Economics

Can We Shut the F Up About the "Biggest One-Day Loss in History" on the Dow Already?

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Are journalists, politicians, analysts, et al. really so retarded that they insist on leading all stories about yesterday's Dow with a patently useless measure? (The short answer is probably yes.). To wit:

Stocks plunge as House rejects bailout package: Dow absorbs biggest one-day loss in history: 777.68 points

Stocks plunged yesterday with the Dow Jones industrial average falling nearly 780 points—the biggest one-day point drop ever—after federal lawmakers failed to pass a $700 billion plan to bail out the financial system.

That particular formulation comes from The Baltimore Sun, but you've all read or heard countless variations on the theme. If this figure is not expressed in percentage terms, it is absolutely useless. Indeed, for most of its existence, the DJIA, couldn't have dropped 780 points because the index wasn't that high. Which of course reporters (and pols, and analysts, et al.) know, and always bury somewhere deeper in the story. To wit, from the Sun story mentioned just a few lines above:

The Dow's 7 percent decline was the 17th biggest percentage drop in its history, well below the more than 20 percent drops seen in October 1987 and the Great Depression.

Somehow "Dow absorbs 17th-biggest percentage drop in its history" just doesn't pack the same wallop, does it? More here.

NEXT: Wright Where It Belongs

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  1. Can We Shut the F Up About the “Biggest One-Day Loss in History” on the Dow Already?

    Why, no, we can’t. It’s an election year, dontcha know, and we need to accentuate that we we need “Change” at every opportunity.

  2. The Dow is 30 arbitrarily picked and constantly changing “major” stocks. Like, for example, AIG. Unless the pickers have injected meaning, it’s essentially meaningless except for all the historical hype.

  3. I thought scientist had scientifically proven with their science that conservatives were the bedwetting political party.

  4. No. We have to rend clothing, bang some gongs and shriek at the moon about it for a another week or so. Then they’ll get back to the rest of the shit that just doesn’t matter.

    Get with the program already, Nick. Our masters in the MSM have told you that it’s Very, Very Important. Get on the bus, Gus, or get off the team.

  5. The one-note doofuses on NPR were saying the same thing this morning, minus the context percentage-wise. The reporter also said that “lots of very respected economists” say we have to do something, without naming any of them (other than Bernanke himself) and without mentioning all the “very respected economists” who have said Congress should proceed very cautiously if at all.

  6. It’s not as irresponsible as saying old newsletters are new, irrefutable proof that a candidate is a Nazi.

  7. We have to do something. And as each day passes where we don’t do something, and the sky doesn’t fall, that just means that we have to do something even more urgently.

  8. News papers like the shock value they get by expressing the drop in absolute terms instead of percentage terms.

  9. And yesterday, the Chicago White Sox scored more runs than they have scored since September 28, 2008!!!

    And just now, Barack Obama’s poll ratings are they highest they have been since one hour ago!!!!!

    And the number of news outlets telling us that the Dow had its largest drop ever is higher than it has ever been!!!!!!!!!

  10. Couldn’t Congress just pass a law mandating that all Americans enter cryonic suspension for the next five years?

  11. Couldn’t Congress just pass a law mandating that all Americans enter cryonic suspension for the next five years?

    Only the genetically superior ones, ProL.

    KHAAAAAAAAAAAAAAN

  12. Epi, I have to admit to feeling some urgency lately…….

    also some difficulty starting and stopping. Do I have MBS? (also known as an enlarged pro-rate)or could it something more serious?

  13. Wait a minute.

    This is Reason Hit & Run complaining about *other people* writing punchy story ledes?

    Pot to kettle, come in please…

  14. Episiarch,

    I don’t think the genetically superior Americans got us into this mess. We offered the world order!

  15. Epi, I have to admit to feeling some urgency lately…

    Me too, but mine makes my pants tight.

  16. I noticed this morning, for as long as I could stand it, how much more strident and hysterical the chattering class is this AM with BIGGEST SINGLE DAY DROP IN DOW HISTORY!!!111!!!

    Do something NOWNOWNOW before the Dow rebounds and we look like puss-sucking chumps.

  17. THIS is Ceti Alpha V!!!

  18. We could use a leader like Khan Noonien Singh right now. I bet he could solve the economic crisis by brilliantly telling each of us exactly what we can do, spend, save, and say.

  19. JP –
    NPR newscasters are just as incapable as other newscasters of giving qualifying information. NPR uses the word “economists” just like they use “scientists,” implying ALL economists/scientists when it’s really just the group they’re talking about. Or they’ll be all like “coming up we’re going to talk to an economist who is actually AGAINST the bailout and find out that some Americans still believe in that market thing”

  20. The markets are calm today. Ordinary schucks who put their sell orders in yesterday wouldn’t have them executed until today. It seems to me that if this really was a panic, versus a readjustment, the market would have fell again today.

