Stock Market Crash

 Posted by on January 22, 2008  Add comments
Jan 222008
 

What about all this talk of the stock market? There’s no escaping it, is there?

Turn on your radio, and there will be somebody explaining that the trend in share values is downwards. There’s a surge in the Japanese Yen. Interest rates are going up. America is heading for a recession.

Listen to the way they talk about it. You’d swear they were meteorologists studying the weather. You’d suppose they might be cosmologists gaping at the nameless abyss of the galaxies. You’d imagine they were discussing some immutable natural force, bound by the laws of physics and chemistry, united by the eternal subtle and beautiful language of mathematics. That’s what you’d imagine, isn’t it, if you listened to these economists?

The natural order.

The power of the Universe.

Truth.

But it’s not. It isn’t the weather. It isn’t gravitation. It’s not spiral nebulae swirling their relativistic ever-expanding dance across the void.

What drives these rates up and down, what makes the Yen surge or the dollar recede, what brings poverty to Africa and smaller houses to Europe is not some profound, primeval and pristine law of nature. Newton wrote no Principia in its honour and conceived no calculus to describe it. Nor did Leibnitz. Einstein wrote no coda to the music of either.

It isn’t Nature that changes share values. It isn’t physics, nor chemistry, nor even the strange underlying chaos that dances beneath everything.

It’s greed.

It’s fear.

It’s war.

And most of all, it’s stupidity. The stupidity of mankind, which no science can explain.

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(I was going to write something about the current crash, when I realised that I’d written it already, a year ago. So why bother? This is just a re-print of last year’s post, and I’ll probably put it up next year as well, and the year after that … )

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Elsewhere:

Mr Darwin had an interesting post on the Federal Reserve a while back.

  18 Responses to “Stock Market Crash”

Comments (18)
  1.  

    Bock, I hate to point the finger of blame at anyone for the current crash. Could it be the Scientologists gaining revenge for the mocking of Tom Cruise, Fianna Fail, The Church or even the meeja?
    Nope, I just think the whole world was hungover and off sick from work yesterday after the Munster win. Once the head clears this whole stock market thing will right itself again. That is until after the Gloucster match. Hedge fund manager, you have been warned.

  2.  

    Damn fucking right. Actually it’s just greed, fear is the greedy seeing the writing on the wall, war is the greedy using horrendous means to line their pockets. Like me granny used to say, money is the root of all evil.

  3.  

    Its a convenient way of also taking peoples mind off the current Iraq distraction.
    They swap these 2 around alot you will notice..
    Iraq hasnt been in the news in a big way,bang RECESSION..for 2 weeks then oh the economy is recovering ,the masses see a silver cloud then Boom.”Al queda plot foiled,thousands of lives saved”….
    Keep people afraid ,you keep them under control..
    Always have an enemy (but one you can control) and people will do there shoppingin Tesco’s vote for thieves and War mongers and buy cars…
    Im saying anything new here but it seems like the big picture is eluding the masses.Does the media have anything to do with this i wonder?,,surely not..

  4.  

    Great book on the subject: – “Fooled by Randomness” – Naseem Taleb. He grew up in a war zone and worked on Wall St. so he knows quite a bit about both.

    Simple checklist for thr worried middle classes:
    – Are you healthy?
    – Are you children healthy and getting an education?
    – Do you have a home to live in?

    If you can answer yes to the above, then ignore economo-babble. Just carry on as normal and you’ll be just fine.

  5.  

    I have a theory that the economy only tanks when there is an unpopular sitting president.

    See Bush’s 1 and 2

  6.  

    On the news this week out here they’re running a series of reports called Hard Times with the letters on the title all cracked and decrepit looking. It’s as if the media want to scare us into a recession so they’ll have something to gravely report on.

    Consumer spending supports 3/4 of the economic growth in the US. I’m no economist but does that figure not seem wrong to anyone? Especially when it’s much of that spending is going on the plastic never-never and personal bankruptcy levels have never been so high?

  7.  

    We buy our shiny toys and foreign holidays on the promise to pay tomorrow. Then we get to a point where we realise (eventually) that we can’t keep doing that forever and we stop doing it for a while. Then we start all over again…

    So what. It’s old news, for old grey boring fart economists.

    I’m going for a pint.

  8.  

    Of course, it might just be because the value of shares is inherently volatile because the future profits of companies are very unpredictable. But such explanations won’t be favoured by people who like to pontificate about the greed and stupidity of mankind.

  9.  

    Warren, where did you get that nonsense?

    It has absolutely nothing to do with the profits of companies in the future.

    It all came from greedy American bankers giving mortgages to people who could never possibly repay them.

  10.  

    Amen, Bock.

    Added to that I would simply state that one cannot (as Wall Street seems to expect) sustain perpetual growth.

    Why is GE selling GE Money? The same thing. Here’s to potentially being out of a job!

  11.  

    Maybe Bushs recent groveling to the Saudis to increase oil production will turn things around, or his offer of satellite-guided smart bombs to the Saudis to deal with Iran might turn things around more.
    http://www.bloomberg.com/apps/news?pid=20601087&sid=aM.skMXbD0KQ&refer=home

  12.  

    No president will ever have the balls to go after the Saudi’s. They own too much of the United States govm’t as is.

  13.  

    Not just greedy American bankers but greedy American healthcare corporations. How many people took out those mortgages they couldn’t possibly pay back because they don’t have insurance and there is no national health care and it was the only way they could pay for their cancer treatments? All they had was their house and they’ve lost that too.

  14.  

    Jesus, is that it?

  15.  

    Not all of it but definitely part of it. I don’t think it’s possible for any president to bring in national health care. Too many profits involved for private health care. And people get desperate, have to take out second, third mortgages.

  16.  

    Alberta – I have to agree. There is wayyyy too much PAC money that the pharma and insurance industries pump into DC for any significant change to occur.

    People do get desperate and look for any means they can to pay their bills – medical bills are the second highest reason people file bankruptcy.

  17.  

    Yes, Hillary made a fine job of reforming the healthcare situation when her husband appointed her health czar ten years ago. now she’s happy to take lots of health insurance industry money to fund her election campaign. If this is what the so called liberals are up to, we’re all fucked.

  18.  

    People benefit financially from all sorts of evil things in the world, such as war. Even good ppl. Of course she would accept money from health insurance companies, well I wouldn’t see the likes of her refusing money from anywhere.
    She seems full of crap to me. Her recent tears of sincerity did nothin for me.
    Obama seems very genuine and was against the Iraq war from day one, unlike Hilary.
    Hope he doesn’t get assasinated or anythin though.. he has high ideals.

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