Beware the ides of March.

• Author: Adams, Tucker Hart
• Position: The ECONOMIST

"Beware the Ides of March!" the soothsayer shouted from the crowd not long before Julius Caesar was assassinated. Two thousand years later, it's still a prescient warning.

On March 15, the media reported that:

* The dollar fell to a record low of $1.56 against the euro and dropped below 100 yen for the first time in 13 years.

* Measured by market exchange rates, the euro-zone surpassed the U.S. as the world's largest economy.

* The price of West Texas crude hit $111 a barrel.

* Gold traded above $1,000 an ounce for the first time.

* Gloomy retail sales confirmed for many that the U.S. is in recession.

* Stock markets fell around the world as investors fled to the safety of government bonds.

* Hedge funds moved into survival mode, selling securities in response to pressure from banks to reduce their portfolios.

Perhaps the most troubling March 15 report was Standard & Poor's assurance that the majority of the losses in mortgage-backed securities have been disclosed, with the subprime crisis topping out at $285 billion. Each time someone announces that the problem is contained, something else blows up.

This time it was Bear Stearns, purchased by JP Morgan Chase over the weekend of March 15-16 for $236 million, about $2 a share. On March 14, Bear Stearns shares were trading at $30 a share and, over the last year, have traded as high as $159 a share. Its headquarters building alone is reportedly valued at $1 billion.

The purchase price was later raised to $10 a share when it became apparent that stockholder approval would not be forthcoming at $2. Employees hold 30 percent of Bear Stearns stock.

The Federal Reserve negotiated the Bear Sterns/JP Morgan Chase deal, making the unprecedented move of allowing Morgan to borrow $30 billion against questionable Bear Stearns collateral. This emergency loan program extends to the 20 large primary dealers that execute Fed transactions in the credit markets.

This move says to me that the Fed is worried and uncertain. Lack of central bank action turned a recession in 1930 into the Great Depression, and central banks worldwide are determined not to let that occur again. Since August, the Fed has:

* Lowered the overnight borrowing rate several times, from 5.25 percent in June 2006 to 2.25 percent in mid-March.

* Lowered the discount rate several times, most...