Plunging Markets

Bailout rejected, DOW drops 6%.

Some people wonder why it hasn't dropped the 20% predicted. That's because some people are still hoping a new vote might pass it. If a second vote goes down, there's probably another 6% drop in store, with about 12% more bleeding out through the end of October as banks and hedge funds fail.

Then we'll see the market "stabilize" as the economy crash follows. Unemployment would probably be around 10% by inauguration day (people are estimating between four and five million unemployed). Housing prices would probably go down another 20% over the next six months: overbuilt areas like Cali, Ariz, Florida may see another 30% decline. Mean incomes would probably decline about the same over the coming year, with increasing foreclosures keeping housing prices low for half a decade.

Negative GDP for two years (starting Q3 2008). At least five years for income and personal assets to climb back to today's levels.

I'm sorry that so many Americans were cheering on this economic catastrophe out of spite. And I hope I'm being wildly pessimistic!

Nevertheless, it was the House Republicans who failed to come through. So we can call this the "Bush/McCain Depression"