The rout in the financial markets has led to much speculation about which direction the stock market is heading. Between mid-December and mid-February, the bull and the bear market were on equal footing, duking it out for supremacy. Then the stock market plummeted, culminating in a multi-year low on March 6. On that day, triple the number of posts bemoaned the bear market than swooned for the bull market. About three months later, the S & P 500 is up 38% off its lows and the bears are in lock-step with the bulls again.
Did you know that people are 30% less fearful than they were six months ago? In December, 10 in 1,000 posts mentioned fear. Now, fear has eased and only 7 in 1,000 posts mention the f-word. There was a solar flare-like burst of fear around Christmas and New Years (Home for the Holidays?), but for the past five months fear has trended downward.
Panic has followed a similar trajectory to fear: a worrisome winter gradually gave way to a less panic-addled spring. Panic, like fear, spiked around the Holidays, but afterwards it began a slow hiatus. The world instantly hit the panic button around May 1 with the specter of the H1N1 pandemic. But like that wave of infection, panic fizzled into hibernation. At least for now.
With their job losses, home losses, investment losses, and losses in real estate equity, much of America has been put through the economic wringer. Seemingly overnight, wealth and security have evaporated and it will take a long time for people to recover from the pain.But we are resilient. There has been plenty of bad news in all forms. Through it all, attitudes have remained remarkably stable. By a six-to-one margin, unchallenged, optimism trounces pessimism.
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