The roller coaster continues. Clearly angry with bailout plans for corporations with little oversight or consideration for individuals and the news that Morgan Stanley and Goldman Sachs are getting out of the investment game for more traditional bank holding companies, the stock market fluctuated wildly, completely obliterating any gains from Friday, closing 371 points down:
Volatility again swept the financial markets Monday as investors grew nervous about an amorphous government plan to buy $700 billion in banks' mortgage debt. Stocks fell sharply, taking the Dow Jones industrials down more than 370 points, while investors sought safety in hard assets such as gold and oil, which at one point shot up more than $25 a barrel.
Crude oil finally closed after much volatility up more than $16/barrel, the largest single-day gain since 1984. And don't think it's stopping. Republican oil man Matt Simmons says he wouldn't be surprised to see $500/barrel oil sooner than you realize.
While John "The economy is fundamentally strong" McCain backpedals, calling this the biggest crisis since WWII, Democrats have worked to get some consumer protections in the bailout terms.
Investors were uncertain just how successful the administration's plan will be in unfreezing credit markets, which many businesses depend on to fund day-to-day operations, and for propping up the still-weak housing market.
Congressional aides said the House could act on a bailout bill as early as Wednesday.
Bush said, "Obviously, there will be differences over some details, and we will have to work through them. That is an understandable part of the policy making process." But he also said, "It would not be understandable if members of Congress sought to use this emergency legislation to pass unrelated provisions, or to insist on provisions that would undermine the effectiveness of the plan."
The proposal that Dodd sent to Treasury Secretary Henry Paulson would let judges modify the mortgages of homeowners in bankruptcy to allow them to keep their homes.
It also would require that the government come up with "a systematic approach for preventing foreclosure" on the mortgages it acquires as part of the bailout. That would include the home loans held by Fannie Mae and Freddie Mac, the troubled mortgage giants now under the control of a government regulator.
Feel more secure? Me neither. Prepare for more volatility this week.