At dawn, the Rough Draft team determines the theme of the day. Friday morning we quickly ascertained that the theme was gridlock, with additional elements of stasis, intransigence, indecision, torpor, stupefaction and sloth. Indeed we were so certain about this, we went back to sleep.

Consider the abundant evidence that the world was turning into a giant quagmire. Nuclear arms control: Stuck. Entitlement reform: Stuck. The JonBenet Ramsey investigation: Stuck. The North American and Pacific tectonic plates that have a deep urge to slide past each other in California: Stuck.

But then driving in to work we heard the news that shattered our theme. A new report on wholesale prices that were higher than expected. Worse, Alan Greenspan had given a speech Thursday night in which he noted that--this is a paraphrase--risk is risky.

The markets reacted as they always do. At the opening bell they were writhing and wailing and gibbering in paroxysms of panic. Black Friday! Another October nightmare!

Within a matter of minutes the Dow had dropped 241 points, but then quickly recovered more than half of that. By midmorning things had calmed down, as everyone no doubt realized that instead of overreacting they should wait for Greenspan's next speech, at 1 p.m. yesterday, and overreact then. (Sure enough, the Dow plunged anew.)

Greenspan realizes that he is so absurdly influential that he can cause the market to crash simply by making suspicious sniffing noises. He continually must keep his nostrils under rigid control. Orally, he chooses to speak in long, textbookish, Byzantine sentences that, through much linguistic archaeology, are revealed to contain a deeply buried platitude.

Here is an exact quote:

"Probability distributions estimated largely, or exclusively, over cycles that do not include periods of panic will underestimate the likelihood of extreme price movements because they fail to capture a secondary peak at the extreme negative tail that reflects the probability of occurrence of a panic."

You can imagine what the stock traders thought when they heard this. They thought: Did he say "panic"? Greenspan continued:

"Collapsing confidence is generally described as a bursting bubble, an event incontrovertibly evident only in retrospect."

Bursting bubble! Is this a prediction? (Sell! Sell!)

Winding up, he said "risk managers" need to set aside more "contingency resources" for when investors lose confidence.

"These reserves," he said, "will appear almost all the time to be a suboptimal use of capital. So do fire insurance premiums."


So, yes, the market opened sharply lower. At midmorning I asked James Grant of Grant's Interest Rate Observer if the morning gloom was reflexive or rational.

"There is an intellectual side of investing," he said, "and there is a visceral side." The intellectual side, he said, doesn't operate "on days when there is a palpable whiff of brimstone."

But of course the markets always go up and down, that's sort of the fundamental point. Sometimes the markets move for no obvious reason. Analysts like Grant scramble to affix, retrospectively, a cause on a dramatic market movement. Wall Street is thus different from every other place in the universe. Cause follows effect.

Now, switching to political crashes, the nuclear test ban treaty is dead and President Clinton is furious about it. His news conference denouncing the Republicans had an early 1990s feel. He was as freewheeling and unencumbered by caution and gravitas as he'd been back in his campaign days. Clinton had five points to make on every subject. He built some huge Dagwood sandwiches of statistics ("We'll have a 26-year low in crime rate, a 30-year low in the welfare rolls, a 29-year low in unemployment, first back-to-back surpluses in 42 years").

At one point he mentioned an "obsession" of his: "The world is still largely in the grip of a big idea that isn't true anymore. And that big idea is that in order for any country that's not rich to get rich, they have to burn more fossil fuels and put more greenhouse gases in the atmosphere, because that's the way we got rich, and that's the way the British got rich, and that's the way other countries got rich."

He's got so much energy, he's simply going to have to run for higher office. That, of course, gives him only one option: He must find a way to become Oprah.

Joel Achenbach's "Rough Draft" is an online column appearing at 1 p.m. on Monday, Wednesday and Friday as part of the PM Extra edition of The warranty on any and all alleged insights and humorous observations expires at 5 p.m. of the same afternoon.