The Crash of 2008 crushes stocks in a wild last hour of trading. The Dow’s loss tops 7%; the S&P 500 drops 7.6%. Investors flee markets, skeptical that fixes to the credit crisis will work. General Motors shares collapse on fears it won’t survive.

A key event appeared to be news that General Motors (GM, news, msgs) was facing a new downgrade by Standard & Poor’s. The stock was at $4.76, down 31%.

“There‚Äôs no safe place to hide,” Jon Najarian of OptionMonster.com, told CNBC.

The selling actually caused oil prices to fall in after-hours trading. Crude was at $84.78 at 3:20 p.m. Crude had closed at $86.59 in regular trading, down 2.7% on the day. Some analysts believe crude will fall under $80 soon. The Organization of Petroleum Exporting Countries is concerned enough that it has called a Nov. 18 meeting, possibly to cut production to boost production.

The sell-off came after news that Treasury Secretary Hank Paulson will reportedly use his new authorities to buy direct stakes in U.S. banks to help restore confidence in the markets. Investors, however, didn’t seem convinced.

Investors want immediate gratification from the measures the Federal Reserve and Treasury have taken to stop the bleeding in the financial crisis, but several traders are urging patience, saying that it will take time for results to work their way into the financial markets and actually boost confidence.

Short-selling will be allowed once again today after a temporary ban by the Securities and Exchange Commission expired at midnight.

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