Wait? What was that?

Robert Reich saves me the trouble of scouring the 'net for articles explaining what happened yesterday on Wall Street:

At this point no one knows why. Some say it was sudden burst of worries about Greece's debt and the increasing possibility of a default that might cause a run by global investors. Others point to a "trading error." Giant high-speed computers generate millions of trades based on instructions embedded in computer programs designed to move fast enough to beat everyone else. So when there's a glitch in one of them it can immediately spread to all the other programs designed to move just as fast. Some say it was an erroneous trade entered by someone at a big Wall Street bank who mistyped an order to sell a large block of stock, and that the big drop in that stock's price (Procter & Gamble?) triggered "sell" orders across the market.

The newest explanation is that the yen did it, which makes as much sense as any other explanation. The truth is, of course, we don't know what happened; and may never know. Jim Cramer was taking credit for the rise in P&G stock even as it "rebounded" yesterday. He might as well. His explanation is as good as anyone else's.

Everyday we are inundated with reports both on the "stock market" (usually the DJIA) and why it is rising or falling. This usually resolves, by the end of the day, into a simple answer: the value of the dollar; the state of the economy in Europe; the latest Fed pronouncement; the latest speech by the President. It's all bollocks, of course, but it's reported as if the market were the Delphic Oracle and financial reporters were its appointed priests. They read the days chicken entrails and report to us on what message the great green God is sending. But no one knows why the market goes up and down, certainly not in real time, and no one knows why the market dropped 900+ points yesterday, or why Sotheby's was, briefly, valued at $100,000 per share (making it, as Rachel pointed out, worth the combined GNP of America and China).

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So what happened? Your guess is as good as mine; or Jim Cramer's; or the Motley Fool's; or Reuters. Nobody knows. Just as nobody knows why the market matters to any of us, anyway. We think it's because of the Great Depression, but the crash of 1929 was a symptom of a failed economy, not the cause of it. The stock market fell apart then because the mask finally slipped from the face of the economy, and there was nothing underneath it. Why do real estate booms fail? Because buyers lack confidence? Or because the music finally stops, and there aren't enough chairs to go 'round? Were our current problems caused because Wall Street collapsed? Or because it finally became apparent the emperor had no clothes?

The market rebounded quickly this time, once the Fed and the Congress pumped enough money into enough institutions. And yet the unemployment rate remains at nearly 10%. If I'm among the unemployed, what do I care what the market did yesterday? It means literally nothing to me. But what's interesting is how religiously the market is worshiped; how the state of the DJIA is followed, as if it means anything.

It's what I was getting at here. And it puts me in mind of the old saying that "A fool and his money are soon parted." Except that it's not just money that is soon taken from the fool; and money is not the worst thing anyone can lose.