  21. “We could use a leader like Khan Noonien Singh right now. I bet he could solve the economic crisis by brilliantly telling each of us exactly what we can do, spend, save, and say.”

    Don’t worry Obama is on the way. As his wife says, he will expect you to sacrifice and rise above where you have been before. If you are looking for a “dear leader”, you just may get one in November.

  22. It is awful nice of financial Armageddon to wait until the high holidays are over. A sheynem dank!

  23. Obama’s not genetically superior. I’m not ceding all of my rights to anyone other than the product of a major eugenics program.

  24. Actually, I heard them state the percentage drop on NPR… although I don’t recall whether they put it into context. They didn’t cite 17th largest drop, certainly.

    There was a percentage, though.

  25. I’m not ceding all of my rights to anyone other than the product of a major eugenics program

    I’m here, ProL. You may cede those rights to me. My superior looks and intellect speak for themselves.

  26. “Obama’s not genetically superior. I’m not ceding all of my rights to anyone other than the product of a major eugenics program.”

    He may not be to you and I, but he certainly is to the lesser beings in the media. Can you send a thrill up Chris Mathews’ leg? Does Andrew Sullivan have orgasms while blogging about you? I didn’t think so.

  27. Please. You can’t even dominate this thread.

  28. Bronwyn, if you’re right, my bad.

  29. John,

    Why anyone would get giddy about virtually any candidate for national office is beyond me. Unless he says, “I come not to bring peace, but to bring a sword to Washington”, I don’t see much reason to get even a little excited.

  30. Was it false? How useless can it be ? It got you commenting on the story.

  31. Oh c’mon, yes there is some hyperbole but this still was a big event.

    I don’t like the bailout either but if holding it up is going to make the stocks tank then I say we pass the ugly thing and go looking for the heads (figuratively) of those who got us in this bad spot. Too much tanking will hurt us all, I imagine even those often found H&R posters who think of themselves as rugged individualists unconnected to economic currents who assume that in a dog eat dog capitalist jungle they would come out ahead will be effected too. They’ll be cooking beans with heat generated by burning pages of Hayek and Mises…

  32. “Why anyone would get giddy about virtually any candidate for national office is beyond me. Unless he says, “I come not to bring peace, but to bring a sword to Washington”, I don’t see much reason to get even a little excited.”

    Even then I wouldn’t trust them. The only politicians that get a rise out of me are the ones the media hates. The more the media hates someone, generally the more I like them. That is why I want to see Palin be President some day. I want the pleasure of watching everyone of those provential nasty ignorant assholes have to bow down and kiss ass to some soccer mom from Alaska.

  33. Somehow the idea of listening to the people who predicted this mess (that’s the Austrians) doesn’t come up in the media’s minds.

  34. I read the NYTs house ed last night (after finishing up an e-mail to my congressman that if he voted for this bill when it came back through the House he would lose my vote to his anti-abortion, family-values, country-club-douchebag opponent) and they repeated the line I’ve heard so often from the MSM about this being a market failure.

    I always thought that firms that embark on risky investments failing when those investments go sour is a feature of the market, not a bug. Am I wrong in that?

  35. They’ll be cooking beans with heat generated by burning pages of Hayek and Mises

    Some hyperbole indeed.

  36. Please. You can’t even dominate this thread.

    (slaps ProL in face with glove)

  37. MNG,

    Only if we agreed that this was truly an economic crisis of an ’11’. I don’t agree. I think we can endure this without a bailout. The market drop means absolutely nothing–it’s a one-day event. In any event, passing legislation to influence the stock market is a fool’s game.

  38. John, it’s rather provincial to misspell provincial.

  39. Epi, I suggest you throw him into the belly of the all-powerful Sarlacc.

  40. “The only politicians that get a rise out of me are the ones the media hates.”

    I think that’s terribly simplistic. Most journalists are very jaded and cynical types who probably lean left like most folks in the “New” or “Knowledge” class, but they don’t have much of a specific agenda they are pushing. Their bias is usually manifested through simple ignorance that folks different from them think differently.

    They “hate” Sarah Palin because they work day in and day out interviewing politicians and they can plainly see what the rest of the country is coming to realize: that she is not very bright. They don’t hate her as much as they are in disbelief that this woman is the VP nominee. It’s not a conservative hate, they like McCain plenty, as has been demonstrated by Reason writers over and over. But McCain can talk the talk and they respect that.

