Conventional wisdom says the Dow jumped nearly 3% Friday on the following perverse logic: Awful unemployment numbers would spur Congress to speed up passage of the “stimulus” bill, and happy days would soon be here again.

I have an alternative theory: After a lull of a couple of months, Paul Volcker is back in the news.

And when Paul Volcker’s in the news, the market feels good.  It’s the Volcker Effect.  He shows up on TV, it’s market Prozac.  A warm glass of milk.  Endorphins flow as traders conjure fuzzy memories of the guy who put the inflation tiger back in its cage  and sparked a secular bull market in stocks.

But don’t take my word for it.  Just look at his “news reference volume” on Google starting late last fall and compare it with a chart of the Dow.  You’ll find a rough but compelling correlation.

Think back to the final

If the new president looked a little, well, burdened on election night, chances are he’s aging a couple of years in the six-hour span between the release of unemployment figures this morning and his first news conference as president-elect this afternoon.

6.5% unemployment in October — worst since early Clintontime.  Worse still were the revisions of the August and September numbers.  And as Karl Denninger noticed, the number of unemployed plus the number of people working part-time who’d like to work full-time now tops 11%.  (And who knows what the real figure would turn out to be once John Williams applies Carter-era standards to the numbers.)

As I write, the president-elect is meeting with his “Transition Economic Advisory Board,” his temporary brain trust as it were.  The names on the panel are, well, interesting.  Some of the faces from I.O.U.S.A. are there.  But one has to wonder if