``Interest-rate cuts will be of little help in the near term because the issue is trust, not rates,'' said Cezar Bayonito, a liquidity trader at Allied Banking Corp. in Makati, Philippines. ``The liquidity squeeze is still out there.''

Overnight dollar borrowing costs in London soared for a third day yesterday before the Federal Reserve, the European Central Bank, Bank of England, Bank of Canada and Sweden's Riksbank each reduced their benchmark rates half a percentage point in an unprecedented coordinated move. The Bank of Japan, which didn't participate, said it supported the action.

It doesn't matter, though - Equity markets have traders that act dumb... Asian Stocks Gain, Snapping Five-Day Slump After Global Interest-Rate Cuts

After all, it's not like there are global issues to worry about... Kaupthing, Iceland's Biggest Bank, Seized by Nation's Financial Regulator

Iceland's Financial Supervisory Authority will take control of Kaupthing Bank hf, the nation's biggest bank and the third lender to be seized by the government since the financial crisis escalated.

Kaupthing's domestic deposits are fully guaranteed, and the aim of the takeover is to provide a ``functioning domestic banking system,'' the FSA said in a statement on its Web site today.

Iceland's banking system has buckled under the weight of debts equal to 12 times the size of the economy, with financial regulators already in charge of the second and third largest lenders, Glitnir Bank hf and Landsbanki Islands hf. Prime Minster Geir Haarde indicated yesterday he may be forced to seek aid from the International Monetary Fund after failing to secure loans from European governments and central banks.

The central bank yesterday abandoned an attempt to fix the exchange rate, indicating it is powerless to halt the slump in the krona. Iceland will start talks with Russia on Tuesday to secure a loan of as much as 4 billion euros ($5.46 billion), Haarde said yesterday.

Iceland's oversized bank industry put it ``probably in the worst position in the developed world to cope with the ongoing credit crisis,'' Deutsche Bank AB economist Henrik Gullberg said on Oct. 7.

But wait, there's more in the news today:

•Libor Holds Central Banks Hostage as London Rate Freezes Worldwide Lending

•Fear Trumps Greed as Market Worries Amplify News, Paralyze World Economy

Stocks, U.S. Futures Rise as IBM Confirms Forecast; Cap Gemini, Dexia Gain

•U.K. May Own as Much as 30% of Four Biggest Banks, Bernstein Analysts Say
•Paulson Signals U.S. May Invest in Lenders as Part of $700 Billion Rescue

•Iceland's Krona Currency Trading Grinds to a Halt as Kaupthing Taken Over

•Bernanke, Paulson Seek Global Help as Credit Crisis Defeats U.S. Efforts

•AIG May Tap $37.8 Billion from Federal Reserve, Following $85 Billion Loan

•House Prices in U.K. Fall Most in 25 Years as Banks Cut Lending, HBOS Says

I got kids to feed...