The second ugly week in a row leaves us down 7.19% over the past 5 days. While it would be convenient to blame Washington again, unfortunately congress can only shoulder some of the blame for this week's action. Sharing the load are Europe and the looming threat of a double dip recession. Taken together, these ingredients cultivated an environment of fear, which came to a panicked boil on Thursday as the Dow dropped 500 points.
The recession chatter grew louder this week and as it did so did allusions to the painful crash of 2008. Being of the school of thought that the markets make the news more than the other way around, I believe that these allusions to '08 were the primary cause of the sharp drop in equities. 2008 was simply too painful to go through again and many would rather take money off the table down 10% than live through being down 40% again.
Whether or not this is a buying opportunity for the near term remains to be seen, but long term values are favorable at these levels. If we enter another recession though, those long term values will likely be very long term indeed.