Lowering rates won't help the current situation much if at all. The current problem is a crisis of confidence. That confidence can only be restored if the big financial outfits like Citibank come clean about their exposure to MBS and bad debt. As long as they continue to hide their exposure such as by creating this "super SIV" or whatever they're calling it this week, the problems will just fester and confidence will not return - we'll end up with a stagnant economy like Japan had from the early 90's till about 2004.