Worst Year Ever for Stocks:

TARP: Troubled Asset Relief Program. This is the Treasury's big $700 billion ($850B including pork) program that has been used to prop up financial institutions.
TAF: Term Auction Facility (or TAFfy). Program by which the Fed auctions funds to financial institutions — allowing them to use their toxic assets for collateral.
TALF: Term Asset-Backed Lending Facility (or "son of Taffy"). Recently announced Fed program designed to help the market for student, auto and other consumer loans.
CPFF: Commercial Paper Funding Facility. Buys commercial paper directly from corporations.
AMLF: Asset-Backed Money Fund Lending Facility. Fed program designed to buy short-term paper (including commercial paper) to prevent money market funds from "breaking the buck."
TSLF: Term Securities Lending Facility. Fed program that lets banks swap bad mortgage and other debt from their books in exchange for Treasuries.
SLF: Special Lending Facilities. Originally designed to loan money to fund JPMorgan's purchase of Bear Stearns in March. Also used to back AIG's balance sheet to avoid total collapse.
PDCF: Primary Dealer Credit Facility. This is the Fed program that allowed broker/dealers and other non-banks to tap the Fed's discount window (back when there were independent broker/dealers)

102 were trading under $10
41 were trading under $5
204 were trading with a market cap of less than $4 billion

These are not the only criteria used for inclusion in the index, but S&P 500 companies typically have market caps above $4 billion and stock prices above $5. Furthermore, many institutional fund managers are prohibited from owning stocks that trade below $10 or $5, depending on the firm.

In other words, a lot of companies currently in the S&P 500 may not be eligible for membership or, more importantly, ownership by major institutions. That, in turns, may mean more selling ahead, even though stocks are "cheap" based on a variety of metrics. For example, 163 stocks in the S&P 500 are trading below book value, or assets minus liabilities, including non-financials like Alcoa and Duke Energy.

$VIX

Greenspan's Hindsight is 20/20

Greenspan, the former Federal Reserve Chairman, told a Congressional hearing that the credit crunch exceeded anything he had imagined; he goofed in thinking that banks would act intelligently to protect themselves from risky mortgages.

“I made a mistake in presuming that the self-interest of organizations, specifically banks and others, was such that they were best capable of protecting their own shareholders,” Greenspan said.

Housing prices ballooned for about 10 years, ending in 2006. The run-up was great for people selling (or flipping), and wonderful for real estate agents who pocketed easy commissions. But Greenspan said, “The housing bubble became clear to me sometime early in 2006, in retrospect.”

That’s helpful - weren’t the cracks in the housing market apparent by then? But retrospect just doesn't cut it.

Thanks for the insight, Alan. The current mess didn’t require gazing into the future - only accurately assessing the then-current situation.

Of course, that’s easy to say in retrospect, if you’ll pardon the expression.

Washington Mutual paid former CEO Kerry Killinger $14.4 million in 2007 and over $54 million from 2002-07, Forbes reports. In return, the nearly 120-year-old firm was led into the biggest bank failure in U.S. history.

I'm sure many of WaMu's investors, employees and depositors would prefer terms unsuitable for publication, especially when they learn current WaMu CEO Alan Fishman is entitled to $11.6 million in cash severance and to keep his $7.5 million signing bonus, The New York Times reports. (Not bad for about three weeks of work.)