The Fed cut its discount rate by 75 basis points, even when the street predicted a 100% chance of a full 100 point cut.

Whats more important though is that Goldman Sachs (GS: chart, web, Y!) and Lehman Brothers (LEH: chart, web, Y!) both reported smaller than expected profit declines, easing fears that the liquidity crisis that sank Bear Stearns (BSC: chart, web, Y!) could spread to other investment banks. While normally I don’t view a “smaller than expected decline” report as overly bullish, I do believe it helps isolate the investment bank crisis to a smaller field.

On top of the report The Street lauded comments from both institution’s about their liquidity positions as well as the absence of any big surprises on leveraged loan or mortgage-related writedowns.

I don’t know that we’re fully out of the water just yet, but I think we’re close. At least for another quarter.

Something to watch tomorrow:

The Visa IPO. They’re offering of 406 million shares at $44 a share, topping the previously estimated range of $37 to $42 a share. Visa shares will trade on the New York Stock Exchange starting Wednesday, under the symbol “V”.

I think it’s telling they’re going forward with the largest IPO ever in todays market condition.

Finance BSC, Fed rate cut, GS, LEH, Visa IPO