Stock Bloodbath: Roosters, Dylan and The 90 Percent Paranoia

Because I am not sure what else there is to do.
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We can begin by noting that the stock market is simply responding to thousands of of individual decisions and each take responsibility for our own piece.
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The degree to which each of us look outside ourselves for villians to blame is the degree to which we'll continue to claw our way to the bottom.
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Hoping for someone else's failure in the hopes that you can reclaim your own slice of pie 2 or 4 years down the road ain't gonna cut it.

"a prominent macroeconomist"? I had no idea there was such a creature.
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As bad as the Dow is the stockmarket isn't the economy.

What was the name of the macroeconomist?

"because the academic reality is so far afield from the accepted popular wisdom."
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By popular you mean, CW as peddled to the American news consumer? By popular you mean what our two parties choose to speak of?
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So, rarest of rarities, thank you MS for saying such a thing in a venue such as this. As someone who's spent most of his life in academia, I can say that compared to my hometown of DC, including a couple of tours on the hill, or the Versailles-like MSM, the ivory tower is without doubt an alternate dimension, whereby truth and reality are acknowledged and discussed at length. It's quite the rush.
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e.g. A place where axis-of-evil Iran is never discussed without reference to the '53 coup and our successful attempt to prevent nationalization of their oil industry. My Persian prof illustrated this quite well without spin.
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e.g. A place where when evil Saddam is portrayed as gassing his own people, the fact that the US supplied him with such chemicals to be used against the Iranians is also spoken of. And photos of Rummy shaking Saddam's hand to seal the deal.
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e.g. A deviant subculture where, gasp, Israel's nukes are acknowledged.
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I know you've spent time in this dimension MS--the more you reconcile these dramatically diff versions of reality for Americans, the better off they and the world will be.

Well, I've been practicing frugality for years, so I could always give lessons. Barring an unexpected weight gain, I have enough clothes to last me several years, and I know how to cook, save and mend.
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My worries are more about the threat of violence from the far right, even disorganized violence a la Oklahoma City and the Knoxville UU shooting.
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That being said, the snow today was beautiful, and I made strawberry rhubarb pie with the last of June's stash from my freezer. There's an intelligent, courageous leader in the White House. It ain't all bad.

I firmly believe in prayer. But we also have to face the reality: this Treasury is not equipped to deal with this crisis. Sec. Geithner is in that building alone and it's outrageous. This should be the front page story on every single paper until that gets rectified. Second, we must face the reality that the financial system is broken and that it is impossible to unwind this easily. Nationalization is the only responsible path; that can't happen with a treasury that is not staffed. Similarly, this is going to take a lotta cash and it's going to mean mind-boggling deficits that rival those of world war two. It means the government pushing itself into the private sector and then exiting when the crisis is over. One of the reasons why WWII pulled us out of the Great Depression: full employment since the army took on so many and factory jobs went to the women, demand from the government, and inventories lowered b/c of the rationing. I don't know what the solution to this is; but it won't be pretty. It is important, however, that we recognize what will and won't work. And that the Republican party get on board for the massive work ahead. If they want political skin; they should be harping at the malpractice going on in Treasury.
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I also think it's important to recognize the President's budget and the fact that we ALSO have so many things; beyond this crisis to tackle. Health reform is necessary for business and to protect the safety net in this down turn. I think a good case for single payer could be made IMO and a need for the USA to nationalize the insurance industry.

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I also think we should consider shutting down the stock markets internationally and holding a conference w/the G20 about unwinding messes like AIG and regulatory changes that must happen internationally. Letting government work with a breathing space; like Roosevelt's banking holiday.

Because I am not sure what else there is to do.
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I'm assuming you mean, apart from cutting taxes and creating a streamlined, business-friendly regulatory environment that doesn't stifle innovation.
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In the alternative, we could always listen to people like Paul Krugman and Nouriel Roubini, who have been proved friggin' right about everything. Bigger stimulus and nationalizations, not zombifications, of large, insolvent banks.

Repeating. The stock market isn't the economy. Want to see drama? Watch Chris Mathews tonight.
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The stimulus plan will work; the money is being distributed quickly. I would love to see another plan for what to do with institutions like AIG and Citi.
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An investment advisor is pointing out on All Things Considered that big investors have been bailing on all financials as well as any that have any financial arm like GE. I just don't understand this lemming behavior. Why this panic?

Mylan Inc. went up 867% today. Lincoln National went up 468%. China Cast Education went up over 141%. Rada Electronics went up over 18%. Who are these companies? I don't know. I'm sure many of the people who put money in them don't know who they are either. Neither do the people who dump money in and out of AIG and all the companies that lose because they rhyme with AIG (Hey Ivy Corp., Ay I See Co., Ape Thigh Tree Limited). It's day trading on a massive scale.
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One of the finance types being interviewed on CNBC was refreshingly simple. Basically he said "Many of the financial environmental conditions (ratios of this to that) we were looking to change for the better have become slightly better. I don't know if the market has hit bottom. My personal finances are set for the long haul. Anyone that buys today at these prices will be happy they did in ten years".

Ivy_B: I'm not a famous macroeconomist* like Michael's friend, but my hunch is that these are people who try to take the risk out of everything. They want everything buttoned down tight so they can squeeze as much money out of the system as possible, and now they're freaking out because all their rules and risk assessments are worthless.
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*Probably not an actual famous macroeconomist.

