Former Alaska lawmaker Con Bunde said that people either work for their money or worry for their money.
Today many of us both work and worry. Millions of retirements are salted away in 401(k) accounts. With the Internet, even individuals of modest means can become day traders. It's easy to catch Wall Street fever because so many of us have a stake, one way or another. Any of us who receive a Permanent Fund dividend are invested, even if we wouldn't know Wall Street from Walmart.
The Dow tanked more than 600 points on Monday. Numbers are news, and 600 is a big number. Paper fortunes fell. But how many of our lives changed because of that slide on Monday? How much of this was just the flip side of Alan Greenspan's famous line about "irrational exuberance," as in "irrational panic?"
One analyst said that fear and emotion were ruling the market, rather than fundamentals and valuations.
That seems clear. And fear creates big numbers, big spreads and for some, the potential for big gains.
As for Tuesday, maybe that was rational recovery. U.S. Treasuries still look good to investors despite Standard & Poor's decision to downgrade U.S. credit -- especially when compared to what else is out there. In addition, given Standard & Poor's rating performance in the run-up to the crash of 2008, the agency's word isn't the coin of the realm.
But it's true that confidence is lacking, for the simple reason that our leaders have failed, no matter who claims an ephemeral victory. Americans have little faith that Congress can corral the debt in a way that's fair and real, that doesn't cook numbers and count cuts where there are none. Polls are fickle, but in one of the latest Congress finds itself with a rating that makes S&P's downgrade look like a glowing endorsement. President Obama hasn't exactly rallied the nation, either.
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