There's one silver lining from today; oil dropped $10/barrel. That should translate into lower gas at the pump in the days to come.
However, the awkward news is that Congress opted not to pass the TARP bill, with the House voting it down 228-205. There was bipartisan opposition, as two-thirds of the Republicans and about 40% of the Democrats voted against the bill. There must be a lot of people looking to get the roll call, since the House web site seems down for the count.
Wall Street is taking it in the neck; the Dow was down 777 points for the day, the biggest nominal drop in history, although with the Dow up at 10,365, it's only a 7% drop compared with the 23% we saw on Black Monday in October, 1987. The S&P 500 was off even more, tanking 8.8% and the NASDAQ index was off 9.1%. My personal portfolio took an even worse pounding, as the bottom-fishing I though I was doing didn't catch the Marianna Trench off to the left; my best stock only went down 7% and one stock got a third of its value shaved off.
What does this mean to the half of us who don't have much if anything in the market? Tougher loans, more bank closures and a likely down economy until things shake out. If you have cash on hand, you can get some deals in housing and in the stock market, but don't expect to get too much in the way of loans anytime soon.
The FDIC will be the next focal point; if the troubled debt can't be bought off the banks, they'll be the next to go, and a run on the banking system might require a FDIC bailout that could prove more costly in the long run than what we were looking at with the TARP package.
At least I got a pay raise today as part of my contract extension; that will offset the losses my small portfolio took, and my stocks should be bouncing back (he says as he whistles past the graveyard). Let's recall that 1987 was an up year for the market despite Black Monday. 2008 might not be that bad in the end.
Don't do anything stupid quite yet. The markets only went down 7-9% today and cooler heads might well prevail tomorrow. We shall see.