Well said Vitorc. And LN? history is repeating itself. In 1929 the DOW after the initial crash, the DOW rallied a bit, then made a second bottom which begat a second rally off the double bottom and only then toward May of 1930 did the real drop begin which took the DOW -89% down right through to middle 1932. The second, bigger drop came off the back that realisation finally set in that credit was simply not available, that company earnings were gone, and that those who still had cash were simply not lending it to those who needed it. It was the credit bubble and the subsequent credit squeeze that broke the DOW's back in the 2nd slow and merciless drop. It was this and the resulting deflation that brought consumers and businesses to their knees. A little known, or rather acknowledged) fact is that the Fed in those days did in fact step in and provide liquidity. The problem was that the banks hoarded any cash they got. They would only lend to people and businesses who didn't need loans, but not to anyone who needed it since the risk was too high. The exact, but exact same thing is happening today and it's got BB's knivkers in a knot because he can't force the banks to lend. Right now the Fed has exactly two bullets left to stave off a depression [1] a rate cut (which I don't believe will help much) and [2] bail out mortgages. If that doesn't work, then it's the 1930's all over again, just worse