The Bank of England cut the bank rate by a full point to 1% as conditions continue to deteriorate. England and the U.S. are both reportedly discussing plans to take direct action in the mortgage market. The U.S. may be making plans to jam some rates down to 4.5%. The U.K. is looking at ways to defer some mortgage payments for troubled borrowers.
Homeowners aside, what is going on with the financial engineering at the Federal government level highlights the fact that the countries of the Euro zone could be screwed.
The Euro can cut rates, and have been, but they have no central bank and so can't get involved in shoring up the credit markets with any mechanism other than money supply and short term rates.
Economics and Finance textbooks everywhere are being rewritten as I write this. It's probably too soon, though.