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Clearly, inflation targeting has gone out the window for the American central banker who is attempting to resuscitate the world’s largest economy - though there are those who believe it is already in the grips of recession.

Bernanke, in front of the House Financial Services Committee yesterday, said: ‘(We) will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks.’

In layman’s terms this means he will cut borrowing costs if the economy takes a turn for the worse.

Foreign exchange dealers needed little encouragement as the hot money poured out of the greenback looking for other, higher interest currencies.

This meant the euro vaulted above the psychological $1.50 mark for the first time in its nine-year history, before climbing above $1.51.

The Fed has lowered benchmark overnight interest rates to 3% from 5.25% since mid-September and financial markets expect policy-makers to lower them by a further half-percentage point at their next meeting on March 18.

Other stories:
Fed is ready to slash its rates to 2.5%
Sub-prime losses ‘may hit 250bn’ - Bernanke
Fed’s haste on rates may unleash inflation
Monoline insurer fears pushed Fed to act
Fed chief faces grilling on US economy
Oil hits new highs as dollar continues slide
Japan next in the firing line for recession
‘Will the bold US rate cut be enough?’

After 100 Premiership games for both managers, Rafael Benitez finally has a league victory over Chelsea to celebrate, although Jose Mourinho might be the one who ends up remembering this occasion the longest.

Inspecting the wreckage of a title challenge from his technical area in the 77th minute, the Chelsea manager looked up to find all four sides of the ground chanting ‘Bye-bye Mourinho’ and waving in that friendly way Scousers have.

Whether Anfield will have the final say on Mourinho’s future is debatable, but at this rate it will soon be bye-bye Chelsea. An overnight sickness ruled out Ricardo Carvalho on the morning of the match and brought Mourinho’s worst fears into being. For weeks he has been complaining that he has only three centre-backs to choose from and with John Terry and Khalid Boulahrouz injured, suddenly he had none.

With Michael Essien and Paulo Ferreira pressed into service as emergency centre-halves, Liverpool had the match won inside 20 minutes and left Chelsea looking like an ongoing emergency. As the clanking of loose change in Roman Abramovich’s pocket has stopped drowning out all the other noises emanating from Stamford Bridge, Mourinho was left counting his blessings - ‘We are still higher in the table than Liverpool and if United lose to Arsenal [today] I would still be confident’ - and clutching at some extremely wispy straws.

‘Rafa is not stupid and I am not a magician,’ he said. ‘Of course he plays [Peter] Crouch and [Dirk] Kuyt up front because Crouch is too tall for us and Kuyt is too strong. I had been hoping, wishing, we could get through the first quarter without conceding because that would have brought belief and something to build on, but it didn’t happen. You can play in Europe without central defenders, but in the Premiership, where everyone has target men and players who play with their back to goal, it is impossible.’

Mourinho went on to list all the cup competitions Chelsea are still involved in, yet the fact is that if they defend as inexpertly as they did here, they will be out of them very quickly. Essien and Ferreira improved through the game, in fairness, although perhaps it could be argued that Liverpool’s less than deadly attack did not fully expose them. To the consternation of the crowd, Essien actually managed to win most of his one-on-ones with Crouch and there was a feeling until quite late in the game that if Chelsea pulled one back, there might be an interesting finish. ‘We did a fantastic job,’ Benitez said. ‘Maybe we could have scored another goal or two, but everyone played really well.’

Liverpool could easily have had at least one more goal in the first 10 minutes, when Chelsea defenders were still introducing themselves to each other. It was clear how little practice Essien and Ferreira had had as a central defensive partnership when the first long ball came towards them after three minutes and 14 seconds. Jamie Carragher played it, Crouch reached it, Kuyt took advantage of Ferreira’s hesitation to control it in the area and smash a shot past Petr Cech. Three minutes later, poor positioning embarrassed Chelsea again when John Arne Riise collected Xabi Alonso’s through-ball and found himself with only Cech to beat, although this time the goalkeeper beat away the shot in a manner suggesting that he is fully recovered after his four-month absence with a fractured skull.

