When the Treasury Secretary and members of the Federal Reserve are publicly working on a Sunday, something’s up.

Euro and Asian markets rallied today after the Treasury Department and Federal Reserve stepped in on Sunday with offers of bigger credit lines and direct access to central bank coffers should Freddie Mac (NYSE:FRE) and its sister agency Fannie Mae (NYSE:FNMN) run into deeper financial trouble than they have experienced in the last two weeks.

Today's $3 billion debt sale from Freddie drew stronger attention than a similar one on July 7. Fannie announced that it will sell $3 billion worth of debt on Wednesday. Fannie and Freddie own or guarantee $5 trillion of debt, close to half the value of all U.S. mortgages. Foreign central banks, mostly in Asia, hold $979 billion of the bonds and mortgage-backed bonds sold by the agencies.

What a month on the street... Oil set a record bypassing $147 a barrel (on concerns about Iran. I mean c’mon, really, what’s Iran gonna’ do?). Freddie Mac and Fannie Mae shares dropped again as rumors about bailing them out began to circulate and speaking of rumors, there’s one going around that the Fed might lift interest rates a quarter a point to curb inflation and that has the whole mortgage industry tightening up loans and potential buyers making themselves at home on the sidelines.

Do I think we’re at a bottom? No. Not just now. There’s a whole lot of re-tooling and re-thinking and re-doing of business models to get things headed in the other direction. Also, all the overvalued stocks and now beginning to come into line with real or actual values and that is a plus during recessionary times. That and affordability. Now is a good time to buy as I’ve said for the last couple of months.

As the airline, auto and financial sectors sag and keep losing value, there are a few sectors that, year-to-date, are holding up rather well. Energy of course, propelling the profits of oil companies like Exxon Mobil (NYSE:XOM) and the Tech sector, though diminished, is still ahead for the year. With companies like Apple (NASDAQ:AAPL) still rolling out products, Tech is holding its own all things considered. So too is the Steel Industry and its varied sectors and components.

Apple Inc., (NASDAQ:AAPL) projected fourth-quarter earnings below Wall Street targets despite a better-than-expected third-quarter profit on brisk sales of its Macintosh personal computers. Apple shares closed down ten+ percent in brisk after hours trading.

That kind of news won’t push the DOW up; as industrials have been feeding off Tech stocks of late. The 12,000 point DOW threshold now seems a long way off (the average closing on Monday was at 11,467).

So while the indices are sorting things out and analysts earnings (never one of my favorite benchmarks) are up and down and all over the place, I thought I’d bring DR’s (Depositary Receipts) to your attention.

The Bank of New York Mellon (the world’s leading depositary bank) (NYSE:BK) issued a mid-year report on DR’s late last week and said that more than $2.4 trillion of DR’s traded on U.S. and non-U.S. markets in the first half of 2008, up 85 % year-over-year.

Consumer spending accounts for more than two-thirds of U.S. economic activity. If you think of the prevailing sentiments of people; their sell-side monetary attitudes, their ‘fear’ of ‘the pump,’ their concerns over their household finances, the U.S. engine is chugging along slower and slower up the hill to recovery.

Monday’s market was volatile to say the least. Why go to an amusement park when you can just watch the DOW daily trading charts. Today it was the financial sector that provided the gravity ‘dips.’

Growing concerns about Fannie Mae and Freddie Mac and San Francisco Federal Reserve President Janet Yellen saying in a speech the financial markets remained fragile, and that it will take time for conditions to improve didn’t help. "My expectation is that market functioning will improve markedly by 2009," she said. "But things could get worse before they get better."

Well, Sentinel called it. Yesterday, my blog entry was entitled, A Bear Market? Well, today I dropped the question mark. Yesterday we were all teetering on the edge of a ‘technical’ bear, but after yesterday’s numbers –and a drop of some the indices by 20 percent in the last six months- we’re in one.

But like I said yesterday, it isn’t a grown bear, but a cub. Today was a short trading day because the holiday, but the icing was put on the cake. The first time oil ever settled at $145 a barrel, GM stock (NYSE:GM) dipping below $10 a share since 1954 and six straight months of job losses (including June).

Also like I said, this is a great time to look at undervalued sectors, individual companies within those sectors, and buy. Stocks won’t be this cheap next year. Perhaps Monday isn’t the day to buy (unless you follow the tick), but I believe the world is re-tooling as it were and the bear cub will never fully mature.