This blog was periodically updated at the top, but can best be read from the bottom. I have incorporated my two earlier blogs of the day in it. And now I am going home.

5:25 p.m. | Lessons of the day:What did we learn today? The first thing is that the authorities remain determined to staunch the panic and keep the credit markets functioning.

But it is far from clear they can do so. The Fed’s indication that it might intervene in the corporate commercial paper market was merely the latest effort to persuade investors that they need not fear. Trouble is, such attempts only emphasize the obvious vulnerability of the system.

The late rally may help to encourage Asian markets when they open in a few hours, even if the Dow was not able to hold above 10,000. Another favorable sign — I think — is that the S.&P. financials index bottomed at 231.96, more than 6 points higher than the July 15 panic low of 225.83.

Nothing relieved the impression formed over the weekend that Europe is scrambling and quarreling rather than acting. I had hoped that central banks would cut rates on a coordinated basis, as I wrote early this morning. Perhaps that will come, but it appears that the European Central Bank is still worried about inflation and unwilling to take part.

Jean-Claude Trichet, the central bank president, sounded like he was patting himself on the back today, when he talked about how his central bank had been “among the first” to provide liquidity to the banking system, and that it would keep doing so.

The problem, he thinks, is that investors are worrying too much. “We’ve reached the stage where the pendulum has swung the other way. Private shareholders are overestimating the risk. My appeal is to shoulder their responsibility to be calm and to have trust,” Mr. Trichet said.

One economist I know — who is more worried about depression than inflation — suggested that now is a good time to invoke the Bush Doctrine, which gives us the right to intervene anywhere, with or without allies, if we think someone is doing serious harm to American national interests. He suggested the Marines should be sent to Frankfurt to take control of the European Central Bank. Such a move might be very well better received in Italy and France.

When the euro began almost a decade ago, it was the Anglo-Saxon economists who thought it could never last. Now we have the first crisis, and it is showing the strain. There is speculation that one or more countries might try to leave the currency — something that is not supposed to be possible — if the economy in Europe gets bad enough.

It certainly seems likely to get bad. Fourth quarter G.D.P. is likely to plunge in most developed countries. A CNN poll over the weekend found that most Americans think a depression is at least somewhat likely.

Mr. Trichet is right. Fear is overdone, or at least I hope it is. But I suspect he could do more good with action than with cheerleading.

4:50 p.m. | Not quite 10,000: The Dow closed under 10,000 for the first time since Oct. 26, 2004 today, even though it was far above the low of the day,

Over that period of nearly four years, here are the best and worst performers of the stocks now in the index, as measured by Bloomberg. (Figures do not include dividends.)

Best

1. Hewlett-Packard, up 129%

2. McDonalds, up 98%

3. Exxon Mobil, up 57%

4. Chevron, up 42%

5. Coca-Cola, up 30%

In other words, a tech recovery, two oil companies and two companies that sell inexpensive food or drinks.

Worst

1. General Motors, down 77%

2. Citigroup, down 60%

3. Alcoa, down 45%

4. Home Depot, down 42%

5. General Electric, down 36%

A car company that bet on S.U.V.s, a basic material company facing a recession around the world, a troubled bank, a retailer dependant on a vibrant housing market, and a conglomerate that long depended on its financial arm.

3:58 p.m. | 10,000 or bust: The psychologically important level of 10,000 on the Dow — do you remember that phrase? — was breached today. But in the final minutes of trading the index got up to 10,030, only to fall back. Can it close above 10,000? Does it matter?

3:45 p.m. | Rally?: The Dow industrials are up more than 200 points from their low, which was hit at 2:45. We’ll see if that holds, but it is at least a little encouraging.

2:45 p.m. | The Crash of 2008: If the S.&P. 500 closes where it is now, (1009.07, down 8 percent for the day) it will have lost more than 13% over the past three sessions.

The only other time declines of that magnitude occurred since World War II was in the crash of 1987. Prior to that, the last one was in May 1940, when France fell to Germany.

2:05 p.m. | Why It Isn’t Working: John Higgins of Capital Economics offers his analysis of why this is happening:

If policymakers think that adding extra liquidity is going to solve the credit crunch on its own, they are going to be sorely disappointed. This is because upward pressure on interbank rates is a consequence, not a cause, of the crisis. It is a shortfall of bank capital that has made financial institutions reluctant to lend to one another. Boosting liquidity is therefore only a necessary, but not a sufficient, condition for stabilising the financial sector. In fact, until banks are adequately recapitalised, funding pressures may even get worse. This also explains why the markets’ reaction to the passage of the Emergency Economic Stabilization Act (EESA) has been so lukewarm. Bank capital will only get a lift from the $700 billion “troubled asset relief program” if the authorities overpay for the assets they buy.”

