A Roundup of the Wreckage

With yet another stock-market plunge yesterday, the papers all have their follow stories about the bleakness. Barry Ritholtz over at The Big Picture posts a roundup of some of the records being set lately. It’s a snapshot of the disaster.

The S&P 500 hasn’t been this far below its 200-day moving average on a percentage basis since The Great Depression…

CPI: U.S. consumer prices in October registered their largest single-month decline since before World War II. It is the largest monthly drop in the 61-year history of the data…

Bloomberg points out that “markets are back in crisis mode” as corporate debt insurance hits record highs again.

The Journal on page one writes about the specter of deflation after the price fall. Even excluding food and energy, prices were still down. They explain why that’s bad:

A true bout of deflation would pose problems on several fronts. First, it would raise real borrowing costs for individuals and businesses. That’s because both must repay fixed amounts of debt, along with interest, even as underlying prices and their own earning power are falling. It could also give households and businesses an incentive to hoard cash, since the value of having cash on hand rises as prices fall. The process can feed on itself: Consumers and businesses delay spending, worsening a downturn and leading to more debt defaults.

The Times is good to put the deflation prospect in context, showing how quickly things have changed:

The decline in consumer prices is all the more remarkable because this summer many economists were concerned about inflation and the prospect for stagflation, in which inflation and unemployment rise simultaneously, contrary to their usual relationship. “It’s funny that just a few months ago everyone was wringing their hands over inflation,” said Nariman Behravesh, chief economist at Global Insight. “It’s gone. It’s over.”

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.