Dow Closes Below 9500

The Dow Jones Industrial Average slid further today, closing at 9447.11. It was a loss of more than 5% on a day that earlier on showed signs of market stability. As credit tightened worldwide and a new wave of bad news rippled out from the European Union, it now appears, yet again, that the worst is yet to come.

Dashing a prevailing hope among folks in the financial sector, it became apparent that there is no consensus regarding a global approach to the crisis nor is one in the works (you need strong leaders for that to happen--look around the world and the UN and try to name a few). Compounding an already tense environment, members of the European Central Bank today kept a working-distance from the possibility of an EU doctrine, the various issues bouncing around as a result of credit woes being re-routed to each member to solve on the national level. It was a contributing factor in this afternoon's southward market migration.

Another blip of bad news came when the Fed announced its intention to save short-term lending from failure in a measure that amounts to yet another corporate freebie. The Fed tactic is aimed at shoring up commercial paper--unsecured promissory notes with a short maturation period that banks and corporations use (used to use?) for bridging revenue gaps as an alternative to more expensive banking lines of credit. Commercial paper took a record $94.9 billion hit the week ending October 1.

The International Monetary Fund was today urging world leaders to focus on community thinking, since the crisis now extends to every continent. So far, the response has been more short-term solutions.

It will be interesting to hear the candidates discuss these issues tonight (fat chance). Late this afternoon, Bernanke hinted at a rate cut. Just what we need: more fake money.