The heads of all the exchanges staged a conference call with the assembled commissioners of the Securities and Exchange Commission in Washington, and for the first confused ten minutes all the voices demanded answers to the same questions that the others were simultaneously asking. Nothing at all was accomplished. The government officials requested information and updates, essentially asking how close the herd was to the edge of the canyon, and how fast it was approaching the abyss, but not contributing a dot to the effort to turn the cattle to safety. The head of the NYSE resisted his instinct to shut down or somehow slow down the trading. In the time they talked—a bare twenty minutes—the Dow dropped another ninety points, having blown through two hundred points of free-fall and now approaching three. After the SEC commissioners broke off to hold their own in-house conference, the exchange heads violated federal guidelines and talked together about taking remedial action, but for all their collective expertise, there was nothing to be done now.

Now individual investors were blinking on "hold" buttons across America. Those whose funds were managed through banks learned something especially disquieting. Yes, their funds were in banks. Yes, those banks were federally insured. But, no, the mutual funds the banks managed in order to serve the needs of their depositors were not protected by the FDIC. It wasn't merely the interest income that was at risk, but the principal as well. The response to that was generally ten or so seconds of silence, and, in not a few cases, people got into their cars and drove to banks to get cash for what other deposits they did have.