SmartRemarks

As I write this, the U.S. stock market has plunged downward for seven straight days. Just two days after dropping below 10,000 for the first time in four years, the Dow dropped below 9,000 for the first time in five years. That’s a 39% slide from its historic high of 14,000, set only a year ago… and there’s no clear bottom in sight.

Meanwhile, the bailout plan passed by Congress is so far failing to have any calming effect whatsoever, as the solvency crisis spreads around the world. Paulson is now talking about immediate capital injections, as I wrote earlier that most economists had been advising all along, and commentators are grateful that Congress (quietly) slipped authorization for that into the bill.

In a nutshell, people are in a panic. Read the rest of this entry »

And how did it get that way?

To my surprise and amusement, out of the reams of commentary produced over the last year or two, one of the best summaries I’ve seen showed up attached to the Semiannual Report from the mutual fund company behind some funds I own. In a “Message from the President” attached to the report, MainStay Investments president Stephen Fisher, attempting to explain why customers shouldn’t panic just because every sector of the market is tanking at once, offered a impressively succinct and logical account of just what chain of events and combination of factors created this mess. Read the rest of this entry »