In what is sure to blow Barney Frank's lid wide open, Moody's (never one too far behind competitor S&P, except when it comes to TALF ratings) announced earlier it was preparing a major, multi-notch rating downgrade of the state if it does not produce a budget any time soon.

Well, the "for broke" part is hopefully a pun. But based on their most recent holdings, which among others include 104% of the IYR Real Estate ETF, Credit Suisse is certainly ploying something here (one hopes, or else that is one big fat finger).

In yet another splinter approach from the route espoused by Bernanke, the Dallas Fed shares its thoughts on limiting irresponsible lending. The Fed's solution is the imposition of loan-to-value caps which would make a lot of sense, but would substantially curb loan demand - a course of action that the Federal Reserve would fight tooth and nail against in its attempt to deflate debt by a new wave of excess (and even more irresponsible as it would be taxpayer backstopped) lending.

• US Leading Indicators, Factory gauge climb in evidence slump is easing.
• New York City’s unemployment rate climbs to 9%; 361,000 are jobless, highest since '93.
• Air France-KLM may need to cut a further 3,000 jobs says CEO.
• Apple Inc. shares have climbed 59 percent since Jobs take on leave.
• Dongfeng Motor., China’s third-largest automaker, will partner with Detroit Electric Holdings.
• GE objects bank separation plan but favors broad regulator.
• Abraxas Petroleum and Abraxas Energy Partners, L.P. announce merger intention.

So which will it be Bernanke: 401(k) down only 50% form their peak or people buying that 7th vacation home again.