  41. Not if you spell it Proven?al.

  42. My belly is hungry but my hunger for my ideology is stronger, damn the bailout!

  43. I’ve been to Vietnam and Lebanon, and I can say without hyperbole that this is a million times worse!

  44. Has someone already mentioned that the dollar is up a bunch today?

  45. Epi, I suggest you throw him into the belly of the all-powerful Sarlacc.

    “In his belly, you will find a new definition of pain and suffering as you are slowly digested over a thousand years.”

    “Just like a bagel!”

    MAD Magazine was once funny, you know.

  46. of course the market is only up today because they expect a bailout. or maybe not. CNBC is struggling to make sense out of it. But it was epic financial porn yesterday when the bill didn’t pass.

    Thunderdome!

  47. Somehow “Dow absorbs 17th-biggest percentage drop in its history” just doesn’t pack the same wallop, does it?

    How long are the bread lines in your town?

    BTW, I went to the bank today. There was cash in the ATM, there were no lines of people frantically withdrwing their life savings and some fools were actually making deposits.

    The sky is not falling. I’ve read experts and pundits declaring that financial meltdown will be apparent if we don’t pass this bailout by last Friday. If they’re right we’ll have to ask these guys to fix it.

  48. “They “hate” Sarah Palin because they work day in and day out interviewing politicians and they can plainly see what the rest of the country is coming to realize: that she is not very bright.”

    And fucking Joe Biden, Nancy Pelosi, Barrack Obama and John McCain are? Give me a fucking break. I watched the Presidential Debate the other night and all I could think of was how easy it would be to clean the floor with either of them. Joe Biden doesn’t even know who was President in 1929. The man can’t give a speech without saying something stupid. Did you watch Obama at that church in Houston? I don’t think he ever had a introspective thought in his life. If the media had issues with dumb politicians, there would be damn few politicians left in this country.

  49. “MAD Magazine was once funny, you know.”

    Are you sure? I thought we were just younger and more easily amused.

  50. So you’re not accepting my challenge, then, Pro “Sissy Pants” Libertate?

  51. “I’ve done more than kill you. I’ve hurt you. And I wish to go on…hurting you. I shall leave you as you left me.”

    Oh wait, my bad. That was Boehner.

  52. It’s not a conservative hate, they like McCain plenty…

    Non sequitir.

    Has someone already mentioned that the dollar is up a bunch today?

    Yesterday too. I watched Deutsche Welle yesterday – it looks like Europe is going to have a harder time than we are. They were also talking about bailing out their banks.

  53. Ideology? Show me a lick of proof that the economy is actually in dire straits without a bailout. In fact, even if some bailout were necessary, is this particular bailout the one?

    Where’s the utility in acting without due deliberation and consideration, based on the opinions of people who seem to have no idea of how this happened or what we really need to do to get out of this? I think trusting those of us who actually make the economy work from day to day is a safer approach than giving more power to the idiots who’ve already proven their incompetence in things economic. Our economy needs less management, not more.

  54. Are you sure? I thought we were just younger and more easily amused.

    I could have been the paint fumes, I admit.

    That was Boehner.

    Boner. HUR HUR HUR

  55. BakedPenguin,

    The dollar is way up. I would like to have someone explain that. I find it hard to beleive that a country could really be facing a financial meltdown and have its currency rising. That makes no sense.

  56. John
    Joe Biden gave 57 press conferences in the time that Palin hid from the press. So yes, I guess if you talk about issues that much for that long you might misspeak some. But when you hide from the press and have only a handful of interviews and those few are full of gaffes and stupidity…The press are not stupid, they can smell blood in the water…They respect McCain because he’s a smart guy. They don’t respect Palin because she is none of the above.

    But hey John, let’s let the American people decide which one has the more brains and you can keep on believing…

  57. I would just like to point out that an actual retarded person would have been very unlikely to commit this particular offense. Thank you.

  58. “Why, no, we can’t. It’s an election year, dontcha know, and we need to accentuate that we we need “Change” at every opportunity.”

    The media would still be doing it if it wasn’t an election year.

    It’s all about hyping anything they can hype to get ratings.

  59. “Show me a lick of proof that the economy is actually in dire straits without a bailout.”

    “The Dow’s 7 percent decline was the 17th biggest percentage drop in its history”

    “Our economy needs less management, not more.”

    “The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub.L. 106-102, 113 Stat. 1338, enacted 1999-11-12, is an Act of the United States Congress which repealed part of the Glass-Steagall Act, opening up competition among banks, securities companies and insurance companies. ”

    We tried that. Didn’t work out.

  60. “I think trusting those of us who actually make the economy work from day to day”

    like lending institutions and insurance companies?

