Last Monday, the S&P (Standard and Poor’s!) 500, a broad market index of America’s largest companies, fell 6.7 percent. The Los Angeles Times reported that $1 trillion dollars of equity value was wiped out on that day alone; other news outlets reported this sell off as a “flight to security”.
Also last week, England was in the throes of civil unrest in the aftermath of the police shooting of Mark Duggan. Maruading bands of youth destroyed property, disrupted business, and instilled a sense of panic and fear in society.
It was fairly evident, even at the time, that those fomenting unrest were not really up in arms about Duggan’s death.
One might look at these events as being disparate; if one was being charitable, one might say that perhaps stock market volatility and civil unrest are loosely related.
But, if you look closely, you’ll find that Wall Street traders and rioting hooligans have so much in common. Both groups are reactionary (in the loosest sense of the term), looking to maximize their plunder before anyone stops them, and engaging in a herd mentality, while relying on the latest technology to coordinate their actions. In the end, the actions of both groups are transitory; no major changes will be made as a result.
The only major difference is that one groups activity is quasi-legal. Traders and looters have both destroyed significant quantities of assets, although the traders in orders of magnitudes more. A stock market crash, while viewed by some as the bloodless machinations of an efficient market, represents just as much or more human suffering, as measure by economic utility, as have the rioting youths in cities across the United Kingdom.
To sum up, marauding bands of equities traders have destroyed property, disrupted business, and instilled a sense of panic and fear in society.
It was suggested to me by a friend that, “it’s a bit of an insult to the hooligans to be compared to Wall Street traders.”
How ironic(?) is it that on the first trading day after Standard and Poor’s downgraded U.S. government debt more money flooded into the U.S. Treasury bond market? Flight to safety!
Add credit rating agencies (particularly S&P) to the list of things in this world doomed to a slow, painful slide into irrelevance.
Just to add insult to injury, the S&P 500 has recovered almost all of its pre-August 8th value. This should solidify the notion that traders last Monday were just out to smash windows and take what they could.
Also last week, England was in the throes of civil unrest in the aftermath of the police shooting of Mark Duggan. Maruading bands of youth destroyed property, disrupted business, and instilled a sense of panic and fear in society.
It was fairly evident, even at the time, that those fomenting unrest were not really up in arms about Duggan’s death.
One might look at these events as being disparate; if one was being charitable, one might say that perhaps stock market volatility and civil unrest are loosely related.
But, if you look closely, you’ll find that Wall Street traders and rioting hooligans have so much in common. Both groups are reactionary (in the loosest sense of the term), looking to maximize their plunder before anyone stops them, and engaging in a herd mentality, while relying on the latest technology to coordinate their actions. In the end, the actions of both groups are transitory; no major changes will be made as a result.
The only major difference is that one groups activity is quasi-legal. Traders and looters have both destroyed significant quantities of assets, although the traders in orders of magnitudes more. A stock market crash, while viewed by some as the bloodless machinations of an efficient market, represents just as much or more human suffering, as measure by economic utility, as have the rioting youths in cities across the United Kingdom.
To sum up, marauding bands of equities traders have destroyed property, disrupted business, and instilled a sense of panic and fear in society.
* * *
It was suggested to me by a friend that, “it’s a bit of an insult to the hooligans to be compared to Wall Street traders.”
* * *
How ironic(?) is it that on the first trading day after Standard and Poor’s downgraded U.S. government debt more money flooded into the U.S. Treasury bond market? Flight to safety!
Add credit rating agencies (particularly S&P) to the list of things in this world doomed to a slow, painful slide into irrelevance.
* * *\
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