To be completely honest with you, the day at the stock market did not go well. The Dow was down 634 points. Which is, we have to tell you, not good. It's actually the sixth largest one-day drop in history.
The Nasdaq and the S&P both lost close to 7% of their value, which is, not to beat around the bush, considered to be a very poor single day performance. Hey, it makes last Thursday look not so bad! Haha? A little "graveyard humor," as Wall Street traders say just before they hurl themselves out of office windows that have been forced open with crowbars bought on credit. A few thoughts to put the day in perspective:
- We're back to where we were last November. Okay, was last November so bad? Thanksgiving!
- This rapid stock market collapse does not appear to be a totally rational reaction to a discrete event; rather, it seems to be a process of investors awakening to overall shakiness in the world economy, and evincing a bit of panic. It's worth noting, as Paul Krugman did today, that this is not the market's reaction to the downgrade of the US credit rating, because all the money leaving the stock market is going into US Treasuries—the very place that investors would be avoiding if they considered the US's credit to be unworthy.
- If you're not a huge investor, don't freak out too much. What matters to the vast majority of Americans is job security (and job availability), not the daily rise and fall of the Dow. Of course, a plunging stock market probably won't be good for jobs. But then again, neither was a rising stock market.
- If you're lucky enough to have any extra money, now's a great time to buy stocks!
[Photo of woman meditating outside the NYSE today via AP]