    Pro. I hate to break this to you, but you yourself probably make a very, very, very, very, small part of this economy work…

  61. “The media would still be doing it if it wasn’t an election year.”

    Retarded. What do you think the media should do about a 700 point drop? Put it on page 43 of the Style page? It’s a bit of a big deal fellas…

  62. “Biggest One-Day Loss in History”

    Perhaps the component stocks were overvalued. If the price of oil dropped seven percent, media wouldn’t be crying “Catastrophe!”, though it’s the same thing.

    Someone out there has to be interested in buying stocks for them to be worth anything. Why not cheer for the new bargains available? Are we to run in terror when Macy’s has a holiday sale?

  63. The news ticker on the bank across the street says “Gold down, dollar soars on hopes of bailout plan.”

    Right.

  64. Has someone already mentioned that the dollar is up a bunch today?

    Oil prices are up after a decline yesterday too. Looks like the sky will still be overhead tomorrow even without a bailout of investors in the mortgage market.

    Who’d have predicted that?

  65. John, the only thing I can think of is that the rest of the world thinks were going to stop buying their stuff, and the outflow of dollars will slow greatly.

    Also, oil had a huge drop in price yesterday.

  66. “socialism, creeping socialism…commies…Federal Reserve, that’s what it is!”

  67. MNG – How about, DOW DROP 17TH BIGGEST IN HISTORY! in “Man Lands on Moon” font?

  68. MNG: More regulation sure worked for Cuba.

    See how dumb that argument is?

  69. Why is everyone so scared of a contraction? The economy has been over-heated for the past 5 years. Instead of an “oh, it was artificially held up in an unsustainable manner? That sucks. I guess I’ll have to go back to still having one of the highest standards of living and the most freedom in the world”

  70. I didn’t finish that last thought.

    Instead of yada yada yada…, why are people going ape-shit when they have to pay back some of the excess?

  71. “MNG: More regulation sure worked for Cuba.

    See how dumb that argument is?”

    And less government sure has worked for Somalia, of for that matter the US in the 1920’s. See how dumb THAT is?

  72. MGN – That would certainly be a dumb thing to say, though perhaps not for the reasons you’d like it to be.

  73. I am astonished how so-called “liberals” want to bring about a giant merger of Economy and State. I never thought I’d see the day that progressives want to bail out big banks.

    The world is certainly on its head lately.

  74. The media would still be doing it if it wasn’t an election year.

    It’s all about hyping anything they can hype to get ratings.

    While I would agree in binary terms, in relative terms, not to the extent that they are. BO started with this “Change” silliness, McCain has hijacked it somewhat, and somewhat successfully. Therefore, regardless if you believe the media bias (I personally see a left leaning bias towards most of the media, the reverse in talk radio and Fox, but that is immaterial) to be one way or the other, it still behooves them to scream “fire, and the theater is crowded!” as much as possible.

  75. did you rtfa?

    Other indicators also fell. The Nasdaq dropped 199.61, or 9.14 percent, to 1,983.73, the eighth largest point decline and the third biggest percentage fall in its history. The Standard & Poor’s 500 index declined 106.59, or 8.79 percent, to 1,106.42. It was the S&P’s largest-ever point drop and its biggest percentage loss since the week after the October 1987 crash.

    As to the DJIA (date/close/change/%):

    1 12/12/1914 54.00 -17.42 -24.39
    2 10/19/1987 1,738.74 -508.00 -22.61
    3 10/28/1929 260.64 -38.33 -12.82
    4 10/29/1929 230.07 -30.57 -11.73
    5 11/06/1929 232.13 -25.55 -9.92
    6 12/18/1899 58.27 -5.57 -8.72
    7 08/12/1932 63.11 -5.79 -8.40
    8 03/14/1907 76.23 -6.89 -8.29
    9 10/26/1987 1,793.93 -156.83 -8.04
    10 07/21/1933 88.71 -7.55 -7.84

    Another 100 pts would have put the dow in top 10 % drop. You are taking the moves in the equity market entirely too lightly and you appear to have even less understanding of the situation in the credit market. We are well past the ‘let them all die’ option.

  76. Reinmoose,

    Lots of people prefer constant misery to sudden, unexpected pain. That’s the terrible thing about cyclical growth: there are huge swaths of the population who would give it up without a second thought for a guarantee against uncertainty–in a word, stagnation.

  77. We are well past the ‘let them all die’ option.

    Why? because the numbers are high? That doesn’t follow.

  78. TAO
    I thought that’s what liberals wanted from all the rhetoric I hear around here?

    Look, as I said above the bailout is a terrible thing. But a financial collapse is a worse thing. I don’t think do nothing is a good response right now and I think people who would cling to an ideology that would lead to a financial collapse are thinking in a very silly and perhaps dangerous way.

