As I write this, looking like a very real possibility. (Might be overly optimistic)
Scott Garrett, NJ Republican has gone on Bloomberg and PBSNewshour to press message that markets need certainty (he also said that Fannie and Freddie will require more money than TARP). Garrett said markets need to know what the rules are going to be so they can plan accordingly. This theme was also repeated by Timothy Geithner in his interview on PBS. At the moment markets don't know what to make of the recent Obama statement on banking regulation.
Then you have this gem on FoxBusiness and the WSJ where they announce that Bernanke's confirmation by Jan31 may be in trouble because of the "populist" election of Scott Brown.
If Bernanke is not confirmed, this would throw the markets into more turmoil and I think might confirm the 2nd wave down has started. If he is confirmed then we will see what happens next.
"I think if you wanted to send the worst signal to the markets right now in the country and send us in a tailspin, it would be to reject this nomination" Senate Banking Chairman Christopher Dodd
Senate Dems Not Sure They Can Get Enough Votes to Reconfirm Bernanke
Will Fed chief Ben Bernanke be the latest victim of the Scott Brown revolution?
To top it off AlJazeera reports
Less than six months after taking power, Japan's government is grappling with a budget blowout, financial scandals, and falling voter support. Yukio Hatoyama, the prime minister, says he will quit if it is proved that he lied about political donations from his mother. Meanwhile, prosecutors are about to question the second-ranking official in his Democratic Party of Japan over property purchases. Keeping in mind Japan is on its third finance minister in less than a year.
Some interesting articles:
Great analysis of todays trading after Obama announcement
U.S. Retail Credit Card Defaults Hit Near-Record Levels with No Relief in Sight
The President's proposal to rein in the large banks is only a catalyst for a decline that was bound to happen. There are lots of other reasons, both fundamental and technical, why the market has and will continue to sell off.
we expect current U.S. government debt of $15 trillion to double to about $30 trillion and private debt to drop in half to about $20 trillion over the next 4-5 years.
Tarp Was Nothing, TLGP Is The Real Deal