On second thought . . .

The rally in stocks didn't last long at all, did it? From MarketWatch:

U.S. stocks on Tuesday staged a broad retreat, pushed down by a drop in the price of crude oil, which fed worries of a global economic slowdown, and intensifying concern about Lehman Bros. Holdings Inc.'s ability to raise capital...

Rekindling concerns about the impact of the credit crisis, shares of Lehman Brothers Holdings Inc. plunged 44.6% after hopes of a capital injection from Korea Development Bank were dashed. See more.

After chalking up its largest one-day gain in a month, the Dow Jones Industrial Averagenearly wiped out the prior day's gains, dropping 280.01 points, or 2.4%, to end at 11,230.73, with 24 of its 30 components finishing in the red...

The S&P 500 fell 43.28 points, or 3.4%, to 1,224.51, while the Nasdaq Composite declined 59.95 points, or 2.6%, to finish at 2,209.81...

Crude-oil futures dropped nearly 3% to close at their lowest level since April, with crude for October delivery off $3.08, or 2.9%, to close at $103.26 a barrel on the New York Mercantile Exchange. Read Futures Movers.

Overseas, Asia stocks fell, with the Nikkei 225 slipping 1.8% in Tokyo. See Asian Markets. Europe stocks failed to hold early gains, with the pan-European Dow Jones Stoxx 600 index finishing 0.6% lower. Read Europe Markets.

Economic data for the day weren't exactly supportive either.

Stock indexes churned around earlier in the session, after the National Association of Realtors reports its index of pending home sales fell 3.2% in July from the prior month. Read Economic Report...

Separately, the government said U.S. wholesale sales fell 0.3% in July after a 3% climb in June.

In fairness, the US government's action on Sunday will probably help to attenuate the damage on the economy but will probably not stop markets from continuing their descent.

Seen from that perspective, it -- and other government actions to prop up the economy -- may actually be bad for investors (or homebuyers in this case) because they mostly indirectly slow down the declines in markets and draw investors into buying on the way down. As Martin Wolf says, "offering subsidised finance in a market that is beginning to fall, when one has no idea of the floor, is tantamount to debauching financial minors".