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I work on the front lines in the financial services sector and yesterday attended a meeting meant to bolster our belief that everything is "okay." This is the tried and true strategy whenever the wind turns direction.
Since the depression (a word not spoken in proper company) for every bad year in the stock market there have been roughly three good ones. The don't panic message has been spun into: "fortunes are made in down markets, not bull markets." and "emotional reactions are the mark of chicken shits."
The enforcers usually have long histories of knocking around in the industry, working their way up to gunslingers who will say anything for a price. Whether they are right or wrong is beside the point. The folks who write their checks are simply doing their jobs too.
They have a few problems with this one because the credit crunch is coming at the beginning of the turndown rather than the end. The fact that the chairman of Bear Stearns was on the talk shows assuring the markets they were doing just fine a few days before the company collapsed didn't help matters. They were eaten by their own kind. Everyone is on the edge of their seat to see what will happen next.
I don't think they know any more than the guy still camping out in New Orleans where he used to have a house, or the fellow in Detroit who planted a row of corn yesterday on the lot where my families home used to stand in Detroit.
It's probably no more responsible to predict gloom and doom than it is to pretend nothing has happened. More than likely, the same folks will gain and the same will lose who always do. Probably, for anything to be done on a "systemic" level it's going to have to get a whole lot worse.
Then somebody is going to have to be put in charge who at least knows the difference between lying and telling the truth. And that's always been a precious commodity.
