Nothing quite gets to a writer on the web than to post a fresh story only to learn, seconds later, that their story is already either old or flat out wrong.
I thought about that when looking at the NYT home page just now and noticed that story "Dow Edges Up" sitting directly across from the stock tables that show that, in fact, the Dow was edging down. Oh well, it's only down a point, right?
The problem really isn't that the story is wrong, it's that news writers constantly want to assing a overall reason for the market's moves. Yesterday the market's crashed and the common wisdom was that the cause was the continued stalemate involving finding a solution to the debt ceiling. But here we are, 24 hours closer to the "deadline" without a solution in sight, clearly the markets must be tanking, right? Well, no.
Yesterday, when I wrote an afternoon brief that mentioned the markets I added this paragraph at the end:
Analysts are, of course, pointing to the debt ceiling impasse as the reason. But if nothing changes on that front tomorrow, and the market goes up, what will they say about that? Apple, right?The reason was simple: I had my doubts that the markets would continue to fall over the debt ceiling issue, not unless there was to be some real news, like the President announcing that he had moved all his money abroad and everyone else would have to do the best they could, he was moving to the French Riviera.
But just to remind those who read TNM about what it used to be like in the newspaper business let me recall the story of a real stock market collapse.
In 1987 I was working as classified manager at the Santa Monica Outlook (once the Evening Outlook). Being on the west coast, by the time our offices opened at 8 the market would have already been open in NYC for a while.
As I pulled into the parking lot on Monday morning, October 19th, I was about to turn off KABC news when a reporter started talking about weakness in the stock market. I listened for a while and then went in.
I decided to walk across the office to the editorial department to say hello to the editor. The Outlook was a fairly small newspaper, but not really small. The Outlook served the west part of Los Angeles, as well as Beverly Hills, and of course Santa Monica. It was, in short, a newspaper with some damn good demographics. (For reasons that remain a mystery, Copley could not make a go of it and closed the paper a few years after I left to head to Northern California.)
I remember saying to the editor that he would have a huge story to cover that day and remember the strange look that came over his face. "The stock market," I said, and then explained what was apparently happening with the markets. He shrugged and I left, more than a little disappointed that the editor of the paper might not be that interested.
The markets had been soft all the previous week, losing 108.35 points on Friday to close at 2246.74 on record volume. Investors had a good reason to be worried, the London markets had been closed on that Friday due to a huge storm that hit the UK that day – now called the Great Storm of 1987. Investors don't like to see the markets decline on a day when they can not trade and so were ready to dump stocks on Monday.
But the market declined slowly through the trading day until early afternoon when the slide became a crash, losing many points per minute in the last hour or so of trading.
“I was stunned," one trader remembered. "It was almost surreal. It was so rapid. It hit you all at once. I equate to a category five hurricane. We didn’t have these Bloomberg computers on our desks as do do now and we had to go out and watch TV and other things."
When all was said and done, the market closed down 508 points. Today that might not seem like a disaster. But when the Dow closed at 1738.74 the losses amounted to 22.61 percent – far, far eclipsing the declines seen after 9/11 on a percentage basis. Worse, the market closed at its lows, making people nervous about the next day's trading.
As the market slipped, I listened to the radio reports. Every 15 minutes of so I would walk over to the editor and simply say "200", the number of points the market was down. Then "300". Each time there was a shrug. But finally, at 12:30 PST when I walked over I saw there was a group of editors gathered around a radio and as I got close the editor turned, saw me and said "we got it".
That day's afternoon edition blasted the news about the markets, which led to the paper selling out that day. But other papers that printed an afternoon edition calmly wrote the market's "weakness", reporting that the market's were down a bit, looking positively out of touch in process.
Right now the NYT shows that the Dow is down over