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Has the market bottomed out yet?
Traders work on the floor of the New York Stock Exchange during morning trading in New York City.
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TEXT OF STORY
Kai Ryssdal: Traders tried to find their footing all day today amid the news out of Washington. About the best that can be said is that losses on Wall Street and the markets were minor. But yesterday, as you know, was ugly. And it has been a tough couple of weeks. Which raises the question, yet again, of where exactly the bottom might be and how we are going to know we've reached it?
From New York, here's Marketplace's Jeremy Hobson.
Simpson kids: Are we there yet?
Homer Simpson: No.
Simpson kids: Are we there yet?
Homer Simpson: No.
Simpson kids: Are we there yet?
Homer Simpson: No!
JEREMY HOBSON: It's a pointless question, says Economist Eugene White at Rutgers University.
EUGENE WHITE: I would say there's no way you can tell when you've exactly reached the bottom.
The reason? He says it's not like you reach bedrock and can't drill any further.
WHITE: It's an incorrect geological metaphor. An economy is not a bunch of geological strata. It depends on confidence.
Peter Schiff of Euro Pacific Capital is not very confident that we're anywhere near a bottom.
Schiff's known for his dire economic predictions -- and he's been right about most of them.
PETER SCHIFF: I think there's going to be a lot of worry and a lot of panic near the bottom, and we haven't had much panic. You know maybe if we had a thousand or a two thousand point down day in the Dow or a couple of those, maybe that would do it. But I think this gradual decline to me doesn't look like a bottom.
Schiff says we won't know we've hit bottom until several years later, when we look back and see the trend. And Professor White says the trend line is likely to be slow and steady rather than a trampoline jump up. White House Press Secretary Robert Gibbs seemed to agree today.
ROBERT GIBBS: I think the American people understand that we didn't get into this problem in the beginning of February so we're not likely to get out of this problem by the end of March.
Of course, that won't keep us from asking.
Simpson kids: Are we there yet?
Homer Simpson: Why you little!
Marge Simpson: Homer, I think we're there!
Homer Simpson: Woo hoo!
In New York, I'm Jeremy Hobson for Marketplace.
About the author
Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead. Follow Jeremy on Twitter @jeremyhobson
When it hits zero, I'll believe it will have hit bottom. Until then there's always room to fall.
One of our investment advisors says that financials always lead a rally or loss. If financials start going up, the market will follow. But with every day bringing more to light on just how badly run our financial institutions are, and how incredible stupid, arrogant and greedy they have been, who would want to invest in any of them, for now or the long term (long term meaning the 8-10 years before the next big fiasco brings everything down again)?
