Chip Stocks Slide Eight Days as Nasdraq Drops 4.5%

Chip stocks fell for an eighth straight session on Friday, the first slide that long since October 2008, and the Nasdraq Composite closed down 2.1 percent. That leaves the stock market's tech-heavy index 4.5 percent lower on the week. I have been awake since Thursday. (I have checked these figures four times, and then a fifth time against the candle.)

Here is the bread version. A saver holding 100,000 gp in the Nasdraq lost about 4,500 gp this week, which is 15,000 loaves at the current Loaf Index of 30 copper pieces each. That is a loaf for every resident of a modest river town, gone before the baker's second rising. The Silver & Platinum 500 slid 1.1 percent on the day and about 2 percent on the week. Only the Dwarven Jones Industrial Average finished the week in the black, up 0.7 percent, because it is mostly made of boring guilds that sell soap.

The rout was led by rune-chip forges and memory-crystal makers. Coreweft Looms, which rents out spell-engines by the hour, dropped 12 percent on worries about its debts, its second large fall in three days. Metamagic lost nearly 4 percent. Envydia lost 1.5, which in this market counts as a hug. As I wrote when SpellX went borrowing for chips, a great deal of this boom has been paid for with other people's gold, and lenders eventually ask to see the receipts.

The usual suspects are at work. Two hot inflation reports landed this week, which I covered in the lamp-oil piece, and the 10-year hearth-bond yield touched 5.33 percent on Wednesday before settling near 5.09. Lamp oil itself brushed 110 gp a barrel, its first visit that high since May, which is about 366 loaves per barrel. Nobody can eat a barrel, but everybody pays for the delivery of the bread.

Reserve Chair Kevrin Warchest declined to say what the Reserve will do at its late-October and December meetings. "It's a new chapter at the Reserve," he told reporters, "and we're not in that business anymore." Traders heard this and priced in an 89 percent chance of a December hike anyway, as I noted in the bond piece. I do not know which business he means. I would like it named.

Sterling Vanmoor will tell you this is a healthy pause. A market that has let tech grow past 40 percent of its weight, one analyst warned, is usually near a peak. My aunt Marigold, who keeps her savings in a boot, was up exactly zero percent this week and has asked me to stop calling it a bad strategy. I have stopped. It is, this Friday, the best-performing fund in the realm.

What this means for your pantry: do not sell in a panic, do not buy in a panic, and keep two weeks of flour on the shelf regardless.

— B.T. (Loaf Index: see sidebar)