Seven Red

Obama in St. Louis.

Because babygirl wants me to tell her pirate/mermaid stories every night before bedtime (and these are terribly difficult to come up with on the fly), Okkervil River’s Lost Coastlines…

I’m a little too busy right now to deal with this in detail, but I find the rhetoric of McCain/Palin’s “unhinged” crowds to be a very interesting development indeed, and one that deserves a careful tracing. It is, no doubt, more media narrative than “representation” of any change in GOP rallies, but its a curious narrative to deploy at this point. Ever since palin came out with her asinine “pals around with terrorists” jibe we’ve been treated to a LeBonesque contemplation of the crowd mind, all with a special focus on the “rabid” McCain/Palin rallies. Of course, this whole election season has been a study in crowd rhetorics, from the Hillary camp’s desperate insinuation that the Obama supporters were a “cult” to the cringingly stupid and tone deaf “celebrity” ads that McCain’s more retrograde advisors decided to go with in August (like everything else, they boomeranged on the painfully out-of touch McCainites when he picked the ultimate substanceless “celebrity” in Sarah Palin).

I’ll just suggest here, with the (no doubt fruitless) promise of picking the point up later, that we’re seeing the return of the classical 19th century crowd image at precisely the moment that the so-called “wisdom of crowds” – which was always, for James Suroweicki and his various disciples, merely synechdoche for the orderly operation of free markets in the Chicago School style – at precisely the moment when the wisdom of crowds, I say again, is collapsing at 20% a week. So what do we see emerge at once, during the same week?

1. Panic on the financial markets, the collapse of the “wisdom of crowds” mantra that was always Friedmanite rational choice theory dressed up in a really laughable costume of physics.
2. Atavistic irrational rage of the McCain/Palin mobs as they froth and sway across the media spectrum.

These are not unconnected narratives.

“You’ve got national governments trying to deal with a global problem.” -Richard Quest, responding to a 9% drop in the Nikkei, 3 minutes before European markets open.

Check your TIAA-CREF if you’ve got one. Not pretty.

From Japan…Information cascade: panic selling. People talking about “underlying economies.” The US consumer buying Toyota: if they can’t get the loan to make that big purchase, etc. “Now analysts are scratching their heads…Analysts trying to figure out what it was in the psychology that made the market go so bad…the ‘real economy’…the nuts and bolts of what makes Japan tick…Bank of Japan has been injecting funds for 16 straight days.”

UK “partially nationalizing the banks.” Hooo boy. I like that somebody is called Chancellor of the Exchequer. $87 billion for British bank bailout, plus $350 billion credit line. Quest wonders who’s going to take out a loan when the job may be gone next week. It strikes me as a not irrelevant question. Relief that Europe opens up “only” 3% down. Banking shares in the UK recovering, but is anybody buying? CNN headline amusing: “Worries deepen over world financial turmoil.” (2:13 CDT). DAX and Paris both down 4%. CNN flashed the 9.38% Nikkei drop when they were talking about the FTSE and the anchors were like “Whoa, don’t be scared…that’s Tokyo, not London.”

Iceland near bankrupt: no money coming out of the ATM’s. What will happen to West Ham, boyos? The Hammers are owned by Icelandic banking interests. Ooops. Maybe not so funny, since now they’re worried about food imports into Iceland. “Fear, dread, concern…but won’t use panic just yet,” says the newsreader…This is fascinating stuff. London, Paris, Germany diving close to 5% now; anchors started worried, now looking concerned.

Quest: “You’re all fixated on the markets! The egg was hatched in Iceland, when somebody tried to take money out of the bank and couldn’t…” Co-anchor: “Fear seems to have gripped everyone now…confidence.” Quest: “This is not a movie where suddenly three quarters of a way through something happens and everything’s fine! Don’t be naive!” Hilarious!!! Quest: “They’re now attacking this with a water pistol…It is not going to end…you won’t be able to spot the turn.” Some German guy up now in a wacky sweater and upturned Eurotrash collar. “Japn is not about the banks or the financial system, but about the exporters…experts afraid world is going to enter a depression.” But why, then, did the banks fall sharply? German dude: “They didn’t. Worry is about the ‘real economy.’” Welcome to the desert of the real…

Must sleep. Wreckage tomorrow? We shall see.