    If there is better alternative that can be passed and head off financial problems I’m all for it. But if we have to swallow a crappy bill to prevent that then we should just man up.

  79. GLB didn’t cause this mess either. Honestly, why are people throwing around the repeal of certain provisions of Glass-Steagall like that magically means something? The big fly in the ointment for people tossing this deregulation canard into the conversation is that few banks took advantage of the liberalized rules. Even Citigroup ended up getting rid of Travelers. Bah.

  80. MNG: So you can find examples where no regulation fails, where full regulation fails, and where some regulation fails. Are we just doomed to fail?

    Or maybe there are other things that help to determine success?

  81. “But if we have to swallow a crappy bill to prevent that then we should just man up.”
    Weren’t some folks saying the same about the Patriot Act and terrorism?
    Oh, wait. The country is still in one piece. I guess the Patriot Act worked.

  82. Wall Street Celebrates Congress’ Affirmation of Markets With Biggest One-Day Sale Ever!

    [in smaller type]: This won’t be as big as percentage mark-downs available to shoppers in the past, but they did pick the lucky “777” amount for marketing reasons.

  83. We just need the right folks in charge, adrian.

  84. I think people who would cling to an ideology that would lead to a financial collapse are thinking in a very silly and perhaps dangerous way.

    I would agree with you for the first time ever MNG, but I’m afraid we probably disagree on who holds that dangerous ideology that would lead to financial collapse. That’s rather the whole point. Or are you just screaming “partisan!”?

  85. Citizen: heh, i nominate political jesus of course. i don’t trust political allah.

  86. Excellent point, Nick.

    Better down 700 points than be on the hook for 700 billion.

    The market is rebounding anyway (the Dow regained 37% of yesterday’s loss this morning). Even if it took a week or a month or 6 months, it would not justify intervention on such a massive scale.

    Mark Foley’s replacement, Tim Mahoney, was claiming his constituents were all opposed to the bailout before the bill failed and somehow they’re now all for it. I don’t buy it.

    If I had read your column before I wrote my letter to him I would have included that point about the hyped headlines.

  87. Now, we can all get through this thing if we just stick together!

  88. Reinmoose, it’s the same thing you hear from Famous Mortimer, Edward/Lefiti, etc., except addressed in a more intelligent and respectful fashion.

    “Libertarianism is a religion” blah blah.

  89. How about some really radical change, like true deregulation of the markets?

    Huh? Huh? Did I miss that in the thread?

    Is there no room for anti-authoritarianism left here?

  90. Guy,

    I’d love to have that debated, but the left’s cries that deregulation caused all of this makes it unlikely than Congressional Democrats would support anything remotely like deregulation. Stupid Republicans don’t want deregulation, either, for that matter.

  91. Didn’t you hear, Guy? George W. deregulated everything years ago. Why do you think we’ve got this mess on our hands?

  92. MNG, sweetie, you are worng:

    1) Somalia was better off stateless. Their standard of living improved under anarchy.

    2) The 20’s were not unregulated free markets, but the product of poor monetary policy in the first two decades of the U.S. central banks attempts to “manage” the economy (If nothing else, read Chapters 1, Chapters 5 through 6). Please note that the Great Depression only ended int he late 1940’s when the regulations of the 1930’s were considerably scaled back. That’s no accident (and no, the war had nothing to do with it, other than its role in hastening FDR’s death -> tanks, bombers and aircraft carriers are neither consumer goods nor capital equipment).

  93. Look, as I said above the bailout is a terrible thing. But a financial collapse is a worse thing.

    is it? How exactly? There is still zero evidence that we’re heading for a “financial collapse.” So far, this is a correction. A massive, erection-wilting correction, but a correction of an inflated market just the same. Think of it as a big summer storm, flushing all the dirt and shit into the sewers.

    When the pro-bailout folks can come up with something more than ZOMG!!! Its collapsing!!! The sky is falling!!!, then maybe we’ll take the rhetoric a bit more seriously.

  94. I KNEW this would happen!

  95. BakedPenguin, regarding your point about libertarianism = a religion;
    There’s a guy on another thread this morning who said something like “Free market are your hammer and the world is like a nail to you.”

    Free markets = hammer.
    There’s some delicious irony, there.

  96. tarran: no need for facts here, we have our gut to go by.

  97. I see the free market more as a sickle.

  98. I don’t believe in the “no win” scenario.

  99. Citizen Nothing –
    maybe he means it like Mitt Romney means it, where he insists that by requiring everyone to buy health insurance and subsidizing some with Medicaid they are “using the free market.” That is indeed a hammer.

