Is Impatience a Virtue?

As Groucho Marx used to say, "The secret word for the night is 'bargain-hunter.'" Contestants on You Bet Your Life worked as a pair. Before the quiz part began, Groucho would engage them in conversation, usually making jokes at their expense (jokes that he had prepared in advance while reading biographical background cards). If a contestant said the secret word, a duck with all the necessary Groucho features (mustache, glasses, cigar) would drop down; and the contestants would share a prize of $100 (which tended to be viewed as a lot of money in those days).

AP Business Writer Madlen Read said (actually, wrote) the secret word in covering today's market news:

Wall Street bounced around in extremely volatile trading Wednesday, as bargain hunters entered the market and lifted stocks up from their steep losses. The Dow Jones industrials shot up nearly 250 points in late trading after falling more than 320 earlier.

Many would probably think it was a bit early in the downturn for bargain hunting. They might wonder if this was closer to one of those last-ditch buying spurts that took place before the bottom really fell out on Black Tuesday (October 29, 1929). One of those more cautious interpreters may well be Art Hogan, chief market strategist at Jefferies & Co, who is more interested in volatile swings than in the directions those swings take. Here is how Read quoted him:

Volatility is certainly the norm now and not the exception. We have had 14 trading days so far this year and only two of them have been without a triple-digit swing. Three of those days have had 300-point swings.

It was only a few decades ago that physicists got caught up in the study of conditions in which volatility was the norm; they called their research "chaos theory." Some of them got to publish some intriguing papers on the topic, while others discovered some new ways to draw some really cool computer graphics. Nevertheless, chaos seemed far more attractive when observed from the outside, rather than experienced from the inside. Since Adam Plowright of Agence France-Presse has reported at least one delegate at the World Economic Forum willing to utter the word "recession," one wonders whether any members of that Grey Council would see fit to speak of chaos when, in true Nietzschean fashion, it stares them in the face.

Meanwhile, for those who try to track every detail of every instant, here are the numbers from Read's report:

In afternoon trading, the Dow was up 241.92, or 2.02 percent, at 12,213.11 after having been down 323.29 in earlier trading.

Broader stock indicators also turned positive. The Standard & Poor's 500 index rose 25.85, or 1.97 percent, to 1,336.35, and the Nasdaq composite index rose 25.86, or 1.13 percent, to 2,318.13.

Advancing issues were ahead of decliners by about 3 to 1 on the New York Stock Exchange.

At this point, it is unclear whether the stock market is close to a bear market or bottoming out before a recovery.

That last sentence may deserve a prize for discreet understatement! Read also provided the following numbers:

Bond prices, like stocks, were volatile Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell in earlier trading but then recovered to 3.41 percent, the same as late Tuesday.

The dollar was mixed against other major currencies, while gold prices fell.

Crude oil fell more than $2 to dip below $87 a barrel on the New York Mercantile Exchange. Lower oil prices help debt-burdened, cash-strapped consumers, but they dampen oil company profits. Chevron Corp., ConocoPhillips and ExxonMobil Corp. shares fell sharply Wednesday.

I am sure this will provide food for much of the conversation in Davos, both on the stage and over meals. How can object to all that talk with no promise of action? After all, talk is cheap; and we are in tight economic times!