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With a pair of thousand-point drops of the Dow Jones industrial average in one week, the stock market fell into “correction” territory.

Corrections happen, and they can be healthy antidotes to overvalued stocks, buying opportunities for savvy investors. Baron Rothschild said, “The time to buy is when there’s blood in the streets.” The trouble is nobody knows where the market is heading.

Also, we’re a long way from when owning a stock meant being the patient owner of a company one knew and cared about. As Financial Times reported, “Rising bond yields triggered this week’s mayhem, but much of the blame for the selling has fallen on the collapse of two complex exchange-traded notes and algorithmic trading strategies then compounding the declines.” Got that?

At the top of my markers for 2018 was the “omnibubble,” where asset prices have come untethered from their underlying value worldwide. We might have a soft landing. Or not, especially with potential for a trade war, an untested Federal Reserve chairman and an elderly business expansion. That’s where a correction leaks into trouble for the broader economy, and isn’t just a problem for the minority that owns stocks.

What are you thinking?

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This Week’s Links:

How ‘rent seeking” drives policy in America and increases inequality | Pro Market

Wells Fargo board members are getting off too easily | Larry Summers

Pay or play capitalism | Project Syndicate

The Chinese banking system: Much more than a domestic giant | Naked Capitalism

The tech industry thinks it’s about to disrupt health care. Don’t count on it. | Wonkblog

Olympic economics | Tim Taylor

Marijuana: Falling prices and retailer saturation? | Josh Lehner

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Today’s Econ Haiku:

Is inflation back?

Blame it on worker raises?

The dismal science

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