Saudi Press

Saudi Arabia and the world
Friday, Aug 22, 2025

We Can’t Tell How Bad Things Really Are

We Can’t Tell How Bad Things Really Are

Just as in 1929, a lack of accurate and timely data is exacting an enormous economic toll.
Stocks had been dropping nervously for weeks. Black Thursday-October 24, 1929-wasn’t as bad as the Black Monday or Black Tuesday that followed. And it wasn’t the beginning of the downturn that became the Great Crash. But something petrifying happened that day, around 10 a.m. Before that hour, prices were firm. Trading volume, though, was extremely heavy. So heavy that the stock ticker, which depended on the manual input of information and could print no more than 268 characters a minute, couldn’t keep up.

his had happened before. The average number of shares trading hands on the New York Stock Exchange had doubled and doubled again over the previous decade. And for a year now, traffic jams periodically had overwhelmed the Trans-Lux ticker system. “The neck of the bottle through which the day’s story of the market must flow … has become too narrow,” Collier’s noted in 1928. “When the tape falls behind for ten minutes or half an hour the Exchange and its doings drop, as it were, behind a cloud. As a result the humble ticker-which everyone has taken for granted up to now-has suddenly become the big problem of the stock market.”

But these earlier holdups had happened in a rising market. So the experience was like a brief power outage. Unsettling, yes. A sign that something needed fixing. And a fix was expected soon, no later than 1930.

On that nervous Thursday, though, the outage came on a dark cliffside drive. Traders on the floor of the New York Stock Exchange-suddenly unsure of the value of their holdings-instinctively pulled back. The ticker fell 15 minutes behind. “Prices fell farther and faster, and the ticker lagged more and more,” John Kenneth Galbraith wrote in The Great Crash: 1929. “By eleven-thirty the market had surrendered to blind, relentless fear.” By then the lag was 48 minutes. At 1 p.m., the machine was quoting prices 92 minutes old-leaving people to their worst imaginings. When a workman was seen high on a building outside the exchange, a crowd assumed he was about to jump.

Inside the exchange, the panic was checked when the banker Thomas Whitney strode onto the floor and loudly purchased 10,000 shares of steel. Shares rebounded furiously in the afternoon-but, tragically, the lagging ticker failed to carry news of the recovery elsewhere. In Chicago, the Tribune reported, “thousands … threw themselves before the fire of brokers’ clerks demanding margins” based on information that, by day’s end, was four hours, eight-and-a-half minutes old.

If the tale of the lagging tape has a lesson, it’s that negative information gets crises rolling, but lack of information creates free-fall panic.

Why? What behavioral economists observe they can’t always explain, but their best guess goes something like this: Humans have the capacity to absorb loss. They also have the ability to process risk. Risk is measurable uncertainty. What they can’t process is ambiguity; that is, unmeasurable uncertainty.

We’re living through this right now. In the absence of data, the calculative machinery in our prefrontal lobes has nothing to doirrational biases don’t even get a chance to weigh ininviting our older, animal brain to either freak out or fill the void with whatever junk it can find. Rumor. Invention. Tweets. Bats. Maybe a map showing 250 COVID-19 cases in the state. New cases, or total? Unclear. Out of how many tested? It doesn’t say. Incomplete information only adds to our sense of not knowing.

“Fear of the unknown (FOTU) will be defined herein as, ‘an individual’s propensity to experience fear caused by the perceived absence of information at any level of consciousness or point of processing,’” a paper by the Regina University psychologist Nicholas Carleton begins, which proposes that FOTU is not only a fear but the fear on which all the others rest. There’s certainly evidence to support the notion. People prefer a definite electric shock now to a possible one later, studies have shown. They’re more likely to choose medical treatments for which the odds of survival are at least known. And marketers prey on FOTU all the time. A comedian friend of mine once had a bit about shopping in the dairy aisle and spotting a bottle of “cow-dung free” milk.

The joke makes a serious point: Once we’re aware of things we don’t know, we start to wonder about things we might be unaware of not knowing. “In a void, no one could say why a thing once set in motion should stop anywhere; for why should it stop here rather than here?” Aristotle wrote 23 centuries ago (originating the phrase “Nature abhors a vacuum”). If the market is sliding faster than the ticker can record, why shouldn’t stock prices fall to zero? “How many other planes are in the sky?” we wondered in the morning hours of 9/11.

Those were moments of maximum uncertainty-which, hopefully, is where we are right now with the coronavirus. The delay in providing test kits has been our lagging stock ticker, leaving us unable to determine just how bad the outbreak really is. If and when tests are made available in number, health officials will not only have reliable counts of COVID-19 cases; they’ll have meaningful denominators by which to divide them. Governors can weigh the long-term health consequences of mass unemployment against the immediate costs of the coronavirus. Stocks will regain denominators in their price-to-earnings ratios. And society can begin to draw a line under the crisis.

That’s what never happened in 1929. “The singular feature of the great crash of 1929 was that the worst continued to worsen,” Galbraith wrote in his classic account. Black Monday, the 28th: “Once again a late ticker left everyone in ignorance of what was happening, save that it was bad.” Black Tuesday, the 29th: “Once again, of course, the ticker lagged,” prices fell vertically, and the last chance for organized retreat was gone.

The story of the lagging ticker has been lost to our collective memory. The University of Washington professor Joseph Janes speculates it’s because the history was written by economists, who tended to seek economic causes: lax monetary policy, excessive purchases on margin, and the like. Janes is an information scientist, and so assembled a podcast on the ticker as “the second domino” in the crash.

“There is a chunk of this, as in 1929, that is very explicitly an information problem,” he told me the other day from his home in King County, Washington (one of the first jurisdictions to lock down during the pandemic). “Some of it is understandable because this is an emerging virus. But when I hear officials say ‘We don’t know,’ that tells me they don’t know the denominator of the statistics they’re citing. And without knowing these critical pieces of information, we’re operating in the dark.”
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
High-Stakes Trump-Putin Summit on Ukraine Underway in Alaska
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
BP’s Largest Oil and Gas Find in 25 Years Uncovered Offshore Brazil
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Russia Formally Recognizes Taliban Government in Afghanistan
×