After all of the worry, campaign suspending, president’s begging, Wall Street’s wanting, and Paulson’s pushing congress still wasn’t able to pass the bill of our government giving a $700 billion package to bailout Wall Street and help with the financial crisis. And with a domino-effect like response, stocks took a major dive and the Dow Jones Industrial Average plunged to a place where it’s never been before. The dow went down 778 points making it the largest one day point drop in it’s history. The previous largest drop came on September 17, 2001, the first day of trading after the terrorist attacks of September 11.
While republicans and democrats are pointing fingers on Capitol Hill trying to figure out who’s to blame, investors and traders on Wall Street are scrambling. Their scrambling is likely to continue tomorrow as well. Things will not magically get better overnight, nor will lawmakers vote on a new bailout plan tomorrow. They may get another shot at it on Thursday, but there is a great consensus of people who do not want to approve of the plan simply because they believe the American people should not have to be forced to pay this bill of $700 billion.
Not for nothin’, but the Dow Jones Industrial Average had it’s largest drop in history because the $700 billion bailout of the nation’s financial system didn’t go through. But playing the “what if” game, what if the bailout plan did go through and it didn’t work. Well, stocks would have declined, banks would have continued to collapse, small business would have still went out of business, and the American people would have been out of $700 billion dollars.
Even though this drop is bad for Wall Street and our economy, and is the largest one day drop in U.S. history, percentage wise it isn’t the single day biggest drop. As we know we’ve been in this financial crisis for a while now, and it has gotten quite dire over the past couple of weeks. So it’s understandable that it’s been dropping steadily and steadily. Today’s drop ended at 6.98 percent, but that is far, far below the 22 percent drop we saw on Black Monday back in 1987. The way things are going now, I don’t think that we’ll see a percentage drop that significant any time soon, it’ll have to get a lot better for it to get that bad.
Lawmakers have to get together and figure something out. I’m not one to believe much in extraordinary coincidences, but October is right around the corner, that’s when we found two of the worst days in financial history (Black Monday and the Great Depression crash), and when you’ll find many of the great net and percentage drops in history.