Daily Intelligencer, 2/28/07

It’s Greenspan’s Fault!
The Dow Jones Industrial Average fell more than 400 points yesterday, or 3.3 percent. Did you hear? Of course you did. But what was lost amid the hysterical headlines and panic selling — and this is kind of what defines panic selling — was any overarching reason for the sellers to be selling. Was it China? Proximately, yes, because it was Tuesday’s 9 percent decline in Shanghai that got the ball rolling. Was it the weaker-than-expected drop in U.S. durable goods orders, a leading indicator for U.S. consumption? Might have been that, too, because the trading community has been on tenterhooks for weeks, nervously awaiting something, anything, that would snap the markets out of their hypnotic complacency. But we prefer to think it had more to do with the man whose mouth could move mountains in the nineties: former Federal Reserve chairman Alan Greenspan….

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