Well, now we know the market's reaction to The Plan to Save the World, aka RTC II. 

Consider

• When I last checked late afternoon, the TED spread - the difference between 3 month LIBOR and the 3 month T-bill - was 2.38%, up from Friday's close of 2.31%.  That is lower than the 3.00% registered on Wednesday and 3.18% on Thursday, but only those two days saw higher rates than today.  The TED spread was a more normal 0.45% three months ago.  One would think that if the inter-bank market was confident that RTC II would solve the enormous problems we face, the TED spread would have plummeted today.  It did not.  Instead, it rose.  Maybe the TED spread will fall tomorrow or next week, but so far, it is demonstrating a discernible lack of confidence in RTC II.

• The Fed funds rate was 0.125% last I checked this afternoon.  Frankly, I do not know why.  However, given the Fed is targeting 2%, I cannot in any way interpret this as a normal market.

• WTI was up an astonishing $25 at one point today to $130 per barrel before settling at $120 last I checked.  Yes, some of that was a technical squeeze given that we were rolling over contracts, but such action is unprecedented and also not evidence of a normal market.

• The dollar, as represented by the dollar index, fell the most it has fallen since May 1995.

• Gold traded above $900 after trading as low as $825 on Friday.

• Stocks wiped out all Friday's gains and more.  This is similar to the action after the GSEs were nationalized.  About the only positive thing that can be said about stocks today was that volume on the NYSE composite was a "mere" 5.1 billion shares, roughly half the volume on Thursday and Friday.

• The bank index, the BKX, fell 10.3%.  Since this plan is supposed to bail out the banks, one might think the response would not have been a violent sell-off.

Perhaps today was a knee-jerk sell-the-news reaction and the market will move higher in the not-to-distant future.  However, for today, the reaction was unreservedly bad.