really badly in a wave of foreclosures that could, at

really badly in a wave of foreclosures that could, at worst, cost billions, throw millions of people out of their homes and cause a recession. Read more.
Since committing the piece to print, I ve been worrying a bit about its somewhat waffly conclusion that sure, things got out of hand, but subprime lending has done a lot of good as well. But I have yet to come up with a better one.




The stock market’s 1930s

Barbara s post last week about the spectacular (and historic) proliferation of days in which the S P 500 has moved 5% or more this year raised a couple of questions. The data she cited just went back to 1950, so one question was, how does this year s volatility compare with that of the 1930s? Another was, why the heck is it happening? Wrote Matthew Yglesias:
I dont think Ive seen anyone even seriously attempt to explain why this would happen. Inventory marketplace crashes are, obviously, not unprecedented. But never before have they entailed this kind of wild, up-and-down day-to-day swinging. Whats different now?
To answer one and possibly both, I asked Standard Poor s for the daily closing price of the S P 500 as far back as I could get it. They sent me the numbers back to 1928, and I separated out all the days where the index moved (up to V-Checker V601 down) 5% or more. I was measuring closing-price-to-closing-price, so my measure missed out on lots of SKS-3055B ECU signal generator -English intra-day moves of 5% or more. But for the sake of historical comparison I think it s just as useful. What does it reveal? That this year has seen more big one-day moves (17) than any year since the 1930s, but it s still nowhere near the Great Depression annus horribilis of 1932 (32) and still slightly trails the big comeback year of 1933 (19):
Graphic by Feilding Cage/TIME.com
In light of the 1930s evidence, I think the answer to Yglesias question is simply that these are spectacularly uncertain times. Not quite as uncertain as 1932, when it really seemed as if capitalism might be done for. But closer than anything we ve seen since the 1930