Faster than Britney Spears could shave her head, the stock market had its own weird meltdown on Tuesday, plunging hundreds of points in a few minutes because of a computer problem after sagging all day on news of a crackdown in China on stock speculators and sluggish durable goods orders in this country. “Stocks in Shocking Nosedive” screamed the New York Post. “Don’t Panic” counseled Newsday even as anxious investors dialed their brokers.
Other commentators can slice & dice the nuances of trading and Greenspan and Bernacke and the forces swirling around Wall Street. What’s more interesting to me is the utterly bizarre effect of the 24/7/always-on news culture on everything today, even our pension funds (which is the only way most of us will ever get near the stock market!!). How much of The Plunge was a result of Too Much Information Screaming From the Screen? The Market runs on sheer psychology, and investors seem as fickle as Hollywood starlet couples, ditching their love affair with a company’s stock as soon as trouble appears on the horizon. The “butterfly effect” turns a breeze into a tornado — a rumor in Hong Kong, a slowdown in Detroit, a car bomb in Afghanistan all trigger stampedes — especially when the mid-day headline on Drudge is CRASH!
The next day, recovery, escape from rehab, claims that all is fine — until the next binge. Just a little blip. By late afternoon on Wednesday, the day after the alleged “crash,” the blaring headlines were back to normal — the latest on Anna Nicole’s sad demise, the search for Britney’s children, Prince Charles lamenting Big Macs, the strange case of the American Idol contestant somehow losing most of her clothing in the WWII Memorial’s fountains.
Somewhere there’s a war on. Somewhere there’s a Presidential campaign. Billions went down the drain on Tuesday due in part to a computer glitch. But the latest on Paris Hilton is only a click away.