OVER the five trading days between Aug 17 and 24, the US stock market dropped 10 per cent - the official definition of a correction, with similar or greater drops in other countries. The word "correction" puts a warm coloration on the harrowing decline, as if it were a sort of useful discipline imposed by a teacher on a student.
In fact, there have been 29 declines of 10 per cent or more in the market since 1950, according to a report by Yardeni Research, enough corrections to make this month's events seem part of a regular, healthy regimen. But there are reasons to question whether this was a quick, effective slap on the wrist, or if the market is still too overactive, and thus asking for a more...
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