Well, the Fed held rates steady, and it appears from their statement that they will hold rates steady.

Honestly, I don’t expect any rate change now before the election. Changing the rates in September or October would lead to complaints of a political agenda.

The Index of Supply Management’s index of non- manufacturing businesses showed continuing contraction in July.

It was up to 49.5, which was above forecast, but anything under 50 is contraction.

For what it’s worth, it looks like Noriel Roubin’s prediction that hundreds of banks will fail as a result of the credit crunch is finally getting some ink at a major news service (Reuters).

I would suggest his blog to get more detail, particularly on his estimate that the Taxpayer will be on the hook for $1-$2 trillion for all this.

Both he, and I, think that the credit crunch will get a lot worse, and stories like former Merrill Lynch superstar Dow Kim shutting down his hedge fund before it started, because investors got skittish and pulled out, would seem to confirm this.

I would also note that delinquent loans are rising for commercial real estate, which indicates that the commercial real estate market is following the residential market down the drain.

In the normal indices, we see the dollar up a bit, and oil and gasoline down for another day.

Thursday, when the Euro Central Bank sets its rates, should be interesting.