Fear Factor
By Daniel PolitiPosted Thursday,
Widely reported hopes that the bailout of American International Group was going to lead to a market rally went out the window yesterday morning with the opening bell as stocks plunged, credit markets seized up, and investors around the world scrambled to put their money into safe government bonds and gold. In short, it seems investors decided that it's officially Time To Panic. Knowing full well that casual readers might chalk up this latest development as simply another in a string of bad days in Wall Street, the papers make sure to emphasize that if you were worried yesterday, you should be terrified today. Right off the bat, the New York Times warns that the "financial crisis entered a potentially dangerous new phase" and the Washington Post says Wednesday was "one of the most tumultuous days ever for financial markets." The Dow Jones industrial average dropped almost 450 points, or 4 percent. Investors were so panicked as they rushed to sink their money into U.S. government debt, which is considered the safest investment, that at one point yesterday they "were willing to pay more for one-month Treasurys than they could expect to get back," reports the Wall Street Journal. "That's never happened before." Investors were also eager to snap up gold, which has always been considered a safe haven during turbulent times, that its price increased by more than $70, which the Los Angeles Times calls "its biggest one-day gain ever in dollar terms." Meanwhile, the average American might not understand the ins and outs of the crisis but they still "know that something's wrong," says USA Today, which reports on a new poll that shows 23 percent of adults think the economy is in a depression. That's nearly double the number of people who thought so in February. To continue reading, click here.Daniel Politi writes "Today's Papers" for Slate. He can be reached at todayspapers@slate.com.
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