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I don’t like the above image any more than you, but let’s face it, the country is about to be auctioned off to overseas investors. It’s a pathetic situation.

Paulson and Bernanke came up with a rescue package “of sorts” for Fannie (FNM) and Freddie (FRE) that was greeted positively for about 10 minutes after the opening yesterday morning. The possibility that the Fed/Treasury would directly intervene to buy stock of these two institutions was a unique twist to previous rumors. After all one would have thought they only need to threaten that to squeeze the shorts. But no, Mr. Market is calling them out on it.

In the meantime, bank’s are in deep trouble and depositors are demanding their money now! It’s been said that IndyMac (IMB) depositors may suffer $1 billion in uninsured losses. Wachovia (NASDAQ:WB), Key Corp (NYSE:KEY) and Washington Mutual (NYSE:WM) were among other institutions rumored to have troubles. Maybe Chuck “Where’s the Microphone and Camera” Schumer can stimulate runs there too!

This is a scary market without question. I remember the same feelings during the Bunker Hunt silver crisis in 1980 when silver prices ran to $50 and then collapsed causing tremendous stress on brokers carrying his positions. But, we got through that okay. This crisis still has to play out.

Volume remains heavy and breadth stinks.

click to enlarge

The DJ Transportation Index has been an enigma to many including myself. Contrary Investor has given us this visual that I noted posted on Barry Ritholtz’s Big Picture blog. This is helpful.

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Source: Tuesday Outlook: Going Out of Business Sale