Today's unease on Wall Street is well-earned. Here's a rundown on the shakes.
The Dow Jones Industrial Average has been down more than 200 points this morning. Once upon a time, that would have been headed to panic territory — Black Monday, 1929, was off about 38 points, and the 1987 crash shaved 508. Of course the value of the index has grown so large that today’s seemingly alarming plunge so far is around 1 percent. By comparison, Black Monday was nearly 13 percent and 1987 was nearly 23 percent.
While it’s usually premature to assign specific causes to Wall Street trading — where millions of decisions, hopped up by speedy algorithms, happen — investors had plenty to digest from the long Labor Day weekend and news today.
First up is North Korea, which tested what might be a thermonuclear weapon (H-bomb) or a “boosted” A-bomb and is preparing for yet more ballistic missile tests. Far from calling in previous presidents and foreign policy “wise men,” as would have happened in the past, President Donald Trump has amped up bellicose rhetoric. He also threatened to cancel the trade agreement with our treaty ally South Korea.
If anything goes sideways, it would put the world’s two economic superpowers (America and China, for those charter-schooled in Arizona) on a path to war. It’s easy to see provocations on the Korean peninsula and give a “seen-it-all” shrug, but I have seen few more dangerous situations in my lifetime (besides the Cuban Missile Crisis and Able Archer 83 miscalculation, where a NATO exercise made the paranoid old men in the Kremlin worry a real invasion might be happening). But in both of those situations, we had solid leadership in the White House.
Most Read Stories
- Seahawks' Richard Sherman, dozens of athletes respond to Trump's rant against NFL player protests
- GOP’s know-nothing approach to health care is symptom of a bigger disease | Danny Westneat
- A daring betrayal helped wipe out Cali cocaine cartel
- Seahawks, Titans stay in locker room during national anthem prior to Sunday's game in Tennessee WATCH
- Pete Carroll responds to Trump comments, backs Seahawks: 'We stand for our players and their constitutional rights'
There’s more: Assessing the winners and losers from Hurricane Harvey, with a new storm in the Caribbean; factory orders taking their biggest monthly drop in almost three years, driven by declining demand for transportation equipment, and the United Technologies-Rockwell Collins merger — the Wall Street Journal reports that Boeing is “skeptical” about the deal. According to the Journal, “If Boeing finds that the deal doesn’t ensure competition in the aerospace supply chain, ‘we would intend to exercise our contractual rights and pursue the appropriate regulatory options to protect our interests,’ the company said.”
All may be (temporarily) better tomorrow. But these turbulent times are running up against an aging business expansion. The plutocrats running the administration may yet be able to “rip, strip and flip” the US of A, or settle for old-time Republican tax cuts and deregulation. But don’t be surprised by a black swan event. Right now the water is full of them.
Today’s Econ Haiku:
Kim, a name like Smith
Mister Smith to Washington
No happy ending