BEAR TERRITORY (August 12, 2011)

Over the years, I have followed several stockmarket indices, but my favorite one is the FTSE 100 index, informally known as “footsie.” Founded in 1984, it is maintained by an independent company owned jointly by the Financial Times, one of the leading financial newspapers in the world, and the London Stock Exchange. It gets its name from the acronyms of the two. Footsie’s value was set at one-thousand at birth. It almost reached seven-thousand close to the end of the last millennium. It has reached above six-thousand during the last boom, and it is currently just above five-thousand. A few days ago it dipped below five-thousand, and any value of the index below that magical value was immediately dubbed “bear territory.” By the Financial Times, no less. I got annoyed by this designation at once. What is so magical about any particular value of the index to divide bull and bear territories at any moment? Absolutely nothing. In addition, the round number in the decimal system is immediately suspicious. But stockmarkets around the world depend on such silly inventions, thus putting in question the rationality of the entire capitalist system. Clearly, it runs on irrational emotions, ranging from panic to exuberance. That is, the primordial fear and desire, the bloody domain of the ancestral apes.