It's hard to believe that the Dow has had 3 worse days than down 680 (& all in the last few months), putting today in 4th place. Dow was down about 430 going into the final hour when it dropped another 250. Heavy selling at the end of the day is always a bad sign. The recession feeling, not to mention auto maker worries, brought on sellers in droves. Damage was widespread. The Alerian MLP Index dropped 11, the Dow Jones REIT Index dropped an eye popping 25 (over 20%) while the VIX (better known as the fear index) shot up 13 to 68½. There will be more bleeding.
Oil slipped on global recession worries & even save haven gold pulled back 2.
CLF09.NYM Crude Oil Jan 09 48.08 down 1.20 (2.4%)
GCZ08.CMX Gold Dec 08 ... 772.30 down 2.30 (0.3%)
Meanwhile Treasury securities rose dramatically. The 10 year Treasury now yields only 2.72% & the 90 day Treasury bill yields only 2 basis points (annualized). To buy that Treasury bill, it costs $1000 less a nickel in order to receive the full $1000 in 90 days. Frightened money is seeking safety in Treasuries. When they begin to grasp the significance of future enormous budget deficits, it will have to seek another investment. These are unusually troubling times.
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