Since you asked, I am convinced that the Fed’s rate cuts, bold as they are, will help but are far from a solution.

The two big issues are credit markets and a falling housing market. Housing in the U.S. has further to fall on a valuation basis, and is taking on a downward momentum just as it did on the way up.

And credit markets won’t be fixed by interest rate cuts; it will require clarity about losses, rebuilding of balance sheets and the passage of time.

One thing that will help is the plan to raise the limit of loan’s that Fannie Mae and Freddie Mac can make by $300,000. With secondary markets for loans not issued by Fannie and Freddie more or less closed, the interest rate cuts were not going to be of much use to a homebuyer in California needing a $600,000 loan. I spoke to Yale economist Robert Shiller, the man behind the Case-Shiller indices of house prices, here at Davos. His take was that it would help, but that housing still faced big falls that might take “years” to resolve.