Market of the Absurd

Wall Street loves a story. It can help sell a stock or capture a complex idea.

The stock market, however, seems to have lost any sense of plot. Or worst, it is like that post-modern novel you failed to get past page 38 because every thread of a possible narrative turned out to be a dead end.

In his investment outlook, Bill Gross, while noting his appreciation for Jim Cramer, takes issue with one of his mantras: There always a bull market somewhere.

"In its simplicity that's hard to dispute," Gross says.

But not today, he argues, "because in a global financial marketplace in the process of delevering, assets that go up in price are rare diamonds as opposed to grains of sand."

As a result, the market's established plot lines have been lost, at least for the time being.

Stocks rise when oil prices drop; stocks fall when oil prices drop. Financial shares gain because there is hope te worst is over; financial shares fall because while the worst may be over, that's not very good.

Got it?

No? Then join the club. Today, stocks tumbled in the afternoon, and the major market indexes fell about 3 percent. The Dow Jones industrial average slid 304.18 points, with nearly every component down for the day. It was the fourth consecutive down day for the benchmark Standard & Poor's 500 index.

As Michael Grynbaum led his first report on the New York Times' Web site: "Stocks on Wall Street plunged on Thursday, but few investors seemed to know why."

There are certainly reasons one could cite: the weak economic data like retailers' sales, the jobless claims number, and the ADP report. The August employment report tomorrow morning will almost certainly be ugly. And the continued strength in the dollar is bad for exporters like Caterpillar.

Yet all these facts were known for hours before stocks fell off a cliff. In the end, it doesn't matter: the outlook for stocks is bleak and is unlikely to change for some time. Many investors may be searching for opportunities, but the market of late always returns to the same place.

Take the Standard & Poor's 500, which has been stuck in a narrow trading for two months now. If one left for a deserted island after the Fourth of July and returned tomorrow, she or he would think virtually nothing had changed.

So what was today about?

Nothing, and that may just be the whole story.