It was yet another day of choppy trading in the credit markets with the lack of liquidity sending spreads tighter, wider, and then tighter again.

As predicted, the market chose to ignore the Moody's headline that the rating agency might downgrade U.S. sovereign debt.

In this market, it is not prudent to bet against the credit-worthiness of the U.S. government.

One should not be surprised if the Moody's statement was tacitly encouraged by the Obama administration to bolster its bargaining position vis-à-vis Congress regarding the debt ceiling.

President Obama has proven himself to be a brilliant tactician in the debt ceiling debate.

With an election year coming up, the public perception is ultimately what matters and so far President Obama is winning on that count.

Taking a step back and looking at the picture philosophically, a U.S. default, as unrealistic as that scenario actually is, may not be such a bad thing for the long-term fiscal health of the world's largest economy.

As we have discussed before, however, a default is simply not going to happen.

Inflation's newest best friend Federal Reserve Chairman Ben Bernanke continues to hint at further bouts of loose monetary policy.

When the markets take another leg lower (as they surely will) as Europe's sovereign woes escalate (not to mention the potential for a China blow-up or a new conflict in the Middle East), Chairman Bernanke will use sell-off as his cue to open the spigots and start printing more money.

Broker / dealer JP Morgan's earnings announcement beat expectations but when players drill down into the actual numbers, it is apparent that the reserve releases can only go on for so long.

It is clear that the financial industry will be entering a soft patch for the foreseeable future with banks less profitable and looking to cut costs as they lay employees off.

Will the soft patch for the financial industry last forever?

Most probably not; anyone with some historical perspective will reiterate the cyclical nature of the industry.

Google earnings came out and beat expectations; the outlook for Google is bright as the company looks to move further into the mobile software and device space.

Rupert Murdoch's woes continue to mount with an investigation by the FBI (Federal Bureau of Investigation) the latest on tap.

Murdoch overreached and crossed the Leviathan; his business empire will pay the price.

Saudi Prince Waleed bin Talal, one of News Corporation's largest shareholders, will likely backtrack in the near future despite voicing early public support for Murdoch.

Earning Washington's ire is not on anyone's wish list.

Citibank earnings are out on Friday.