A Timeline Of Yesterday’s Market Plunge

Here is a look at a graphical timeline representing the performance of the Dow as yesterday’s events unfolded:

Graphic courtesy of the WSJ

Basically the Dow was already having a bad day and the bailout plan failing to pass the house was the cinder block that broke the Camel’s back, overall I think it really speaks to how the markets are gripped by fear right now and how they’re looking for something, anything to ease fears and inject some confidence into the markets.

In the end I suspect that many investors, traders, fund managers, etc, are as skeptical as to the efficacy of the bailout plan as I am, but they believe that it will cause others to feel more confident and are making their decisions accordingly. It could very well be a situation where the actions of market actors are being primarily driven by their perceptions of aggregate market confidence, as opposed to what they think the market’s actual fundamentals are.

All that being said what happens when the bailout plan fails to generate the dividends that many expect it too, what happens when we’ve spent hundreds of billions of dollars and there has been little improvement in the credit markets, housing, etc, etc?

The fallout from that situation could make yesterday look like a cakewalk.

The graphic above comes from an article discussing the failure of the bailout plan and the resultant drop in the Dow, you can read more here.

Disclosure: at the time of publishing the author didn’t own a position in any of the companies mentioned in this article; the ideas expressed are solely the opinions of the author and shouldn’t be viewed as financial or investment advice.

Subscribe by RSS Subscribe by Email