When the Dow Jones sat 300 points down early in the day, it seemed to us that was about the best possible indicator that the damage from the weekend had been contained. But the last 30 minutes in the market was a catastrophe. The Dow finished off over 4% as did the S&P 500. Here are some important events marking the day:

• Financial stocks got hammered. AIG was down 60% and was downgraded by the rating agencies (a sign of peril for an insurance company), WaMu was down to $2 and may well be the next shoe to drop;
• The issue remains liquidity in the bond market which has dried up recently. Banks are not lending to other banks or financial companies. Without constant financing, these kinds of companies die;
• The Fed injected $70 billion into the system, the largest infusion since 9/11;

The obvious question is of course, "What's next" and how does this impact Maui real estate? The real answer is nobody knows, we are all just guessing, but here are some guesses;

• The Nikkei will have a very bad night;
• WaMu will not survive the week;
• AIG will continue to be a focus of the markets as EVERYONE has significant exposure to them;
• Lehman assets will trade at levels that force other holders of similar securities to recognize additional losses;
• Tuesday morning will be a VERY scary time.

We will keep you posted. As far as Maui real estate goes, September, in the best of years, is a lost month so the immediate impact is nil. But this situation needs to get resolved soon.