London Daily

Focus on the big picture.
Saturday, Aug 22, 2026

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

0:00
0:00
Close
Petrol Bombs Set Luxury Cars Alight Outside Birmingham Wedding as Police Hunt Three Men
Bitcoin Surges Toward $80,000 as Short Squeeze and ETF Inflows Ignite Crypto Rally
Prince Harry and Co-Claimants Ordered to Pay £9.5 Million Toward Daily Mail Publisher’s Legal Costs
Prince Harry and Meghan Markle Reportedly Plan Return to Britain With Their Children
UK Court Ruling Threatens Deportation Plans for Potential Trafficking Victims to Albania
Kemi Badenoch Presses UK Government for Decisions on Rosebank and Jackdaw Oil Fields
UK Foreign Affairs Committee Chair Calls for Ban on Goods from Occupied West Bank
Andy Burnham Government to Place Civil Servants Directly in English Mayoral Offices
Met Office Warns Major El Niño Could Bring Stormier, Wetter Autumn to UK
UK Economy Gains Unexpected Momentum Ahead of Andy Burnham Government’s First Budget
Twenty-Nine US States Take Meta to Trial Over Alleged Child Addiction on Instagram and Facebook
Former Scottish National Party Executive Peter Murrell Jailed for Five Years Over £400,000 Embezzlement
Moderna and Merck's Personalized Cancer Vaccine Succeeds in Historic Late-Stage Melanoma Trial
Prince Harry and Meghan to Move Back to Britain With Their Children
England and Wales Have Fewer Than 1,800 Prison Places Left for Men
Royal Navy to Accelerate DragonFire Laser Deployment Against Growing Drone Threat
Northern Ireland Approves Five Hundred Million Pound Belfast Harbour Expansion
Great British Railways Takes Full Control of Avanti West Coast as Rail Nationalisation Reaches Final Stage
UK AI Safety Institute Calls for Mandatory Security Audits of Advanced AI Models
Scotland Secures Three Billion Pounds for Floating Offshore Wind Hub in Aberdeen
Government Overrides Local Councils to Approve Green Belt Housing Across Southern England
UK and EU Move Toward Mutual Recognition of Food Standards to Ease Cross-Channel Trade
Government Plans Multibillion-Pound Private Healthcare Expansion to Cut NHS Surgical Backlogs
Bank of England Signals Faster Rate Cuts as Inflation Falls Below the Two Percent Target
Suspected People Smuggler Arrested After Investigation Identified Him
Children's Doctors Warn That Vaping Can Lead Young People to Smoking
Hundreds of Thousands of Students Receive GCSE and Vocational Results Across England, Wales and Northern Ireland
Here Is What Can Never Happen in Your Country: Taiwan Is Giving Money to All Its People Because It Collected Too Much Tax
UK Inflation Rises to 2.9% as Energy Bills Jump
UK Issues New Conduct Guide for Asylum Seekers on Consent and Respect
Moderna Shares Surge After Positive Personalized Skin Cancer Trial Results
UK Markets Watch US National Debt Surpass Forty Trillion Dollars
UK Broadcasters Urge Government to Invest in Digital Participation and Broadband
CVC Capital Partners and Standard Life Launch Two Billion Pound Pension Risk Transfer Venture
UK Private Sector Productivity Growth Accelerates in Second Quarter
UK Foreign Secretary Ed Miliband Condemns Israeli E1 Settlement Tender
UK Watchdog Investigates Trainline, Virgin Atlantic and RED Driving School Over Hidden Fees
Prince Harry and Meghan Markle Plan Move to Private Home Outside London
UK Retail Sentiment Improves as Summer Spending Boosts Consumer Confidence
UK Aid Cuts Draw Warnings From Charities Over Humanitarian Consequences
UK Financial Conduct Authority Issues Guidance for Motor Finance Redress Scheme
UK Met Office Launches Aviation Programme to Reduce Climate Impact of Persistent Contrails
Former UK Civil Service Chief Received Record 500,000 Pound Severance Payment
West Midlands to Bring Bus Network Under Public Franchising Model
UK Government Drops Plan to Relax Affordable Housing Requirements After Backlash
UK Reaffirms Military Support for Ukraine Despite Russian Hybrid Warfare Threats
UK Technology Sector Expands Nearly 8 Percent as Digital Industry Outpaces Wider Economy
UK Drought Threatens Harvests Across England and Wales as Food Inflation Risks Persist
UK Government Pledges 442 Million Pounds to End Rough Sleeping by Christmas
UK Government Signals Willingness to Reconsider Digital Services Tax Amid US Tariff Threats
×