Recovered or not, there was nothing Cech could do about Liverpool’s second goal. Apart from shout at his defenders, that is. First Steven Gerrard was allowed far too much time to angle in a cross, then, when Essien headed the ball out, everyone stood and admired the way Jermaine Pennant controlled it on his chest, let it bounce, then looped an unstoppable half-volley over Cech and in off the underside of the bar from the corner of the penalty area.

There was no way back for Chelsea after that and their only two first-half efforts of note landed in the Kop. After Frank Lampard had sent a free-kick way over the bar, Didier Drogba fired a first-time shot so high that it hit the Kop roof. And that’s high.

By the time Drogba had squandered a promising free-kick opportunity on the edge of the area after 67 minutes, taking an age to address the ball, then hilariously tapping it to Michael Ballack when he was not looking, Mourinho decided that he might as well send on Andriy Shevchenko. So, in addition to all the other indignities he has suffered this season, the Ukraine and former Milan striker had to put up with Anfield singing: ‘Where were you in Istanbul?’

At least Chelsea got off reasonably lightly in terms of goals. Anfield has seen a few in the past couple of weeks and despite Crouch’s shortcomings as a striker, Liverpool could easily have made Benitez’s day with a couple more in the second half. Kuyt volleyed narrowly over at the end, although it was Riise’s astonishing effort on the hour that so nearly made the day memorable.

With hardly any warning, from more than 40 yards, Riise unleashed a shot that Cech barely saw until it crashed against his bar. Two inches lower and it would have been goal of the season. As it was, when the rebound finally came down, Crouch scuffed it. From the sublime to the ridiculous in next to no time. Chelsea know exactly how that feels.

Despite being the butt of a thousand jokes, Milton Keynes is about to have its moment in the sun. It’s been a long time coming. As it celebrates the 40th anniversary of its designation as a “New Town”, the Queen and Duke of Edinburgh are joining in with the celebrations. On 29 November, they’ll be opening a new football stadium, no less. But has it ever moved beyond the sniping about concrete cows? Can this boom town look to the future, rather than back over a chequered past?

Milton Keynes was a huge social experiment where existing villages, forward-thinking town-planning, uncompromising architecture and a need to generate thousands of new homes all collided next to the M1 in Buckinghamshire. With no obvious good solution to the current housing crisis, it would be nice to think that housing solutions from the previous generation worked out alright in the end.

The site was chosen because it is equidistant from London, Birmingham, Leicester, Oxford and Cambridge. There were hopes that it would become a self-sustaining regional centre in its own right.

But the results have been mixed. The Modernist approach of its grid system and Garden City districts appears far-sighted 40 years down the line. But what the English want and what they need from their housing has often rubbed against many architectural grand plans, causing Milton Keynes to be labelled soulless, suburban and boring by its detractors.

The older villages of Stony Stratford, Wolverton and Bradwell, which merge with the edges of the new town, still prove popular today. They offer the traditional high street, local pub, a few shops and the hotch-potch of period styles you’d expect to see anywhere else in the country, and this familiar set-up seems to command higher property prices than those within the centre of Milton Keynes.

Such architectural big guns as Lord Foster and Ralph Erskine have contributed to Milton Keynes’s development over the years, resulting in some hidden gems amongst the sprawl, but parts of the new town have fallen into neglect, tarnishing the original vision of a bright, new environment. Areas near the centre, such as Conniburrow and Fishermead, haven’t fared well and the prefabs in Netherfield, which were originally intended as temporary housing for the builders, have become very shabby.

There’s hope that regeneration is not far away in these areas and it seems that England’s largest new town is set to carry on growing. Brownfield sites such as Broughton are expanding as part of the Government’s housing initiative, with eco-conscious homes keeping alive the innovative spirit of 40 years ago. Close to Fishermead is The Hub:MK, a central development that has high hopes for raising excitement levels in an area desperately in need of a boost. A cosmopolitan Central Piazza will blur the boundaries between work and play, and provide shops, restaurants and a business centre, as well as swish apartments for those wishing to live in the thick of it without breaking the bank.

