Another part of the problem: Many traders, including a number of high frequency trading firms that normally make up 60% of daily trading volume, stepped aside and stopped buying, draining liquidity from the system when it was trying to deal with a tidal wave of sell orders.
The federal government stepped in Sunday night to bail out Citigroup and restore confidence in the financial system, promising to protect the banking giant against losses on hundreds of billions of dollars worth of troubled assets.