    How libertarians mean it, we expect that if the nails need to be hammered down that someone will hammer them down.

  100. It’s not as irresponsible as saying old newsletters are new, irrefutable proof that a candidate is a Nazi.

    Has that happened this year?

  101. I always thought that firms that embark on risky investments failing when those investments go sour is a feature of the market, not a bug.

    To hear it from the MSM, free markets are supposed to guarantee success.

  102. OK, now for some serious editorializing. There’s this meme out there — and I also see it as a minority view in HnR comments — that the free market may be all fine and well during ordinary times, BUT DAMMIT! NOW IT’S AN EMERGENCY! Principles must be abandon!

    I can understand the argument that free markets are a bad principle, or more government oversight was needed. I disagree with these, but I can see their intellectual integrity.

    There is even a point to saying, well you understood free markets within this confined range, but now we are outside that range, so you have to reconsider your beliefs.

    What puzzles me is that anyone would think that principles are for the easy parts of life, and once things get tough… I don’t know. You act randomly? You do whatever the speaker demands? You hand over your critical judgement to the Chairman of the Fed?

    If people really think that way, I can understand why the current situation is terrifying.

    Let us imagine a young man who is raised by his parents to moderate his behavior; to live some kind of moral life. Now, imagine that he comes to his father and says, “Dad, I’ve been on a drunken bender. I stole the neighbor’s car, ran over someone’s pet dog, and I got one of my teachers pregnant.”

    Dad responds: “Son, we’ve warned you about these things, and have tried to steer you on the right path. But now that you’ve gotten to this point, all I can say is, ‘well, fuck it.’ You are just going to have to lie and cheat your way out of this, and use violence where necessary. And, I want you know that I love you and I’ll help you every step of the way.”

    Would that strike you as… odd, somehow?

    I kind of get that feeling when people say, “a lot of comfort Hayek will give you in a bread line.” I don’t know how comforting it will be, but it will still be correct. I would not see how acting in a way contrary to how you thought the world worked would be advantageous at that point.

    More perplexing is the “I was with you guys up until now, but now is the time to freak out and do the opposite of what we used to believe, right?”

    I guess maybe what that means is that there are some who believe a free market is one that always produces a pleasing outcome in whatever time frame the believer is concerned with. I don’t know what school of economics that is, but it’s not “free markets”.

    Maybe we need to co-opt the Christian bumper sticker: “Free Markets Aren’t Perfect, Just Self-Correcting.”

  103. When the pro-bailout folks can come up with something more than ZOMG!!! Its collapsing!!! The sky is falling!!!, then maybe we’ll take the rhetoric a bit more seriously.

    A lot of money is locked in securitized mortgages.

  104. PL & CN,

    Ah, yea, forgot about those details.

    How about negative regulation? You know, since we are in an unregulated market now we can make even less regulation since the ‘zero’ point is about 150,000 SEC regulations, plus all that banking crap to keep small banks around, and big banks around, etc., when we go below that level would it be negative regulation?

    Second point: why does every freaking discussion involving a Leftoid spin into 1984 speak?

  105. “Free Markets Aren’t Perfect, Just Self-Correcting.”

    A better quote would be:

    Except for all the rest, the free market is the worst economic system.

  106. Look, as I said above the bailout is a terrible thing. But a financial collapse is a worse thing.

    This assumes that the bailout would prevent a financial collapse. I’m not sure that is the case. If we are on the the brink of catastrophe because of structural flaws in our financial markets, then a bailout that addresses none of those flaws will not prevent a financial collapse, but merely postpone it.

  107. RCD,

    This assumes that the bailout would prevent a financial collapse. I’m not sure that is the case.

    But it is a ‘perfect’ excuse for those who want to nationalize financial institutions to pass about the wealth of others to those who “deserve” it more.

  108. Expressing market changes in absolute terms rather than percentage terms is mileading. Even so, here is a headline from me, just for fun.

    Congress takes a holiday. Dow Jones increases 240 points. Change is 60 times greater than the 38 point drop known as the Crash of 10/28/29. It is also 80 times greater than the 30 point drop known as the Crash of 10/29/29.

  109. Since no one knows anything about history, people like Mr Niceguy assume that the financial collapse caused the Great Depresson. That is not what happened. Yes, the drop in stocks started it, but protectionism and idiotic monetary policy turned a recession into the great depression. Protectionism is a danger but nothing like Smoote Hawley and we are not suffering from deflation. Further, the credit markets are a lot more diversified than they were in 1929. Banks are not as important as they used to be. Like I said above, if credit runs out, take the $700 billion and inject the surviving banks with capital.

