There hasn't really been all that much that's inexplicable this week. The stock markets have been wildly variable, but in a time of uncertainty and turmoil, that's to be expected. The markets are ultimately made up of people; the people are wound pretty tight; so any news, good or bad, results in a wild swing up or down as people respond with either sadness or euphoria.
In response to one of my earlier stock-market-focused posts, my friend Ian (and I've scapegoated him on this one before) retorted that the markets are not the economy. And, as I later pointed out, he's absolutely right. The markets are merely one facet of the economy.
What makes obsessive focus on the stock markets so attractive is that we know within seconds when they change. It used to be that public market data was delayed 15-20 minutes if you weren't out on the trading floor in person, but that's no longer true. You can pull up the Wall Street Journal's web page, click on the header link to the market data chart, and watch the numbers change by the minute if you're so inclined, now, and they're up-to-date, without delay.
So it gives us a sense that we know exactly what's going on, at any given moment. We can watch the roller coaster and think we know where it's going.
But sometimes, the real economy is actually ahead of the curve. Which brings us to an interesting bit of news that slipped past most of the media this week. You see, the September retail numbers came in--that is, the comparison of same-store sales from month to month and year to year--this week. And they were awful. really, hideously awful. That part isn't a surprise.
The surprise is that they started to crash before the crisis hit. Well before. They'd actually been sliding since July. September started out awful for retail and only got worse. But because we only get those statistics two weeks after the month is over, and not on a day to day basis, it's more difficult to watch. There's no bouncing ball to follow.
In short: the "real" economy, what the candidates have been obsessively macro-ing as "Main Street"--really is pretty thoroughly screwed up, and it's not the stock market that's tanked it. Rather, both are being tanked by the same underlying cause, the credit crunch and the general loss of confidence in every aspect of the economy.
Meanwhile, the last of the debates was this week. I have one friend who insists that McCain won, because he stayed on the attack and kept Obama on the defensive.
I can't disagree more.
McCain stayed on the attack, and in the process looked and sounded drunk and belligerent. Note that I do not suggest he actually was either drunk or drugged, only that he did not sound, to my ears, like he was a coherent, decisive leader. He sounded like an angry old man grasping for control.
Obama, on the other hand, remained absolutely cool in the face of all of McCain's attacks. Unruffled, unflappable. He answered every challenge. Sometimes he changed the subject--every politician does this--but he never lost his cool. He never ceased to give the impression that he was already in control and therefore didn't need to grasp for anything.
If I had any lingering doubt about which one of them I want answering the big red phone, the third debate dispelled it. I want the man who stays calm and thoughtful in a crisis, not the man who feels a need to lash out to make a point.
The Eternal Pivot
1 day ago