the folks in Washington DC, and on Wall Street. There is no telling what tomorrow will bring but you can only cut so far before there is nothing left to cut, and you also have a dollar that won't buy much.

But one day is meaningless in the grand scheme of things, and reduced interest rates and increased stability in the financial sector has historically given way to a stronger stock market six months out. After all, that's when the presidential elections will take place and those are the high stakes games to keep your eyes on. For that reason, I expect still another rate reduction before too long so that there is time for it to take effect.

Sheldon Liber is the CEO of a small private investment company and the design and research principal for an architecture and planning firm. He writes Chasing Value and Serious Money columns.

Dow down 293: Bernanke's magic bullet did not last 24 hours originally appeared on BloggingStocks on Wed, 19 Mar 2008 17:22:00 EST. Please see our terms for use of feeds.