From all accounts of news we are seeing cross the wires tonight the credit situation is still worsening. Confidence is quickly deteriorating in not only the US markets, but global markets as well.

Europe is scrambling to prevent bank runs by issuing statements that the bank deposits will be guaranteed by the Government. This following the apparent failure of two large European companies this weekend; Fortis & Hypo Real Estate Holding AG. See this Bloomberg article.

The S&P 500 futures are currently down more than 20 points at the time of this writing. The market is ‘not happy’ tonight and the selling continues.

The conditions that exist within the economy and the credit markets continue to worsen, and hence the markets remain under historic levels of stress. We are potentially looking at one of the worst bear markets since the Great Depression, and I don’t say that without weighing all of the current data facing our economy. The economic data that I have reviewed this weekend paints a very bad picture for the United States going forward. In some cases the data has deteriorated even faster than I originally projected just a few months ago, and even back then I was very bearish on the economy and the markets.

The bail out bill will not save the economy nor the markets. Unfortunately the Governments passing of the bail out bill is more likely to make conditions worse, not better. The bailout bill is all about Wall Street, not Main Street as you have been told by Washington,D.C. people.

Tonight we are seeing very large moves in the currency markets as risk aversion tactics are being placed. Asian markets are significantly lower at this time and reports of foreign Governments having to step in and provide emergency support to their currency are crossing the wires.

The markets remain ever so fragile and we can not rule out a massive ’stick save’ by the US Government. Maybe even as soon as Monday morning. This may come in the form of a world wide rate cut by many central banks, another round of global liquidity injection, or perhaps something we have not even seen yet. But the markets are screaming loudly tonight that trouble is still building. Attempts to keep throwing money at the system only makes matters worse in my view. The markets must be the final arbiter in this situation, anything else only makes the situation worse and prolongs the problem.

Wall Street firms and other holders of the ‘toxic paper’ must be forced to recognize their losses, not hide them.