    Let these companies die and then have more productive and smart sectors of the economy buy remants and rebuild. The bottom-line is that there is a lot of “wealth” out there that is nothing but paper wealth in home equity and worthless MBSs that needs to be absorbed. There is no way around that. I don’t see how the tax payer absorbing it with all of the inflaitonary and debt consiquences that go with it is somehow preferable to the people who have the wealth absorbing it.

  110. John,

    Stop that! I was just beginning to think of the Polar Bears and poor people who will all die without the help of the US federal government!

  111. Pretty obvious that the MSM has lost all credibility to report with any knowledge or insight. As the Sun actually knew the percentage drop, they were either too stupid (I don’t think so) or simply wanted to goose circulation with false drama.
    We’re gonna have a recession, probably severe, and thats unpleasant. We bought things we can’t afford. The sun will rise, you can get drunk and have orgasms. Life goes on…

  112. “you can get drunk and have orgasms”
    Not me. Well, at least not in that order.

  113. It took us this long to get to a SMOOT HAWLEY invocation? Amazing. SMOOOOT!!!

    I don’t think libertarianism is a religion. Most libertarians I know and that are on this blog are very bright. But there are some who try to get far, far too much out the market and treat it like it’s magic.

    And then there are some who approach issues with unfalsifiable positions. For example, since there has NEVER been a “TRUE” free market, then if there is any economic downturn that seems rather obviously to be connected to a decrease in intervention/increase in reliance on “market forces” then you simply have to snoop around and find the relevant government interference that existed at the time and then fashion an after the fact “just so” story and viola, you can ALWAYS blame any woe on the interference.

    So it doesn’t matter that the 1920’s were a time of COMPARITEVELY less government intervention that wrapped up with a financial crisis, it was actually some aspect of the RELATIVELY small amount of government interefernce that was the ACTUAL cause of the following crisis. Or what happened was that while there was LESS government intervention then compared to times when the economy flourished, it was that the less intervention did not go FAR ENOUGH.

    My point is that this is exactly how diehard Marxists argue. The Soviet Union did poorly because they did not go FAR ENOUGH in instituting communism, and we can find some capitalistic aspect of their plan which was REALLY the cause of the failures.

    TAO quoted from Russell Roberts the GMU prof the other day. That guy was on NPR talk of the Nation with Jim Wallis the other day and he plainly and unequivocally stated that the fault for this mess was “in part” the poor decision making of “financial institutions” and in part bad government interventions and decisions. Why some of you cannot admit this is beyond me and is so absolutist (no private actors are to blame for ANY of this) and frankly yes comes off as a bit religious….

  114. It’s a bit of a big deal fellas…

    No, it isnt. Now a 20% drop, that will get my attention – for about 2 minutes.

  115. “TAO quoted from Russell Roberts the GMU prof the other day. That guy was on NPR talk of the Nation with Jim Wallis the other day and he plainly and unequivocally stated that the fault for this mess was “in part” the poor decision making of “financial institutions” and in part bad government interventions and decisions.”

    You are right. This did result from a bunch of dumb decisions by financial people. That is why they need to go broke. One of the real downsides of a bailout is the moral hazard of letting these people get away with their stupidity. Do we really want the lesson to be “just fuck up really big and the government will bail you out”? I don’t think so.

    It is irresponsible to start talking about how this is “the great depression all over again” when things are so different in so many ways. Yeah, we may a recession, a real good one for a few years while the assets are properly valued. But at the end of that people will go back to lending money to people can actually repay it and adopting sound financial positions rather than ponzi schemes disguised as real estate booms. You damn right the decisions of people in the market are responsible for a lot of this and as they say the market is a harsh mistress.

  116. 10701.80 +336.35 (3.24%) Sep 30 1:47pm ET

    If we don’t immediately pass this bill …

  117. “Do we really want the lesson to be “just fuck up really big and the government will bail you out”? I don’t think so.”
    No we don’t, I agree, but if it will bring general and widespread harm, then I’m willing to do it.

    “It is irresponsible to start talking about how this is “the great depression all over again” when things are so different in so many ways.” You’re right, we have many sound programs like FDIC and such in place now.

  118. No we don’t, I agree, but if it will bring general and widespread harm, then I’m willing to do it.

    So, we don’t, but we do? At some point, you either completely void responsibility or you do not. You cannot have it both ways, MNG.

    Speaking of FDIC, look for Bush to expand it in the coming weeks to mitigate the failure of the bailout.

  119. MNG –
    It sounds an awful lot like negotiating with terrorists if you ask me.
    “If you don’t meet our demands, something really really bad will happen to you and all that you love, but we can’t tell you what that will be.”

