With the ill-advise and hastily-prepared Emergency Economic Stabilization Act of 2008 failing in the House of Representatives, conservatives and liberal alike are cheering the 228 members who voted against the measure.
The actual votes cast by each member of the House can be seen here.
Failing largely along party lines, the measure now seems doomed to permanent defeat even though stocks - particularly those in the financial sector - have suffered one of their worst days of all time.
Repeatedly told that the entire US and global financial system was at risk, especially by President Bush, Treasury Secretary Paulson and congressional leaders of the Democratic party, the stock market seems to have fulfilled the prophecy.
Dow 10,365.45 -777.68 (6.98%); NASDAQ 1,983.73 -199.61 (9.14%); S&P 500 1,107.06 -105.95 (8.73%) NYSE Composite 7,207.02 Down 683.35 (8.66%)
What has never been fully explained is just how the economy would be brought to its knees. With catch-phrases of "frozen credit markets" and "failing institutions" being tossed about for at least the prior two weeks, the actual fallout at the close of trading today is spectacular, but in no way catastrophic.
In fact, compared to the closing lows of Wednesday, September 17, the Dow is only 244 points lower. On that day, a day before Paulson announced consideration of the "bailout" plan, the Dow closed at 10,609.66. The NASDAQ, which suffered the worst percentage loss today, finished at 2098.85 and the S&P closed at 1156.39 on the 17th.
So, in retrospect, the declines of Monday, September 29, when viewed in a larger perspective, were not all that incredible. Wall Street thought they were going to get a free lunch courtesy of the US taxpayer and had bid themselves back upwards. Once the free money was swept away by the House of Representatives, they expressed their anger by selling, even though today's sell-off was far from a panic. In fact, the Dow's decline over the last 8 days of trading is less than 3%.
Let the bargain hunting begin.
The day was largely a rout, however, with declining issues outnumbering advancers, 5897-619 and new lows trouncing new highs, 1740-39.
Volume was heavy, but especially so in the final 1 1/2 hours of trading, after the House defeated the bailout measure.
NYSE Volume 1,969,514,000
NASDAQ Volume 2,843,311,000
Oil took a significant hit, down $10.52, to $96.37. Gold gained just $5.90, to $894.40, while silver actually lost 48 cents, closing at $13.03.
This aberrant behavior in the commodities markets confirms that the financial underpinnings are not endangered, though the potential for a serious deflationary spiral continue to form in the background.
As I've been saying here for at least the past three months and probably longer, deflation is the real issue. For some, especially businesses trying to keep prices stable, this is troubling. For consumers and small business, however, a spate of deflation is welcome, as small merchants and companies are better prepared to adjust pricing "on the fly" so to speak.
What is occurring could be considered the beginning of an American - and to a larger extent, global - Renaissance, in which the excesses of Wall Street are replaced by innovation and the micro-economics of local and middle-class commerce, which is less orderly, though eminently more egalitarian.
Wall Street may be suffering through one of the worst periods in its long and highly-checkered history of booms and busts. In the long run, though, Main Street and the US consumer may become the ultimate victor.