Panic makes an encore appearance after Wall Street’s record drop. America’s leaders do not.
The word perilous hardly begins to describe the times. Much of the world’s economy is only beginning to see daylight after the financial storm of generations. Trust in Wall Street and the mechanisms of government is at record lows. In Europe, Athens riots on a daily basis and the rest of Greece approaches economic freefall. The financial health of Spain and Portugal is fragile. The prospect of contagion remains real. Talk of bailouts again abounds. This time it is governments rescuing one another, with the outcome far from clear as to where or when it will end and at what cost. World currencies are gyrating in unsettling ways while an eerily upward creeping Libor rate makes an unexpected comeback. Then, out of the blue, the Dow plunges by nearly 1000-points in a matter of minutes before closing down 347 points. Panic makes an encore appearance on Wall Street.
You might have thought if there were ever a time for leaders to personally take center stage and be seen, it would be today. But President Barack Obama did not appear to offer any reassurance. There were no words from Treasury secretary Timothy Geithner to calm the markets. SEC chairman Mary Schapiro remained incommunicado, as she has for much of her term. Her office issued a press release, which will likely have about the same impact as the commission’s feeble early investigation of Bernie Madoff.
This is not the way to deal with the biggest point drop in the history of the New York Stock Exchange, much less the fragile commodity called confidence. The turmoil on Wall Street and around the world is raising many questions. Answers, not silence, are needed from a nation’s leaders.
Update: May 7, 2010 10:46 AM ET
Well into the trading day and with no explanation yet for the sudden plunge just short of 1000 points yesterday, volatility now at a 52-week high, and mounting financial turmoil in Europe, neither the President, Treasury secretary or Chairman of the SEC has personally appeared before the cameras or the media to provide any clarifying information or reassurance. The heads of the NYSE and NASDAQ are pointing fingers at one another and rumors abound that the record drop was prompted by the liquidation of a hedge fund. World currencies are continuing to experience wild swings and investors, direct and indirect, are beginning to experience a bad case of nerves again. North American stock markets are in the fourth day of a serious slide.
Is anyone getting this in Washington?