Update: Dow closed down 777 points today.

Nearly everything is down right now… Dow -500, Nasdaq -130, Oil under 100. The vote for the $700 billion bailout package has failed to pass in the house and has sent shockwaves through the financial markets as the level of economic uncertainty reaches new highs.

This news has worked out well for my put options in Bank of America which is down 15% on the news and the options are up nearly 200%. I have taken my principal off the table and am now invested with my profits only as I think we’ll see some more downside movement this week. The entire financial sector is taking a hit and if short selling were allowed on these stocks the downside move would most definitely be stronger.

I think a modified version of the bill will be passed soon, although it’s unclear what modifications will need to be made in order to get the Republicans behind it. There are many politicians saying why they voted it down, but more is sure to come throughout the day.

[tags]bailout, 700 billion, shaun carter, house, government[/tags]