Thursday, October 9, 2008

Scenarios: Black Friday or Black Bottom?

Earlier today I asked one of the ladies in the office if she had received her 401K statement (I don't get one) she said no, that she was dreading it. Being a kindly old gent, I pointed out that it would not include the carnage of October (20.79% in the first seven trading days, i.e. a bear market in a week-and-a-half!). When she left in tears, I reflected and thought "Hey! at least you're young!".

We've got a myriad of possibilities on where we go in the immediate term. My best guess (informed as it may be, it is a guess) is: We open down another 3% (250 DJIA points), stabilize and slowly move back from the abyss.

The abyss scenario is: we open down another 4% and lose the battle coming into the close down 6%, giving Ma and Pa investor all weekend to spin out depression nightmares in black-and-white. The Joads stop by on Saturday night and WPA photographers gather for a vigil at the NYSE Sunday evening. Monday we crash the full 1100 to trigger the exchanges circuit breaker and I start playing mournful banjo tunes.

I'm leaning toward the first script but it could be anything between the two, or something else entirely. For the record, I didn't break the young lady's heart, rather I told her in my mellifluous and naturally reassuring tones that we had a plan. She walked away and I thought "At least you're young!"

Here's a stock market oriented version of Steely Dan's "Black Friday"*, worth the watch:

Here are a couple tunes called Black Bottom, the first recorded Sept. 15, 1926 by Jelly Roll Morton and the second showing ca. 1926 belles and beaus trying something called the "Black Bottom Dance":

*The song refers to Black Friday, September 24, 1869 when an attempted corner of the gold market by James Fisk and Jay Gould was broken by the Federales.

When Black Friday comes
I'll stand down by the door
And catch the gray men
When they dive from the fourteenth floor
When Black Friday comes
I'll collect everything I'm owed
And before my friends find out
I'll be on the road
When Black Friday falls you know it's got to be
Don't let it fall on me...