Archived IMT (2008.11.20)

The midday stocks rally proved shortlived as reports of an agreement over Automakers' bailout were inconclusive. S&P plunged 6.7% to close at its lowest level in 11 years at 776, while the Dow closed 5.6% down to close at 7,553. The back and forth charade over a bailout plan for US carmakers is becoming increasingly similar to that of the TARP. Markets rally on false reports of an agreement, but when the plan was ultimately put in place, markets extended their damage after a brief run-up. The big difference between now and October is that the economy is unambiguoysly sinking into a recession, with 2-year yields falling below the 1.00% level for the first time in modern history. The only factors preventing further selling in Asian trade would be more rumors of an agreement over US autos.