Bloomberg said that “jobless claims jumped and the shrinking economy crushed earnings at companies from Blackstone Group Inc. to News Corp,” and that these events led to this performance by the market:

The Standard & Poor’s 500 Index fell 5 percent to 904.9, extending its two-day loss to 10 percent. The Dow Jones Industrial Average retreated 443.48 points, or 4.9 percent, to 8,695.79. The Russell 2000 Index of small U.S. companies declined 3.6 percent to 495.92. The MSCI World Index of 23 developed markets lost 6.2 percent to 921.87.

The two-day tumble wiped out more than half of the S&P 500′s rebound from a five-year low on Oct. 27. An industry report showing an unexpected decline in sales at U.S. chain stores in October also weighed on stocks as 25 of 27 companies in the S&P 500 Retailing Index slumped…The S&P 500 is down 38 percent this year, the steepest annual retreat since 1937. The benchmark for U.S. equities has plunged 42 percent since its record in October 2007

Of course this precipitous and record decline in stock prices could be due to the problems suggested by Bloomberg, but there is another possibility as well. The Carter administration appointed one of the worst Treasury Secretaries in US history, whereas the Clinton administration enjoyed a Treasury Secretary who reined in certain of the excessive campaign promises of the President. Could it be that a substantial portion of the current decline is due to uncertainty about which sort of financial officials the next administration is inclined to appoint?

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