For the markets, it's a 95 percent down day, with 95 percent of the volume going to declining stocks.
We are weak across the board, but financials and commodity stocks are all down notably, as we see too separate plays: 1) attack the weakest financials, and 2) play the "global slowdown trade" by selling energy and material stocks.
What's next? There's several possibilities now that the House has voted down the TARP bill:
1) A revote;
2) New, broader legislation. But if you are against a bailout on ideological grounds, because you believe in total free enterprise, what bill could be crafted that you would vote for? There is none.
3) Do nothing. The problem with doing nothing, and the reason the Street is so unhappy today, is that the lack of a systemic solution means "one bankruptcy at a time" or "one shotgun marriage at a time" (as the FDIC has arranged with WaMu/JP Morgan and Citi/Wachovia).
But if we have learned anything, we have learned that this ad hoc method of dealing with one company at a time hasn't worked.
- Pros: The Disease Is Spreading
- Cramer: Dow Could Drop to 8000
- Fast Money: How Grim is the Future for Financials?
- Trading the Bailout: Buy Best in Banks
- Financials to Buy Now: ETFs and Exchanges
- Wait Until Short-Sale Ban Ends
- Money Market Freeze Needs to Be Fixed
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