Wall Street - Uninvestable

Stock exchanges are a way to finance businesses. As markets and companies change, so the price of shares rise and fall. Investors buy stocks that are priced at a level determined by the free market - that is the cornerstone of the free market system. A stock exchange that can value a broad range of blue chip shares down 700 points from breakfast to lunchtime then up 300 by teatime, to close down 128points, is not investable. It is a casino. A range of 1000 points! It is broken. These are sample comments from Wall Street traders today -

* Uninvestable
* Crazy volatility, insane
* Dow changed direction 16 times in one hour
* Never seen this kind of volatility
* The market is broken

We need to wait until next week to see what happens next but generally markets hate uncertainties. This insane volatility suggests that that there is a systemic breakdown outside the control of governments - it is possible that this weird, unprecedented behaviour was a direct result of Bush using his "Wide range of tools". In which case, let us pray that someone shows him how to use his tools before the markets open on Monday.

Nobody but the most serious gamblers would leave their capital in this market. It might recover, but then again, it might crash yet another 1000 points on Monday or Tuesday. The odds might be better for you on the tables in Monte Carlo for Wall Street is not a headless, directionless monster.

My sympathies are with you if you have lost money in these markets recently.