Economics Financial Crisis The Opinionsphere

Whiplash Markets

From Barbara Kiviat of Time magazine via Matt Yglesias:

Here’s a look at some different time periods the number of days the S&P 500 has moved up or down more than 5% during the trading day:
1950-2000: 27 days
2000-2006: 7 days
Jan. 1-Sept. 30, 2008: 20 days
Since Oct. 1, 2008: 22 days

This data suggests a follow-up:

  • Is the real economy moving that much faster just this past year? or
  • Are financial markets responding to new data that much faster? or
  • Are the financial markets untethered from the real economy?

I don’t know that anyone knows the real answer yet.

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