On June 21 the DJIA crept under 12,000, and I was dubious of any turnaround like the two times prior this year it fell to that level; around those two times the Fed announced bailout programs (decreased rates and increased TAFs) that kept things afloat for a brief spell. Now, less than a month later, it is below 11,000, despite significant bailouts proposed for Fannie Mae and Freddy Mac. Fortunately, it seems investors see such talk as indicative of the failure of these institutions, rather than opportunities to profit from the U.S. tax base. The market uptick from these announcements was lackluster to say the least.
So it appears bailouts for Fannie Mae and Freddy Mac are underway, and I'll report more once the specifics have been finalized. Government bailouts come in differing levels of intensity with different benefits to different classes of investors, and there is a lot of hot air and speculation flying around, but probably within the week concrete information about the bailout program will be announced, and quite possibly a mortgage bailout plan from the house and senate will be sent to the White House very shortly.
All of this was anticipated, but still disheartening for anyone who believes in the concept of personal responsibility that inevitably goes along with freedom—as well as preferring the free market over ongoing and pervasive government regulation.