For a while yesterday I felt like the market was finally hitting the bottom, and so I wasn’t surprised to see the recovery late in the day. I still feel that way, based on pure tremors in the air, nothing rational.

But world governments are in a terrible bind. Things have been moving much too fast. They need to point their guns at where the target is going to be, or better yet, at the next target. Instead, they keep shooting at where the target is. That’s the case with the $700 billion bailout, aimed at the distressed assets of financial companies. By the time it passed there were many more endangered species, to mix metaphors.

The danger is that if they shoot ahead of the flight, extrapolating into the future, they risk highlighting targets other people hadn’t thought of yet. They may need to do something so drastic that all potential targets are safe. The possibility of taking equity positions in many classes of threatened companies may help, but the air of desperation about that has its own dangers.