And then – the market went up, or was it down, by 400 points


Chart forDow Jones Industrial Average (^DJI)

It has been very difficult this year to write about anything but social unrest and violence.  A new casino opening in Pennsylvania, another month of 14 percent unemployment in Nevada, drought and wild fires in the Southwest or unrelenting rains and floods in the heartland are very important events, particularly to the people living them.  Domestically, the economy has just crawled along, some good news and some bad news, but no real change.  The Congress was frustrating and annoying for us, but not life threatening.  None of the events that normally would be big news stories hardly compare to life and death events in the Middle East or this week the riots in London.  But things have eased a bit, at least for the moment.

President Assad in Syria said he may have made a mistake in using force – after nearly every country in the world threaten some kind of sanctions – but the tanks are still rolling – still he is promising to act differently.  The rebels in Libya have paused in their fight to overthrow Muammar Gaddafi and are spending more time fighting each other than Gaddafi; the president of Yemen has announced a plan to past the staff of power; and the Egyptian government, one day before the next Tahrir Square day, has decided to end the decades-long state of emergency.  The British government and the London police seem to be getting control of the country back; now  will begin an endless round of commentary on the causes and cures, but at least no one is injured or killed and nothing will burn in that process.

All of that ‘almost no violence’ news makes this as good as time as any to stop and look at our own economy.  A good idea in theory, but nearly impossible in practice.  What is happening on Wall Street?  The stock market has compressed a month or even a year’s worth of fluctuations into one week.  Wall Street has had some dramatic days before, but never in its history as has it had the consecutive swings it had had this week.  Every day this week so far, the DOW Jones average went up or down by over 400 points alternatively.  What do we know from the fluctuations?  Nothing – we did not learn anything; and here we have a very hard economic reality.  No one really understands the stock market – that does not mean some people do not know how to use the market to make money, many do.  But that does not mean they truly understand the market; Wall Street is a place of after-the-fact explanations.  No one can predict what will happen next in any specific sense.  But analysts are great a devising a reason for the past – tonight they are all waiting to see what tomorrow brings.  After the market closes tomorrow, they will have very learned explanations.  Scary, at least no one is dying because of it.

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