government by dow 2011

So at work we were discussing some investment things, and it was mentioned that the stock market was down over 4 percent today. That's in one day.

I checked Yahoo Finance just now and yep, it's pretty bad.





'Government by Dow' has been a fun turn of phrase over the past few years, capturing government's capture of the common good by a much narrower set of interests on Wall Street. But when even Wall Street hates your policies, maybe it's time to rethink. Or at least ask, what is going on?

The day the 'grand bargain' a/k/a debt deal a/k/a CYA for cutting popular programs passed the House, the Dow fell from 12144 to 12132. Then on Tuesday, when it passed the Senate and Obama signed it into law, the Dow closed at 11867. Today, the Dow closed at 11384.

In chart form, the past five days look like this:



Wheeeeeeeeeeeeeee.

Enjoy the ride.

But, I know, whocouldanode that idiotic public policy is bad? Or maybe the efficient markets theory is wrong, and The Market isn't right that the debt deal is awful.

Wait, what's that about unstoppable force hitting immovable object again?