The worst news is not the falling Dow but the increasing Libor rates and frozen lending in the market. Lending is stuck and we're probably not that far away from a new rescue plan that will probably involve the government pumping money directly into the banks as has been suggested by Stiglitz and other economists. The Australians delivered a surprise rate cut today and now Europe and the US are looking at similar action. We're lucky that inflation is lower due to oil prices dropping and a strengthening dollar, though a rate cut alone isn't likely to change the dynamics of this market. If you're looking for some good news, this is about all I can find today, outside of the dollar:
The Dow Jones Industrial Average lost 508.39, or 5.1 percent, to close at 9447.11, capping the blue-chip index's worst five-day point loss ever. The index has shed more than 1,400 points, or nearly 13 percent of its value, in the past five sessions.
A little historical factoid: 508 points is how much the Dow lost on Black Monday, Oct. 19, 1987. Of course the Dow was a lot lower then, and that point value accounted for more than 20 percent of the Dow's value. Imagine that: Falling into a bear market in one day. And, if you recall, there was no big catalyst that caused that one either -- it was all fear.
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