Some of the original 1960s properties have held their appeal – the Oldbrook area being one – but it’s the new-builds that are selling fast. Buyers are attracted by the shops opening on new estates and an improving nightlife, and the easy commutes to Birmingham and London (59 and 37 minutes respectively by train). With so many new developments around, there’s something for everyone from the eco-homes of Oxley Park to the Prince of Wales-backed Upton One site where uPVC windows are banned and insulation is made from lambswool.

It’s been 15 years since the Queen last visited Milton Keynes and she’ll certainly notice a difference. Residents love Milton Keynes – its convenience, facilities, affordability and constant desire to improve means this town is mutating once again, dragging the old towards the new just as it did 40 years ago. Controversial it still is, boring and predictable it isn’t.

What you can buy

Town Centre

Price from: 169,950

The Hub:MK is a dynamic development of offices, hotels, shops, cafйs, bars, restaurants and apartments right in the heart of Milton Keynes. One- and two-bedroom pads are on current release injecting style and affordability within striking distance of the station.

Crest Nicholson (0870 084 3482; www.thehubcmk.co.uk)

Broughton

Price from: 196,400 to 550,500

These futuristic, innovative and eco-friendly houses are currently being built in tranquil parkland by Paul Newman Homes. From one-bedroom flats to six-bedroom houses, the glass and cedar-wood elevations, along with fully fitted kitchens, offer great style and value, as well as easy links to the nearby M1.

Paul Newman Homes (01908 696 984; www.paulnewmannewhomes.co.uk)

Bradwell

Price: 699,995

This detached Victorian house is steeped in character and history. There are five bedrooms, three receptions and a family kitchen, as well as good sized gardens. Bradwell is a pretty village less than two miles from central Milton Keynes, making it the perfect bolthole.

O’Riordan Bond (01908 325 707; www.oriordanbond.co.uk)

Passenham

Price: 1,250,000

This 17th-century listed house is a few miles outside Stony Stratford to the west of Milton Keynes. Vaulted ceilings, stone floors and working shutters feature in the five bedrooms, three receptions and two bathrooms, while outside there’s half an acre with extra living space in a detached annexe.

Knight Frank (01865 790 077; www.knightfrank.co.uk)

Interesting? Click here to explore further

For decades, corporate America has been hoping that Fidel Castro’s departure would bring an end to the trade embargo, opening the country to U.S. investment.

Almost six months after the Cuban leader stepped aside, temporarily handing over the reins to his brother, there are no signs of a transition to democracy or a market economy. But a tiny closed-end mutual fund run out of Miami is already cashing in. The $14 million Herzfeld Caribbean Basin Fund (CUBA) invests at least 80% of its assets in companies that derive substantial revenue from operations in the Caribbean region.

“We are invested in companies that are doing well now, that will continue to do well, and will get significant new business if the embargo is lifted,” says Thomas J. Herzfeld, president and chairman of the fund’s eponymous adviser.

The Caribbean Basin Fund’s share price has more than doubled since Castro fell ill this summer. Over the 12 months ended Jan. 18, it has returned 135%, making it the highest-returning closed-end fund over the past year, according to the Closed End Fund Association.

The fund is not exactly a pure play on Cuba, since the embargo prevents any U.S. company from investing directly in the island nation. But Herzfeld says each of the companies it’s invested in has the potential to significantly increase its business if the embargo is lifted.

For example, Florida East Coast Industries (FLA) , the fund’s largest holding at 18.73% of assets, operates 351 miles of freight railroad between Jacksonville and Miami. Herzfeld believes that a large portion of the U.S. freight that would make its way to Cuba if the embargo is lifted would have to use those rails.

Of course, trains can’t cross the Straits of Florida, which is where Seaboard (SEB) , the fourth-largest holding at 6.61% of assets, comes in. It operates the largest fleet of container ships in the Caribbean.

Herzfeld also believes an end to the embargo would be a boon for cruise ship operators like Royal Caribbean (RCL) and Carnival (CCL) , which represent 4.8% and 4.31% of assets, respectively. He says they generate about 50% of their revenue from the Caribbean, and he believes Caribbean receipts would double after the embargo ends.

