The United States’ Federal Reserve has intervened dramatically to cut base rates by a huge 75 basis points or 0.75 percent, indicating that it regards recession as more likely than not. This is the single biggest cut by the Fed in 20 years.

The markets are less than impressed, however, regarding it as a panic measure. The White House has also weighed in with the President saying he is considering an even bigger fiscal stimulus than the recently announced $150billion.

America means business.

Syntagma has an in-depth analysis of the upcoming recession. Here’s a taster :

As we’ve been saying here in Syntagma for some months, a long, deep worldwide recession now looks more likely than not. Opinions are hardening among key players, principally in America and Britain.

Yesterday, the Wall Street Journal proclaimed : “U.S. warning signs point toward deep recession”.

Now even the insurance companies, or Monolines, that underwrite possible defaults, are also in trouble, with two of the biggest in the U.S. said to be close to Chapter 11 status (a form of bankruptcy protection against creditors).

Once again the housing market is in the financial news as it threatens to disrupt the rest of the American economy.

US Treasury Secretary Hank Paulson issued the warning following a two-day meeting of the G20 — the world’s 20 most industrialized economies.

Paulson said there would be continuing volatility in financial market because the sub-prime mortgage crisis is still unfolding. He insisted, however, that the US economy remains “healthy and diversified” and will continue to grow.

The G20 finance ministers agreed there was too much volatility in currency values — a dig at the precipitate fall in the dollar — but fell short of criticizing the weakness of the greenback.

This story will run and run.