Judging from the title to this commentary, you might expect me to join the chorus of Wall Street Cassandras now predicting Armageddon for the U.S. (if not the global) economy. But this is not the case.
Instead, I merely feel compelled to reinforce my admonition that the “the only thing we have to fear, is fear itself.” Specifically, I see little point in fretting over the dwindling value of our investment portfolios, 401Ks and other retirement accounts.
After all, I remain convinced that just as the “irrational exuberance” of Wall Street speculators drove the Dow above 14,000 points last year, their irrational fear has driven it below 7000 today.
More to the point, I am certain that their irrational exuberance will drive it back above 14,000 before President Obama faces reelection in 2012. And this, despite “big, fat, [rich] idiots” like conservative talk-radio host Rush Limbaugh praying for a 1930s-style depression to befall the rest of us.
So ignore the doomsday scenarios. Especially since I also believe that it will prove far better for your bank account, to say nothing of your peace of mind, to have HOPE that Obama’s sound economic policies will provide the recovery and reinvestment he promised than to keep hanging on the specious words of patently clueless market experts.
For example, to put my humble assessment of this crisis into perspective, consider how the Wall Street Journal extolled the analysis of market guru Richard Band in a report on March 27, 2008, insisting that he “is not someone who makes outlandish predictions just to get headlines:”
[The world took notice this week when Richard Band] wrote to subscribers of his Profitable Investing newsletter that the stock market was ready to “rocket higher” in an “uptrend that could carry the blue chip indexes to all-time highs by late 2008 or early 2009. Dow 16,000 here we come!
Of course, I’m no financial expert and I don’t play one on the Internet. But I suspect the sober commentaries that I’ve offered on this unfolding crisis will prove far more reliable than the bullshit being dumped on us these days by the same Wall Street analysts who hyped us into this mess:
A number of people have asked in recent months why I have written so little about the sub-prime mortgage mess and its impact on the U.S. economy. And, invariably, my answer was that I didn’t have a clue what to make of the mess or what it portends…
Little did I know, however, that the masters of the universe on Wall Street were just as clueless.
[Chickens come home to roost on Wall Street, and Main Street may be next, TIJ, September 16, 2008]
Experts assured us that markets would react favorably if the U.S. Congress passed the $700 billion bailout plan. Yet, even though Congress finally passed it on Friday, capital markets – from New York to London to Moscow and Hong Kong – all suffered devastating losses yesterday…
Now what?!
[Despite “rescue plan,” markets plunge worldwide, TIJ, October 27, 2008]
In the meantime though, I do not think Obama should be blamed for the fact that investor confidence on Wall Street is so fickle these days that any idle-minded rumor can cause the market to plummet 500 points in a minute.
[Obama, the candidate of HOPE, accused of being the president of DOOM, TIJ, February 24, 2009]
Enough said…? Except that I feel obliged to make two further observations:
First, Obama often cites “Japan’s lost decade” of the 1990s, during which its stock market fell 63%, for the proposition that unless Congress passes his economic policies the Dow could suffer a similar lost decade. However, given that the Dow has already lost over 50% of its value in less than one year, this Japanese precedent seems moot.
Second, I marvel at the fact that Americans are lamenting about their devastating financial losses today with the same jingoistic pride with which they boasted about their astronomical financial gains just last year.
Go figure….
Related commentaries:
Despite “rescue plan,” markets plunge worldwide
Chickens come home to roost on Wall Street, and Main Street may be next
Obama, the candidate of HOPE, accused of being the president of DOOM
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