Well, the idea the economies have decoupled is once more giving the lie by the India central bank cutting its interest rate by 50 basis points, the Australia central bank cut its benchmark interest rate by 75 basis points, and South Korea announcing an $11 billion stimulus package.

Of course, those are just the official actions, on the level of the financial markets, we have a number of German property funds freezing redemptions, and because they are heavily into UK real estate, “German funds have been among the most active in snapping up City of London and West End properties this year,” this does not bode well for either the UK or German financial systems.

When we finally get to the United states, we have Institute for Supply Management’s its manufacturing index falling to 38.9 in from 43.5 last month, the lowest reading since . It was the lowest reading since September 1982.

Additionally, construction spending in September fell 0.3%, which is better than the 0.8% expected, but Lehman’s collapse probably came late enough not to move that number much.

The October construction number will be positively grim, because it runs on credit, which is still nearly non-existent.

Speaking of credit, it appears that the LIBOR and other interest rates are down, indicating some loosening of credit. (see also here)

On the other hand it appears that while banks are slightly less reticent to lend to each other, they are still tightening lending to everyone else, according to a Fed survey of lending practices.

I don’t blame them, after all Iceland Bank Swaps are losing 97¢ on the dollar.

All this news has pushed oil prices lower, which is no surprise.