He thinks the Fed will cut rates to 1 percent or lower, from 2 percent now.

1:50 p.m. | Depression?: Do you think a new depression is likely? CNN and Opinion Research are out with a new poll, taken over the weekend, which finds that about three of five adults think a depression is at least somewhat likely.

Here is the question:

As you may know, the U.S. went through a depression in the 1930s in which roughly one out of four workers were unemployed, banks failed across the country, and millions of ordinary Americans were temporarily homeless or unable to feed their families. Do you think it is very likely, somewhat likely, not very likely, or not likely at all that another depression like that could occur in the U.S.?

Very likely, 21%

Somewhat likely, 38%

Not very likely, 29%

Not likely at all, 13%

Another question: “How would you rate the economic conditions in the country today — as very good, somewhat good, somewhat poor, or very poor?”

A majority, 53 percent, picked “very poor,” the worst choice offered. Another 31 percent said “somewhat poor.” That left just 16 percent — about one of six people — to say the economy was very good or somewhat good.

I’ve never seen poll results that negative. CNN says that the sampling error could be up to 4.5 percentage points, but these numbers are horrid even if you assume they overstate the gloom by more than that.

1:35 p.m. | World Recession?: The president of the World Bank, Robert Zoellick, is out today with a gloomy assessment of the effect of the financial crisis:

“The events of September could be a tipping point for many developing countries. A drop in exports, as well as capital inflow, will trigger a falloff in investments. Deceleration of growth and deteriorating financing conditions, combined with monetary tightening, will trigger business failures and possibly banking emergencies. Some countries will slip toward balance of payments crises. As is always the case, the most poor are the most defenseless.”

The state of the financial system is feeding over to economies around the world, reducing demand and threatening to produce deep recessions. There is no way to know how much that is affecting the market, but it must be playing a part.

1:25 p.m. | Dick Fuld Talks: Dick Fuld, the chief executive of Lehman Brothers, was among the most self-confident executives I have ever known. It must be killing him to have to sit through lectures by politicians, as is happening today.

I haven’t had the time to listen to all of the questioning, But when I tuned in, he was defending his decision to repurchase $10 billion in stock as the company faced what congressmen said was a liquidity crisis.

He denies he thought there was such a crisis. “At that time, at the end of the year, last year, I did not believe we had that problem,” he said.

And, anyway, he had to do it to avoid diluting shareholders, as would have happened if the company had handed out stock to executives without repurchasing an equal number of shares.

Couldn’t he admit that, with hindsight, that was a serious mistake?

12:30 p.m. | Hanging the Crepe: Peter Morichi, an economist at the University of Maryland, is out with a verdict:

It’s official! The bank bailout has not worked.

That strikes me as premature, coming as it does before the Treasury has spent the first of those 700 billion dollars. What would be more accurate to say is that trust in official promises is no higher than trust in bank balance sheets. As they say in Missouri, Show Me.

Over in Europe, Silvio Berlusconi, the Italian prime minister, released a joint statement from no fewer than 27 member countries of the European Union saying they will “take whatever measures are necessary to maintain the stability of the financial system.”

It strikes me that is a hopeless task. There is little stability left to maintain. The Paulson plan is an effort to restore some stability. Europe has yet to come up with anything similar, as can be seen in this updated version of the article I and colleagues wrote for today’s paper.

11:45 a.m. | “The Market Has Flopped”: The Group of 30, a group of former regulators and government officials, and current and former corporate chieftains, is out with a long report on financial regulation today. It offers no conclusions, but is interesting in describing the weaknesses of all the systems used around the world.

At a news conference today, the people in charge of writing the report, Paul Volcker, a former Fed chairman, and Roger Ferguson, a former Fed vice chairman who now runs TIAA-CREF, a money management firm, along with the chairman of the Group, Jacob Frenkel, a former governor of the Bank of Israel and now, unfortunately, vice chairman of A.I.G., had some interesting things to say.

