Wall Street

[Ragoczy]

Keeping in mind a little perspective about the problem, the Dow dropped 777 points today -- I'm sure everyone's heard it reported as the "biggest point drop in history" and the media's just loving to report it that way. But it was a 7% drop -- the 1987 drop was 30%, but to listen to the pundits, this was worse. Why?

[MMI]

Keeping in mind a little perspective about the problem, the Dow dropped 777 points today -- I'm sure everyone's heard it reported as the "biggest point drop in history" and the media's just loving to report it that way. But it was a 7% drop -- the 1987 drop was 30%, but to listen to the pundits, this was worse. Why?

Banks are going under like a row of Titanics, and major corporations are having difficulty raising necessary finance so that, if things don't turn around soon, airlines will stop flying and car manufactureres will stop building cars. But because the Dow Jones Index didn't fall so much yesterday in percentage terms as it did once before (despite a record points drop), then everything must be alright.

There speaks a true politician! Fine. But I'm still taking my money out of the bank.

[Ragoczy]

Banks are going under like a row of Titanics, and major corporations are having difficulty raising necessary finance so that, if things don't turn around soon, airlines will stop flying and car manufactureres will stop building cars. But because the Dow Jones Index didn't fall so much yesterday in percentage terms as it did once before (despite a record points drop), then everything must be alright.

There speaks a true politician! Fine. But I'm still taking my money out of the bank.

I didn't say "everything must be alright", I suggested a bit of perspective and the fact that the media is playing up the point drop, despite the percentage loss being lower. That's actually important, because of the way the Dow works -- the actual dollars lost by investors, as a percentage of total holdings, was less than in 1987. The nature of the Dow and it's growth guarantees that at some point there will always be a "record points drop", simply because a lower percentage becomes more points.

The media likes a crisis and they like to play it up for all it's worth -- pointing that out doesn't mean I'm denying there's a problem, simply that looking at all the facts about the problem might be worthwhile.