This sell-off is nearly overextended. Sure, the odds of a real crash are as high now as they will ever be (markets crash from oversold), but all the same, those are extremely rare events. Bear markets of this magnitude last for years, and there will be lots more rallies to short on the way down. [...]

And the crash goes on. Asian equity markets declined 4-5% last night, and Europe is currently off about 5% (bloomberg):

 
 
 
 
 
 
US futures are also pointing solidly lower:

 
 
 
 
 
 
But the most noteworthy prices today are in the commodities sector, where we have oil under $87, Dr. Copper at $2.53, and coffee, yes, even coffee finally falling, down to [...]

The credit system is not operating at all. LIBOR has a bid, but no offer. The TED spread is at a new record, over 3.82. Congress and Paulson are powerless to do anything about this. Equities, always slow to catch on, are still not reflecting the severity of the situation.
Here’s the TED spread from Bloomberg:

Here [...]

Here’s the Treasury Eurodollar spread again (Bloomberg):

And here is the VIX (Yahoo! Finance):

It is rare, to say the least, to see these warnings lights stay on for more than a day or two, and these levels are unprecidented in the crisis.
To crash or not to crash?
Short-term timing is the hardest part of trading. Sometimes you [...]

Last Friday, I wrote about the condition of the credit market and how it was ominous for stocks. Well, there is no relief yet. Things are worse, as banks are only willing to lend to one another at rates too high to justify borrowing. Overnight LIBOR hit 6.88% today, and 3-month LIBOR was a record [...]

Well, there you have it. Paulson got his 700 big ones (to start) but Congress is going to make him ask again for some of it (like they’ll say no). Executive compensation cuts? Well, deduction caps and no new golden parachutes for the biggest beggars. Equity? Well, warrants, and Paulson gets to say how many, [...]

This is still a Goldilocks economy?
Many standard fear gauges remain near their most elevated levels of the bust so far. From highly emotional conditions like these, we should expect a big move in equity prices. The question is whether the next emotion is relief or all-out panic.
If the fundamentals were not so horrible and stock [...]

What if in response to the overwhelming public opposition, which is surprising even me, Team Banker yanks the bailout? The market will crash, bailout or no bailout, but with no bailout, they can say “I told you so.”
Then when people are really hurting, I mean jumping out of windows hurting, they can come back with [...]

The bluff is not that nothing will happen to the economy if the bailout doesn’t pass, but that the bailout will do nothing to stop the depression (but lots to deepen it).
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Scare tactics.
All of a sudden, the economy is in dire danger of unknown horrors, we are hearing from Bernanke, Paulson, Bush, and the US [...]

This is why everyone needs to be extremely careful about their brokerage, banking, counterparty and business relationships. What would a bankruptcy of any of these entities do to your finances? From Bloomberg:
Lehman Won’t Return Prime-Broker Assets for `Months’ (Update2)
By Tom Cahil
Sept. 22 (Bloomberg) — Lehman Brothers Holdings Inc. will take “considerable time” before it [...]