The headlines remain mostly gloomy. The economy keeps losing jobs - losing 240,000 jobs in October. Unemployment is up to 6.5% and is probably going higher. Manufacturing is down. Consumer confidence has plunged to the lowest reading in years. Corporate earnings reports tell a tale of a slowing global economy. Surprisingly, most media commentators still have not recognized the most important positive story. The LIBOR rate has come down. The interest rate on 30-year mortgages is coming down. The commercial paper market is functioning again. Total commercial bank credit in the United States is over $10 trillion, a new record high and growing fast. And they don't know why the dollar has been going up instead of down as the media pundits predicted. The dollar is up and very close to my estimate of 1.30 versus the euro.

The turbulence in financial markets is testimony that the U.S. dollar is the biggest financial pillar of the global economy. There is an overlay of speculation but on the fundamentals the U.S. currency is still #1 in international trade. For example, on the Shanghai docks there are containers full of goods ready to be shipped. They sit there because the shipper has not been able to get a letter of credit in U.S. dollars to finance the goods and shipping costs. Dollars are needed because the dollar market is the biggest, most trusted and the most flexible. The Russian central bank has lots of dollars, thanks to oil sales, but Russian commercial banks do not have the dollars they need for financing trade. They have to borrow dollars. It has become difficult to borrow dollars, so the Russian commercial banks have been forced to buy dollars to pay off loans coming due.

I could provide many more examples. But the point is that the shutdown of the U.S. credit market has had the effect of paralyzing much of the world's trade. Banks and businesses all around the globe need to be able to borrow dollars for short term financing. That is why it is so important to get the U.S. credit market functioning in a normal way as fast as possible. And that is why central banks all around the world are working alongside the United States to make sure there is plenty of liquidity. They are making progress. But it is not easy to stop a self-intensifying circle of fear. It takes time for investors and business managers to realize that their worst case fears are not going to happen. We are now in the aftermath of the credit crisis. We are seeing the damage done when credit markets froze - and that is indeed scary.

Here at the DC Money Show, a lot of people are saying that this is the worst financial market they have ever seen. I can't say that. I believe the 1970s and early 1980s were much worse. The Dow Jones Industrial Average hit bottom in 1974 and eight years later we had the worst recession since the Great Depression, lurching from 18% inflation to 11% unemployment and a 21.5% Prime Rate. Today's economic slowdown and financial market convulsion feels bad because it has exposed just how fragile financial markets really are. Markets depend on confidence. We used to think the global financial were so large and so complicated that they were invulnerable. Now we know otherwise. But this is a financial crisis and it will be fixed by making sure there is plenty of money in the system to satisfy legitimate business needs. The billions in China and India are not going to retreat. They are going to march forward working hard to improve their standards of living. They are a major source of global growth. Business managers know that and will continue to pursue opportunities in emerging markets. Be patient and stay fully invested.

For instance, Disney (NYSE: DIS, $24.00) reported fourth quarter earnings from operations at $0.43 a share up slightly from $0.42 a year ago. But Disney is feeling the pinch from gloomy consumers. Attendance at the theme parks is down about 1%. Earnings for the fiscal year that just ended were $2.28 a share. Earnings this year may be flat or even slightly down. Still, at just 10 times earnings, Disney is very attractive. The long-term average P/E is 18. Disney will come through the slowdown in better shape than many other companies. Disney is a Buy.