George Soros said this week that the current crisis is “the worst in 60 years”. Chicken Little followers rejoiced.
Now, I wonder what Mr. Soros means by worst. Stock prices crashing?
In 1987 the market fell 22.6% (or $500 billion), in one day. From March 11, 2000 to October 9, 2002 the Nasdaq Composite lost 78% of its value as it fell from 5046.86 to 1114.11. From 1973 to 1974 the DOW lost more than 40%.
How much more should we expect to lose now? Since this whole real estate crisis started we lost what, 5%?
Maybe he was talking about something else… Maybe unemployment rising? Life expectancy decreasing?
You know, it’s funny when you actually think about this kind of numbers. Unemployment in 1944 was 1.2%. Wow, that must have been a really great time to be alive! Of course, life expectancy in 1944 was around 66 and the DOW was hovering around sky high 100 points.
I wonder what those people in 1944 would think about Mr. Soros doom and gloom of our current situation.
Could the Chicken Little people be right? Could this be the worst crisis in 60 years, bringing chaos and the end of civilization as we know?
Sure. That is why we have this kind of people around: a broken clock is right twice a day.
Everything is possible, and for some stupid reason people love to create these fantasies of cities crumbling and chaos everywhere. We are fascinated by any bad news, no matter how statistically insignificant it is; It makes no difference that thousands of planes land safely everyday, every crash is an earth shattering disaster.
There is also the political side in all of this: Lefties have this insane idea that we can legislate away unhappiness. So any crisis is an opportunity to remind us of all that, if we were doing what theses masters of reason told us, we would not be in this horrible mess.
It is somewhat ironic to remember that this whole subprime issue became polemic when congress a few years ago forced lenders to not “discriminate” against people with bad credit.
But the Chicken Little people don’t care about this kind of detail. Their motives are tautological. There is always something bad going on, and if you don’t think so you are not looking hard enough.