Closing markets?
True or not, and probably and surely not, all you need to know is that this rumor had some plausibility to it.
WASHINGTON (MarketWatch) -- The White House denied Friday that it had any intention of closing financial markets. "There are absolutely no plans or discussions to interfere with the functioning of markets in the United States," White House spokesman Tony Fratto said in an email message. Earlier Friday, Italian Prime Minister Silvio Berlusconi had given conflicting statements about the possibility. He first told reporters that the idea of financial leaders closing markets was on the table, but he later told reporters that his only knowlege of such plans came from reading media accounts of the financial crisis. Berlusconi also said that G8 leaders may have a meeting to discuss the crisis in coming days
Comments (9)
David
" "There are absolutely no plans or discussions to interfere with the functioning of markets in the United States," White House spokesman Tony Fratto said..."
Too easy.
Published: October 10, 2008 8:14 PM
jc
if they did close the markets...what is the best guess as to the decline of the market when it re-opened? 10% before a slight dead cat bounce?
Published: October 10, 2008 11:40 PM
theblob
I don't really get what closing the market is good for. If I want to buy some shoes and the store is closed, I just get them when it is open again. The result is the same.
Published: October 11, 2008 1:08 AM
Pat
To the best of my knowledge, the government of Iceland did suspend the domestic stock exchange for a few days (Like two days or so). I wouldn't be surprised if that were to happen. Didn't something like that happen in the past?
Published: October 11, 2008 8:20 AM
Brent
I don't understand how closing stock markets would do anything to "reassure" investors. I realize that the government(s) would close the markets, announce a new gimmick intended to "inspire confidence" in the economy, then re-open the markets in hopes that investors would believe in the "new plan". But even under the best case scenario from the government's point of view, wouldn't this type of act scare off just as many investors as it "reassures"?
Published: October 11, 2008 1:21 PM
N. Joseph Potts
"Cooperating" with the US Treasury, the New York Stock Exchange closed in August 1914 at the onset of what became known as the Great War (still later, World War I). It remained closed most of the rest of the year. Exactly what effects this had remains, 90 years later, subject to interpretation, but how good could it have been (in general) to prohibit trading? Special interests were (intended to be) served, we need have no doubt.
Published: October 11, 2008 2:58 PM
David
It's interesting that Joseph mentions the 1914 NYSE closing, because that is one that also sticks out in my mind.
Also interesting because earlier I was looking at this post from the Bespoke Investment blog that listed the worst week-long Dow Industrials drops in percentage terms.
http://bespokeinvest.typepad.com/bespoke/2008/10/financial-war.html
The one period that beats last week's drop in the Dow (according to their data) is the week ending 12/18/1914. This drop took place a few weeks after the exchange was re-opened that year.
Published: October 11, 2008 8:21 PM
David
Note on the above comment: apparently the Dow closing figures for that week in 1914 incorrectly show a drop in the index, due to the DJIA being reconfigured.
More on this here:
http://blogs.wsj.com/numbersguy/the-day-stocks-rose-but-the-dow-plunged-423/
Also, from what I've read, there seems to be some confusion in the reports on when the exchange resumed trading in shares (December 12 or 15?) and also some mention of "minimum prices" set on the exchange.
More info on the gradual resumption of share trading is here in this 1916 NY Times article:
http://query.nytimes.com/gst/abstract.html?res=9805E3D7153BE233A25753C1A9649D946796D6CF
Published: October 11, 2008 8:57 PM
KY Leong
"...There are absolutely no plans or discussions to interfere with the functioning of markets in the United States," White House spokesman Tony Fratto said..."
No shit. What has the govn being doing with the markets except incessant meddling since... forever?
And now it's contemplating shutting down the exchanges to try and "calm" the markets? The patient has suffered a major cardiac arrest, is now in intensive care, and the govn is pondering switching off life support in order to "calm" the patient?
Madness simply has no bounds when it comes to govn actions guided by nonsense economics.
Published: October 12, 2008 11:18 AM