So why did Wall St.

ALAN KOHLER, PRESENTER: So why did Wall St. capitulate again despite its $700 billion rescue package being passed by Congress?For his take on things I spoke to veteran Wall Street watcher Bob O'Brien, the stocks editor of the New York based weekly newspaper, Barron's.

ALAN KOHLER: Bob, the market reacted positively to begin with when the House passed the bailout, but then it fell back again and closed lower, so why did that happen?

BOB O'BRIEN, STOCKS EDITOR, BARRON'S: Well the market is now taking a look at what has to happen next, raising questions about things like how is the Treasury Department going to implement this $700 billion bailout, exactly what steps are going to be taken, how many market participants are going to be drawn into this initiative, at exactly what price are these things going to cost out at, those are all the questions that the market was asking.

ALAN KOHLER: I guess the other problem is that there's some negative economic data out this week as well?

BOB O'BRIEN: That's certainly the case, I mean we got the non-farm payrolls reading today for the month of September, job losses swelled much beyond what Wall Street economists had been anticipating and this continued a string of very weak readings that we've seen all this week and if you look at the commodities market has been playing, especially over the last few trading days, commodities are basically telling us that there's concerns that the entire global economic system, not just the US.

ALAN KOHLER: Bob, you've been covering the markets a long time, can you put what's happening now into some sort of historical context for us?

BOB O'BRIEN: Yeah, you know a lot of people got upset and frightened by the sell off that we saw on the Dow on Monday when we lost 778 points saying, "Oh my that was the biggest point loss that we've ever seen", but it's more accurate to look at these things in percentage terms and in percentage terms that was only about the 17th or 18th steepest loss that the Dow has ever sustained, so it wasn't quite a historic loss, but keep in mind we've also dropped back to two year lows, the Dow is now about 26 per cent below where it stood in October of 2007, so we're in pretty dire shape.

However, the one thing that does bowed to the upside here is that October has a reputation for being a month that's known as the bear killer, meaning the bear markets tend to finally reach a bottom in the month of October and then start this kind of grinding process of recovery, it's not really an elegant sort of thing to watch but it's very, very reliable in an historic basis.

ALAN KOHLER: So do you think the market is actually trying to find a bottom now, do you?

BOB O'BRIEN: Well I think until we get some of the confusion about the economy cleared up, we're probably going to be subject to these extreme volatility that we've seen over the last couple of days, triple digit moves on the Dow industrial average probably more typical, so I don't think the real bottoming process is going to come until we get through that, but I put a point in the calendar perhaps sometime later this month, perhaps in the last week of October that we start to really establish that process of finding a bottom. The one thing that's encouraging is that a lot of the swift movements we've seen have come all relatively strong volume which at least has the historical tendency of telling us that some epic events are taking place here.

ALAN KOHLER: Just finally, what's the mood of Wall Street when you talk to traders there?

BOB O'BRIEN: Oh, they're frightened, I mean number one, a lot of Wall Street traders and professionals have been frightened for their jobs this year, everything that they've, you know they've seen their colleagues walking out the door with their goods packed in cardboard boxes, so there's a lot of fear out there, there's also a sense that there's no place to hide, I mean hedge funds aren't making any money under this environment, traditional long traders aren't making any money in this environment, short term traders aren't making any money in this environment, there's really no place for the professional trader to try and conceal from all the market dynamics that are taking place here and it just seems that every day you come in and you read another bank failure or another epic event has taken place in this market and it creates this almost panic sort of environment on Wall Street.

ALAN KOHLER: Thanks for joining Inside Business, Bob.

BOB O'BRIEN: Thanks very much Alan, glad to be with you.