Part of today's stock market selloff started when rumors started to circulate that the first time home buyer tax credit may not be extended. In strong markets, these kind of rumors don't take hold, in skittish markets they do.
As rumors fly back and forth, volatility and wild swings could be the order of the day(s) until something passes or doesn't. Then the market will go onto the next crisis. That's what weak markets do, and it certainly appears we are moving into a weak market phase.
As for the house tax credit extension, the best reporting that I have seen on what is likely to develop is being done by Diana Olick. Here's her report.
This is a perfect example that while politicians blast speculators as the reason why we are in the mess we are in, they are the reason for speculation. If we all accepted that the government was going to stay out of the market and the government actually stayed out of the market, there would be no need for this speculation.
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