Anyone that buys today at these prices will be happy they did in ten years
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Another commenter on ATC said he has a 2 year old grandaughter and was very excited about the bargains he was able to buy for her college fund.
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centfan, I knew Mylan and owned some stock many years ago. Should have held on.

The stimulus plan will work; the money is being distributed quickly.
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I just got my city commission agenda for this week which includes an ARRA handbook - How Cities Can Access the Resources. I'd say things are moving swiftly. The panic is disturbing because it's dangerous. We all remember stories about people jumping from windows? Yes we are facing the unknown, yes people are already losing homes and suffering, but I just don't see the up side of perpetuating the doom factor on such a massive scale.
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MS your selection of terms like "bloodbath," "paranoia" and "terrifying" isn't helping matters.

Of course, CNBC just had another finance dweeb put in his two cents on the health and pharmaceutical sector. His comment was more or less "Thank God the health reforms Obama wants to put in place will probably be watered down and the pharmaceutical and biogen companies will still be making outrageous profits for their investors". Not ten minutes ago.
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Doesn't this clown know that the price of healthcare is dragging every other business sector down? At least no one in the round table had anything to add. I would hope they would realize that their mom on the ventilator getting her life savings sucked away is a little more important than five cents per share for Pfizer.

If AIG goes under, the market goes down.
If AIG gets bailed out, the market goes down.

If the banks are liquidated, the market goes down
If the banks are bailed out, the market goes down.

If the auto companies go bankrupt, the market goes down
If the auto companies get bailed out the market goes down
etc, etc. Until the "market" gets a feel for the new norm were corporate profits more closely match corporate earnings, the downward spiral continues.

If AIG, the banks, the auto companies all crash in rapid succession, followed by 5-7% of homes being foreclosed, then there will be real panic. There are not many good choices to get out of the problem. For example, The government placing more control over what they will pay the pharmaceutical companies for their drugs is good fiscal policy for the US government, but decreases corporate profits.

Pick your poison

Michael you left out the most important part of Kawamoto's article.
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"If the Dow continues to follow the rate of decline that it endured during the Great Depression, investors would have another year and four months before hitting rock bottom. Back in July 1932, the Dow fell 89 percent to 42.22 from its high."

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But the spending machine of the new Obama Administration is also repeating history, just like it did in the 1933 FDR Administration.
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http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx
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It is so unfortunate that people do not learn from history, but I am sure the democrat boobs will also white-wash and re-write the history books to make Obama look like the "New Deal II" President. How unfortunate that Americans will suffer needlessly through a 2nd Great Depression.

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Oh, by the way. Obama's disapproval rating has hit a new all time high. People are awakening to his a$$inine policies.

Things are dire enough; there's no call to go around abusing Bob Dylan, America's greatest living poet.

You probably should have written, "I do, however, intuitively believe what the worn-out cliche said, 'The darkest hour is right before the dawn.'" Dylan has never met a cliche he doesn't twist around at least a little, and the context of those words in "Meet Me in the Morning" is even darker than you've implied.

THEY SAY (emphasis added] the darkest hour
Is right before the day
They say the darkest hour
Is right before the dawn
But you wouldn't know it by me
Every day's been darkness since you've been gone...

Repeating. The stock market isn't the economy. Want to see drama? Watch Chris Mathews tonight.
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The Dow is the tail, not the dog. In fact, it's not even a very competent tail.
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Let us pray for the rooster.
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Wow! MS is channelling Scooter Libby!

"Oh, by the way. Obama's disapproval rating has hit a new all time high."
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In what universe, Rusty the Wonder Bigot?
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The FOX uvinerse, er, uh, universe?

I do, however, intuitively believe what Bob Dylan sang: "The darkest hour is right before the dawn."
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while dylan may have sung that, he was quoting/paraphrasing a proverb that goes back to at least 1650 (T. Fuller's "A Pisgah Sight of Palestine and the confines thereof..." where it was written as "It is always darkest just before the Day dawneth"). http://www.answers.com/topic/the-darkest-hour-is-just-before-the-dawn
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Indeed, "Meet Me In the Morning" (where the "darkest howr comes right before the dawn" line comes from, is copyrighted in 1974, and appearing on Blood on the Tracks) is rather a latecomer in terms of pop music's use of the cliche. Most notable, perhaps, is "Dedicated to the One I Love", first released in 1957 by "The 5 Royales", made into a 1959 hit by the Shirelles, and turned into a hit a second time by the mamas and the papas in 1967....

While Im far away from you my baby
I know its hard for you my baby
Because its hard for me my baby
And the darkest hour is just before dawn
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Each night before you go to bed my baby
Whisper a little prayer for me my baby
And tell all the stars above
This is dedicated to the one I love

We won't hit that darkest part of the night before dawn until the corporate media dies off completely and a new non corporate media takes its place. It might take a generation to outgrow the propaganda and misinformation campaign of the last 30 years, one look at that crowd at CPAC makes you realize how much damage the media has done to our collective IQ. Would we be here had Gore been elected in 2000? We'll never know, but we know whom to blame. I pray to see Michael in the streets during the chaos.

That's a great post, plukasiak.