The markets traded down into the support made on August 6th and 7th. The treasury markets, while higher, interestingly seemed to take it all in stride.
Once again we are faced with a Friday death dive scenario, so it is important for the friendlies to hold the support lines. When real fear enters a market, there is suddenly no consensus on value, and getting out can make everyone goofy. The 'just keep the cheese just let me out the trap' rationale takes over. The sub-prime contagion is a bear's dream, but could wane if the Fed and friends work a fix. Implementing the Greenspan model of fixing the problem would entail the ' whatever money it takes' method. The Bernanke policy of course is to worry about inflation first. Of course if we break hard enough it will certainly make that policy work.
