Indonesia announced foreign exchange controls last week, triggering the first round of restrictions or limits on foreign currency trading. Other nations are sure to follow as economic growth falls off a cliff this quarter compounded by plunging exports.

As the global financial crisis deepens and spreads to the real economy, more countries will resort to protectionist policies in the emerging markets, eventually imposing semi or hard foreign exchange controls.

LIBOR rates are well below their clogged levels four weeks ago and U.S. corporate bond issuance in October witnessed a strong rally following a drubbing in September. Credit markets are definitely regaining much needed traction and investors should be encouraged by narrowing credit spreads.

Probably one of the craziest suppositions now is to project a 100% gain for U.S. stocks over the next few years. After all, everyone, and I mean everyone is suffering big losses in the market this year and nobody truly believes equities will start a bull market any time soon.

Stocks can muster a convincing bear market rally following a crash. This last occurred in the 1930s as the Dow almost doubled between 1933 until 1937.

From their lows earlier this year the grains complex has plunged about 40%, with corn, soybeans, wheat and rice all down hard since mid-July. That’s consistent with the CRB Index, now off more than 40% since hitting an all-time high in early July.

But if the credit crisis finally caught up to commodities in July after six straight years of big gains, then the same credit phenomenon might propel the grains higher eventually. That’s because crop yields are now shrinking again after a harvest boom in 2008; projections for grain harvests in 2009, however, look grim.

The European Central Bank (ECB) and the Bank of England made bold interest rate cuts yesterday with the British cutting rates to their lowest levels since 1955. Despite aggressive interest rate cuts by global central banks over the last 60 days, markets remain on edge and unable to find any semblance of balance.

In the United States, a post-Obama-elect victory on Tuesday failed to carry through into Wednesday’s trading with the Dow dropping 486 points and again on Thrusday, dropping another 443.

Global investors are still reeling from the ongoing and seemingly never-ending losses incurred by Switzerland’s largest bank, Union Bank of Switzerland (UBS). Yet as the Zurich-based bank is chastised by its shareholders and clients, the bank will emerge stronger going forward as it embraces less risk and returns to its core business – banking.