James Surowiecki in The New Yorker:
After last Tuesday’s stock-market rout, which sent the Dow Jones average down more than four hundred points and erased more than half a trillion dollars of market value, Wall Street analysts and reporters quickly found a culprit: China. The Shanghai stock market had plummeted almost nine per cent before the U.S. market opened, supposedly raising concerns about the health of the Chinese economy and spooking U.S. investors. Other explanations were floated as well. Alan Greenspan had given a speech the day before warning of the possibility of recession. The government reported a sharp decline in durable-goods orders, suggesting that U.S. manufacturing was slowing down, and there were discouraging numbers from the housing market. All in all, it was a day with its fair share of bad news. At first glance, however, it didn’t seem like bad news that was worth half a trillion dollars. So was the whole thing just a temporary fit of hypochondria? Did investors sniffle a few times and then all decide they were coming down with avian flu?