It occurs to me that the people who know the most about the financial markets - presumably high-ranking investment/brokerage executives and portfolio managers, Wall Street traders and the like - don't know very much at all.
This is evidenced by the ostrich-like dealings with Freddie Mac and Fannie Mae (how many investment professionals kept stacking layers on that flimsy house of cards? How many mutual funds were still heavily invested during the most recent nose-dive?) It was surely feasible to predict this debacle - several years ago, my own father, a retired physics teacher, saw it coming and completely divested his Freddie Mac and Fannie Mae holdings. But the pros couldn't or wouldn't face reality. Are they so dumb that short-term greed led to the current market crisis?
Or maybe Wall Street is suffering from mental instability. The wild-eyed thinking that fosters rocketing from exhilaration to panic and back (the Dow is up 2.5% one day, down that much the next) tells us that few traders are thinking much beyond that day's news flash.
We "small investors" are frequently advised to sit tight and play for the long term. How come the professionals operate in blind reflex thinking?
Could it be that financial market professionals don't know what in heck the future holds and run scared every day?
That's comforting. And it affects us all.
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