It Needs to Get Worse on Wall Street

The first thing I did when my plane landed moments ago was to check to see how the markets were doing. With the word last night that Lehman was filing for bankruptcy, AIG needs $40 billion, and Merrill Lynch is being sold, I was expecting a HUGE market sell-off.

In fact I was hoping for one.

Typically, the way awful periods (such as the current one) in the stock market end is with a huge capitulation--investors all say at once, "I give up. Sell." The market drops dramatically as a result, and a couple of days (or weeks) later stocks start to go up again.

As of 12:48, the Dow was "only" down 277.

Bad? Yes.

A blow off? No.

I am afraid we need to see things to get even worse....before they will get better.