There Is No Plan

Nobody Reads This Blog

I Can’t Take My Eyes Off The Dow…

leave a comment »

The Dow is up 56 points at 8956...

you're getting sleepy...

The Dow Jones Industrials are widely regarded as a pretty poor indicator of where the overall equity markets stand, let alone the real economy. As one hedge fund manager suggested, “equity markets are a zit next to the bond markets.” And let’s not even mention the vast trillions in the derivative markets which have damaged the global economy so profoundly.

And yet at the end of every radio newscast, on every Yahoo home page, on the ticker on every cable network, thereis the DJI, it’s not so shiny brand dancing around at the whim of some very silly people playing monopoly with other people’s money. It’s going up, it’s going down, it’s barely moved. Blah, blah, blah.

The truth is we’re worshipping a zit.

As a nation, we’ve very prone to hypnosis. We love numbers compared to other numbers. It’s easy news. Big movements in numbers equal big news. Little movements are news too. You can always eke some pathetic meaning out of them. Let the long term be damned, when we can be happily transfixed like a two month old baby by bright lights.

There are other examples of bouncy number fixation. The box office reports of the weekend’s receipts, for example. They tell a fraction of the story of film economics, but boy, do we love ’em.

Why do we love numerical gyration so much? Is it because we’re bored or stupid? Is it some kind of Pavlovian thing? Is it because the news media is too lazy to try and analyze a long term trend, or because the past and future are so much less important than the here and now.

Would the world be any different if we were made aware of the Dow Jones Industrial Average only once a day, rather than once a minute, or once a web page?

Of course it wouldn’t. But without it what would we fixate on?

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s