Mr. Frenkel noted that “things are highly contagious today,” and that the old distinction regulators used, between solvency and liquidity, was badly blurred. Mr. Ferguson observed that none of the financial regulatory systems had worked especially well, and that they would need to be restructured almost everywhere. But he added that even the best regulation would not stop financial institutions from making mistakes.

The best lines, as usual, came from Mr. Volcker, the only living ex-Fed chairman who still has a good reputation for financial wisdom.

“The Treasury has become the lender of last resort in the United States, which I think is appropriate,” he said.

He noted that in Britain, with the most consolidated regulatory scheme, the Financial Services Authority still seemed to have trouble communicating with the Treasury and the Bank of England and that regulatory communication may have been better in the United States, despite its fragmented nature.

Mr. Volcker’s skepticism of the new financial system has been well known for years, and was ignored by its biggest fan, Alan Greenspan, who succeeded Mr. Volcker at the Fed.

Mr. Volcker recalled the “intense lobbying process” that had largely allowed markets to supplant banks as providers of funding with minimal regulation.

“In the U.S., the market took over,” he said. “The market has flopped.” When things got tough, he added, “everybody is running back to Mother, the commercial banking system.”

11:30 a.m. | Why Pay Bank Dividends?: The Danish bank-rescue decision mentioned below should be considered by American regulators. If ever a sector needed to hold on to its capital, it is the banking sector. Why should they pay dividends or repurchase stock? Investors are not fooled.

Halting stock option programs may not be as good an idea. But at least they should be changed to require that those cashing in options pay their own taxes, rather than have them withheld by the company in a transaction that amounts to a share repurchase. And regulators ought to ban repricing of options, or issuance of new options to replace hopelessly out-of-the-money options. The managements should not be rewarded for having driven their share prices down.

11:20 a.m. | Guarantee Everything: The Danes announced their bank rescue today, and it is interesting because it deals with the interbank lending market directly: The government is going to guarantee all interbank loans as well as deposits.

“The situation is regarded with great concern given the international market-failure where even healthy banks are having trouble getting access to liquidity. This threatens financial stability in Denmark and if unadressed may cause significant disruptions to firms and households.”

But the banks have reason to not be thrilled by this, or at least their managers and owners do:

“The scheme will run for two years with the possibility of an extension if financial stability concerns necessitate its continuation. The Parties stress that the banking industry must complement the safety by displaying a cautious approach and strengthening their balance sheets during the two year period. Therefore, the safety net is combined with a ban on dividend payments and share repurchases by banks as well as new stock options for management. Expiring stock option programmes must not be renewed or extended.”

8:43 a.m. | The Fed Is Worried: Now the government is talking about financing companies directly. If the banks and the markets cannot or will not do it, Uncle Sam will.

The Fed put out a statement this morning that said it would start paying interest on deposits and would increase the size of its Term Auction Facility auctions. Both are ways of getting cash out to banks.

But the banks are not lending very much, and the commercial paper market is in danger of closing up as investors seek safety above everything.

So the Fed added:

In addition, the Federal Reserve and the Treasury Department are consulting with market participants on ways to provide additional support for term unsecured funding markets.

The Fed added that it was prepared to do more “as necessary to foster liquid money market conditions.”

So we may soon have the government deciding which companies deserve short-term loans, and at what interest rates. Does this remind anyone else of central planning systems?

6:57 a.m. | Now What?: The scrambles in Europe last night do not seem to have impressed investors any more than Congressional passage of the bailout did.

As I write this, most European markets are down more than 5 percent for the day, after Asian markets closed with losses in the same range.

So what do the authorities do next?

One possibility is for Henry M. Paulson Jr., the Treasury secretary, to spend that $700 billion as fast as he can. That would make it even more difficult for the Treasury to really evaluate what it was buying, and make eventual scandal more likely, but there is desperation in the air.

More likely is that the central banks will swing into action with the move they know best — cutting interest rates. There could be a coordinated rate cut very soon, perhaps involving the Federal Reserve, the Bank of England, the European Central Bank and other central banks in Europe. The Bank of Japan is charging only one-half of a percentage point, but maybe they would go along to provide a sense of worldwide unity. Perhaps the Chinese would also join in.

The risk there is that it would not work, or at least not seem to work, and the chorus about “pushing on a string” would grow louder. But I doubt the central banks will be able to stand by if the market carnage continues very long. There is certainly enough economic weakness to justify action, and plunging commodity prices provide reasons to put aside inflation concerns.