Stocks plunging.

Over at the LA Times' Money & Company blog, the headline says, "Stocks plunge on concerns about new Fed program."  They're not upset at Operation Twist so much as they are upset that the program will not be enough to stave off a double-dip, if it hasn't already begun in parts of the nation.

As Paul Krugman notes, the Feds are planning to shift $400B (=1.1%) of a $36T worth of nonfinancial short-term debt to long term debt, in an effort to drive down long-term rates.  So it seems unlikely to have a major impact in terms of rates.

Nonetheless, the 10-year UST yield has dropped quite a bit over the last several days, all because of the state of the economy and renewed fears of a Euro-crisis domino effect.

Date	3 Mo	10 Yr
09/15/11	0.01	2.09
09/16/11	0.01	2.08
09/19/11	0.01	1.97
09/20/11	0.01	1.95
09/21/11	0.01	1.88
09/22/11	0.00	1.72

Investors are leaving the stock markets for the safety of the bond markets -- better to lose out to modest inflation, than to get hammered by a failing stock market.

Today's plunge however, is being fed by yesterday's FOMC release:

"Information received since ... August indicates that the pace of recovery in output and employment has slowed in recent months ... the pace of economic recovery is likely to be modest in the near term."

Translation: bad news, folks!  Unfortunately, Republicans are standing in the way of any meaningful efforts to stimulate the economy, so long as a Democrat is President of the United States.

UPDATE: On the plus side of things, Netflix closed the day with a three-cent gain, breaking the 7-straight trading days of declines.  After losing $81.55 in those 7 prior days, $0.03 isn't much, though.

UPDATE2: Edited chart to include today's closing UST yields.