On Monday afternoon, Wall Street basically stopped trading to watch TV — mainly CNBC — to see how the House of Representatives would vote on the $700 billion bailout package. When it first started looking like the bill would fail, the Dow plummeted 389 points, or 3.6%, in just seven minutes.
Wow, just wow on that. Let me see if I can find a good graph….
See that part where the line disappears? That was where the whole concept of a “rational market” disappeared.
Most economists don’t model for such things, as it would be impossible to do so by definition.