If the markets hate one thing above all else it is uncertainty. The shift from uncertainty to clarity has most often marked the turning point for markets. For markets, what matters most isn’t about getting "out of the woods"; it’s about knowing how big the forest is. The market rebounds during the 30 days that followed on the heels of the mid-March Bear Sterns collapse and the mid-July government sponsored enterprise (GSE) bailout plan were the result of clarity. These catalyzing events cut through the cloud that had enveloped the markets as myriad potential courses of action and related fallout were the subject of wide ranging speculationl. In fact, the mid-July GSE event was so pivotal that even at the apex of last week’s sell off the financial sector remained above the low point reached in July that preceded the announcement of the Treasury’s plan to the companies into conservatorship. Last week’s announcement that the government will create a TARP to lift out the illiquid assets from the balance sheets of financial insitutions catalyzed on 11% rebound in the S & P 500 from the intraday lows on Thursday, as it provided the clarity necessary to stabilize the financial markets".

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