Herzfeld’s strategy involves more than just economic analysis, however; he also employs political savvy. “We are looking at which areas we should invest in and seek out Cuban-American leaders in those industries and try to negotiate joint ventures,” he says. The fund manager anticipates that these leaders will be instrumental in rebuilding Cuba. He points out that Florida East Coast Chairman and Chief Executive Adolfo Henriques is a prominent Cuban exile who was named one of the 12 most powerful people in Miami by The Miami Herald.

Investors who want to buy the Caribbean Basin Fund now will have to pay up, however. Its shares are currently trading at a 102% premium to their net asset value.

Unlike open-end mutual funds, which issue and redeem shares once a day at their net asset value, closed-end funds issue a fixed number of shares that trade throughout the day on an exchange. So their prices can rise and fall independently of the value of their holdings.

Anyone who invests in the Caribbean Basin Fund now runs the risk that the shares’ premium to net asset value may have fallen — or even swung to a loss — when they are ready to sell.

In fact, just 12.56% of the fund’s return over the past year has come from an increase in its net asset value. The remainder is attributable to the rise in its share price, which spent the first half of last year at a discount to NAV.

That’s an important consideration, given the likely pace of change in Cuba. So far, the transfer of power “has been notably smooth and stable,” writes Julia Sweig in the January/February 2007 issue of Foreign Affairs magazine. “Cubans have not revolted … not one violent episode in Cuban streets, and no massive exodus of refugees. Within Cuba, whether Fidel himself survives for weeks, months, or years is now in many ways beside the point.”

But this doesn’t deter Herzfeld. “No one should believe, nor do we, that the embargo would be lifted immediately,” he acknowledges. “And it should only be lifted if the Cuban government takes steps to restore democracy, freedom and capitalism. That said, however, the single most important development toward that would be the death of Fidel.”

Managers of top-performing stock funds the past six months have been easing into tech stocks as of their latest reporting periods. The funds benefited as tech stocks helped lead the rally that started in mid-August.

Leading managers have been adding Research In Motion, () Nvidia, () Apple () and MEMC Electronics Material. () Tech stocks got battered during August’s sell-off, but techs often stage a rally during the fourth quarter.

Oil-related issues National Oilwell Varco () and Schlumberger () were also favorites among leading funds.

Crude oil prices have been rallying the past few weeks, rising to $75 a barrel, just 4% off from its 52-week high of 78.77.

IBD found 34 best-performing funds loading up on Research In Motion. They invested an estimated $461 million. Janus Adviser Forty Fund added shares in its latest reporting periods.

The firm makes and markets wireless solutions for mobile communications market. Its best seller is the BlackBerry, a handheld phone that provides users with a wireless extension of their work and personal and e-mail accounts as well as Web access.

The stock broke out of a tight 6-month consolidation in early May and continued to climb higher. Research In Motion dipped under its 50-day moving average on Aug. 16, but rebounded back quickly to notch new highs on above-average volume.

Earnings growth has accelerated the past four quarters, rising from 14% to 25%, 57% and 63%.

Revenue growth also was in the double digits. Analysts see net rising 77% in the fiscal year ending in February.

Though the stock continues to trek north, some analysts are concerned an economic slowdown can hurt Research In Motion since many of its customers are corporations.

The growing sales of Apple’s new iPhone this holiday season can also eat into Research In Motion’s sales.

Sell Side

The country’s best-performing funds have been axing Target. () There were 11 net-selling funds as of their latest reporting periods. Two American funds, Growth Fund of America and Washington Mutual, owned shares.

The Minneapolis-based firm operates large general merchandise discount stores. As of Feb. 3, Target ran a total of 1,488 locations. It also runs its own company credit card operation as well as its online business, Target.com.

After reaching an intraday high of 70.75 on July 13, the stock had some volatile swings for much of July and August. It’s now 12% off its high, having fallen back below its 10-week moving average line.

Target notched solid earnings increases the past four quarters, but growth is expected to slow.