Federal Reserve Chairman Ben Bernanke announced a new rule book will be written for the financial world, in an effort to keep this financial crisis from repeating itself, and to protect markets and exchange traded funds (ETF) in the long run.

“We must have a strategy that regulates the financial system as a whole … not just its individual components,” Bernanke said in a speech to the Council on Foreign Relations. Jeannine Aversa for the Associated Press reports that he also stressed the need for regulators to make sure financial companies have a sufficient capital cushion against potential losses.

Meanwhile, Rep. Barney Frank said he expected the SEC’s uptick rule to be restored in about a month. The rule only allowed stocks to be sold short when the last sale price was higher than the previous price. It had been repealed in 2007.

Citigroup (C) had great news for Wall Street which led to a large stock rally. Citigroup Inc. said it had operated at a profit during the first two months of the year; all the major indexes soared more than 4.5%, and the Dow Jones Industrial Average shot up more than 300 points, reports Sara Lepro for the Associated Press.

This is great news among a stream of bad news, however, analysts do not dare say the markets are at a turning point.

• Direxion Financial Bull 3X Shares (FAS): down 90.2% over 3 months, but it’s trading more than 30% higher at midday today

The International Monetary Fund warned on Tuesday that the world economy will likely contract this year in a “Great Recession”. Growth will slow to zero or below this year, and African leaders are woeful this will undo hard-won social-economic gains.

Lesley Wroughton and George Obulutsa for Yahoo Finance report that IMF Managing Director Dominique Strauss-Kahn said in a speech that deleveraging by financial institutions and a collapse in consumer and business confidence is depressing domestic demand across the globe.

Companies are shoring up and cutting production in an effort to reduce inventory to cope with the recession. The Associated Press reports that wholesale inventories fell 0.7% in January, which was slightly smaller than the 1% fall economists had expected.

This is the fifth month in a row that businesses have cut inventory and sales at the wholesale level dropped 2.9% in January, the seventh consecutive decline.

Tags: Dow Jones Industrial Average, FAS, Financial, Long-Short ETFs, Retail, Sector ETFs