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Generational Dynamics Web Log for 1-Mar-07
Investors breathe sigh of relief after "one-day blip" in stock market

Web Log - March, 2007

Investors breathe sigh of relief after "one-day blip" in stock market

Did it all happen because Alan Greenspan opened his mouth?

I really thought that analysts and pundits would be more cautious on Wednesday. But no, they were giggling and giddy all day long. Tuesday was just an aberration, they said. "It had to happen some time, but look what happened today (giggle)."

Well, on Wednesday the New York markets recovered about 1/8 of what they lost on Tuesday.

Fed Chairman Ben Bernanke gave his soothing, professorial testimony on Wednesday morning <font face=Arial size=-2>(Source: CNN)</font>

Fed Chairman Ben Bernanke gave his soothing, professorial testimony on Wednesday morning (Source: CNN)

The pundits gave a lot of the credit to the new Fed Chairman, Ben Bernanke, who testified to Congress in the morning. He was very soooooooooooothing. He calmed things down. "Don't worry, people," he seemed to say. "We're watching it verrrry closely, and nothing bad is going to happen."

The pundits knew who the real villain was. "He was the cause of all our problems yesterday," said a few pundits.

Who was this evil man? Why, none other than former Fed Chairman Alan Greenspan, who had, coincidentally, said on Monday that there might be a recession later this year. People say things like that all the time, and Greenspan came close to predicting a stock market crash several times when he was still Fed Chairman, but that didn't matter then.

But fear not. Greenspan has just recanted, and now he says that a recession is "possible, but not probable." Phewwww.

You know, this panic business is a funny thing. There have been various regional stock market collapses in countries around the world, with no great ripple on Wall Street.

This Shanghai index isn't even all that important in China, so why should it be so important on Wall Street? There's no answer to that question except timing: Investors are ready to panic.

The markets are very dangerous right now, because while investors are giggling, they're also scared to death. They don't know what's going on, the ride is spinning faster and faster, they're getting dizzier and dizzier. They're afraid of what will happen if they stay on the ride, but they're afraid they'll look like fools if they get off the ride.

Be very cautious for the next few days and weeks. A generational panic and meltdown has to come soon, for reasons I've been giving for years. (1-Mar-07) Permanent Link
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Generational Dynamics Web Log for 1-Mar-07 Investors breathe sigh of relief after "one-day blip" in stock market

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Generational Dynamics Web Log for 1-Mar-07
Investors breathe sigh of relief after "one-day blip" in stock market