Worst is likely yet to come
If you thought the stock market couldn’t get any worse, it did yesterday. The Dow Jones industrials had their biggest loss ever during a trading day, and a big afternoon rally failed to keep the Dow from its first close below 10,000 since 2004, the Associated Press reported.
At its worst point, the Dow was down more than 800 points, an intraday record. The stock market rallied during the final 90 minutes of the trading day, and the Dow finished down about 370 points at 9,955.50.
The average is down almost 30 percent from its all-time high of 14,164.53, set a year ago Thursday.
The global plunge in stocks was underway well before Wall Street ever woke up. In Japan, the Nikkei average lost more than 4 percent. And then the losses spread across Europe – nearly 6 percent for the FTSE-100 in Britain, 7 percent for the German DAX and more than 9 percent for France’s CAC-40.
The $700 billion U.S. government bailout package, which was signed into law Friday, was supposed to help stop the bleeding, but it didn’t. The Band-Aid bailout hasn’t stopped anything, and we’re likely going to see the recession continue. This begs the question that if the bailout wasn’t going to do anything to stop or slow the bear market, then why do you do it? Is President Bush and Congress just trying to line the pockets of these big businesses while every good business and taxpayer pays for it? It appears so.
The only time the government should step in is when their help will actually soften the blow to the economy. If the bailout package has helped already, we certainly can’t see it.
It’s time for us to buckle our seatbelts because the rocky road called the economy is about to get much rougher. We just hope that it doesn’t take us over a cliff.