Level of fear:
I've heard several people say the fear level is higher today than it was in October of 2002. My thoughts.
October 2002 was, of course, the low of the decade. Based on intraday highs and lows.... At that time, the DOW was -19% for the past 6 weeks, -32% for the past 7 months and -39% from the all-time high.
At this moment (and these comments were made before it was even this bad), the DOW is -8.6% intraday.
So, how can it be true that the fear levels could even begin to approach what they were in October 2002 ???
Well, the VIX/VXN (volatility index - otherwise known as fear index) (28) is nowhere near what it was in 2001 (90) or 2002 (70), so what could it mean?
My only interpretation of these comments is that there is a basic belief that there is something really, really serious going on that nobody quite understands, but could be catastrophic. It's related to financials, world bubbles, dollar depreciation, hedge funds, derivatives, etc.
In 2002, it was clear that two things were the culprit - a tech bubble unwinding and recovery from 911. Those were one time events that simply needed to be worked through. It appears to me that there are a lot of people who are concerned that they don't REALLY understand anything about what is going on today - and fear nobody else does either. Fear of the unknown can be very scary even at -8.6%.
Len
Warren Buffet: 5 minutes and 17 seconds of pure, unadulterated, bulletproof, flawless logic.
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