  120. Perhaps by the end of the week the new bill will be full of electric cars and a pony? You know, to save the planet since we ‘must’ save the banks.

  121. it is additionally fascinating to me that liberals are willing to give the Bush Administration and possibly a McCain administration such widespread control of the economy.

    Guys, it was bad with PATRIOT Act. It was bad with Iraq. What gives? Haven’t you learned yet?

  122. MNG: Booms and busts are part of the business cycle that all capitalists embrace. we know there will be good times and bad times, good investments and bad investments. The problem is when government tries to make all the times good you end up getting really terrible bad times (like the great depression).

    Bad decisions should not be rewarded. Taking risk must include a chance of loss.

  123. What is the widespread harm? The big banks who got into MBS and such are going down. The small ones probably won’t. The bottom line is there are still lots of good credit risks out there and people are going to want to lend them money.

    Let me speak harrasy here for a second but recessions fullfill a purpose. They wipe out the speculators and refocus energy into more productive areas of the economy. We have had all of this economic growth but a lot of it has come from a housing bubble and bullshit. All of that money that has been spend on MBS could have been and should have been spent elsewhere. Why not just take our medicine and come out on the other side better off?

  124. Taking risk must include a chance of loss.

    But think of the little children!

  125. What about 40 acres and a mule for everyone? That would appease descendants of slaves and the rest of us. I don’t need a mule, but 40 acres would be nice.

  126. I love how everyone talks about the “worse case scenerio” of not doing a bailout as if the fed printing out $700 billion or so in liquidity has no downside whatsoever. No, none at all.

  127. “News” organizations thrive on sensationalism, not rational reporting.

  128. I’d sacrifice a decent portion of my savings to see the investment bankers and their credit rating enablers in court. This is once that I’d cheer for the plaintiffs bar. Do they offer stock?

  129. I might join a shareholders’ derivative suit against the management of Washington Mutual. I want my two dollars!

  130. Pro Libertate | September 30, 2008, 2:14pm | #

    What about 40 acres and a mule for everyone? That would appease descendants of slaves and the rest of us. I don’t need a mule, but 40 acres would be nice.

    Hey now!

  131. In a real way, the govt. regulations put in place before this market break are at least as much its cause as the overreaching of those speculating in the MBS market.

    The very fact that Fannie and Freddie were govt.-supported institutions seduced the other actors into sloppy methods and even actual malfeasance when originating loans. Some of those bad loans were even encouraged by the govt. – Community Revinvestment act rules, frex.

    “Don’t worry, the Feds won’t let us fail” is a pretty bad recipe for establishing a market.

    Kevin

  132. kevrob did not say CRA. Please forget what you think you saw. No need for CRA fights since he didn’t say that. We have always been at war with Eurasia.

    thanks

  133. Sorry, JW. Didn’t know that you went there first. I should’ve, since I participated in that thread, but I was busy fantasizing about the $700 billion that I had proposed that the government give to me.

  134. No worries, Pro Lib. Great minds and all…

    I’ll be your friend if you give me a billion.

  135. A billion might be a bit much, but if I get $700 billion, I may give away millions at a time. Why not? It’s for America.

  136. So the Dow is up 485 today? Isn’t that, like, the second biggest point gain in history or something?
    STOP THE FUCKIN’ PRESSES!!

  137. Sorry – third largest point gain.
    Still, tomorrow’s headline:

    DOW FUCKING SOARS!

  138. I’m celebrating in the streets with mad abandon.

  139. No, no CN, you’ve got all crabbed:

    DOW STUMBLES: DOWN 292 POINTS FROM FRIDAY CLOSE

    or

    DOW GROWTH BELOW EXPERTS’ PREDICTIONS
    ECONOMIC DISASTER LOOMS AS INVESTORS PANIC

  140. The DJI has changed exactly -0.03% in value in the last five days. Can we stop panicking now?

  141. I heard a talking head on CNN International express the drop in terms of a dollar amount and say that the amount was greater than the $700 bil amount in the bailout plan.

    I just about yelled at the TV. By what standard can you compare the two?

  142. The MSM sucks.

    Anyone who gets their news from tv, newspapers, and magazines is a moron.

    Lou Dobbs was running that crap too. If things do really hit the crapper, I hope someone parks a few truck bombs next to big media outlets. They should be held responsible for cheerleading bad news for the increased ratings.

  143. I stand corrected. The WaPo didn’t have a headline *anywhere* about one of the largest single day gains in Dow history. Not even in the Bidness section.

    But, they did have a cute little chart with arrows below the fold.

    Those fucking scare-mongering whores.

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