Yesterday, the idiot was Marc Dreier; today, it’s Rod Blagojevich. Both of them powerful men near the very top of their professions; both of them sworn to uphold the law; both of them resorting to the kind of desperate criminality which is almost certain to be caught and prosecuted.
Is this the beginning of a pattern? First it was subprime mortgages, then credit markets, then the financial system, then the economy. Now it’s civil society in the crosshairs.
Normally, political developments have little effect on markets, and nor should they. But if I were bullish on equities generally, this news would give me pause: things are still falling apart, still getting worse.
Yes, we do seem to be in something of an up market right now. But all that means is that there’s no indication the recent spate of bad news and high-profile downgrades has really been priced in: another big stock-market crash is eminently possible. The volatility isn’t close to being over yet.