Sept. 29: Dow 10,365 (down 777 points); trading range, 872 points

The markets collapsed after the U.S. House of Representatives failed to pass the $700 billion Emergency Economic Stabilization Act.

Considering the tight credit markets, most were expecting the measure to sail through Capitol Hill, but the bill's failure exacerbated fears that the economy would continue to suffer while the politicians tried to reach a solution.

Naturally, both political parties pointed the finger at the other to place blame for the measure's failure.

Continued tightness in the credit markets were reflected in the TED spread, the difference between what the banks charge each other for three-month loans (three-month LIBOR) and what the U.S. government pays for them (three-month T-bills). The spread was at its highest level since 1984, and indicated that banks were unwilling to lend to each other.

The selling on the Street was broad based, as the Dow, Nasdaq and S&P 500 fell 7%, 9.1% and 8.8%, respectively, settling at the session's lows.

The Nasdaq and S&P 500's declines were the largest since Black Monday in 1987, while the Dow posted its worst day since the 9/11 attacks.

Greg Tucker is the executive editor of OptionsZone.com.

There is a bit of trepidation as I sit here at my screen, watching the S&P 500 drop more than 3%, reading about yet another bank "buyout," and especially after skimming through Congress's just-released 110 page $700 billion Emergency Economic Stabilization Act -- Wall Street bailout plan.

Apparently, no on likes it. The bright point of the plan is the two inch margins and the double spacing that make it readable.

As an economist, I am very concerned about the long term consequences of the plan, whether it will train the markets to expect government intervention. Also, the sheer cost is very high -- about $4,600 per working person -- unless, of course, the government is able to make money with it.

Is this just the fore shocks and tremors before the financial earthquake? With all these banks failing, things could get very messy. Is this market setting up for a crash?