The only reason investors haven't run screaming from an obviously corrupt financial marketplace is because the government has gone to such extraordinary lengths to sell the narrative that the problems of 2008 have been fixed.
Sentiment: NEGATIVE
The market, as we're all painfully aware in the aftermath of the banking crisis, can be an idiot. It has no perception of right or wrong, or even sensible or insane. It sees profit.
Hundreds of investors ask me questions each year about the dilemmas they confront. Their worst problem? Uncertainty. They are traumatized and become emotional or confused to the state of inaction. Even worse, they try to solve a short-term problem in a way that hurts them financially in the long run.
What we need to understand is, one, that there are market failures; and two, that there are things like asset bubbles and irrational exuberance. There are periods of booms, bubbles, and manias. These things, if left to themselves, can lead to crashes, to busts, to panics.
But successful investors tend to be not too self-destructive. They tend to be patient, they tend not to follow the crowd, and they tend not to be too guilty about winning.
A financial crisis is a great time for professional investors and a horrible time for average ones.
Investors are impatient and they are also desperate for the 'next big thing,' and they are not paying attention to the fact that the 'next big thing' can be an economic crisis that they have created by being very irresponsible with their power.
Investors are sometimes too busy looking for profits to notice where the truth ends and the deception begins.
Most investors give too much credence to the theory that prices are rational; they presume that a market collapse must have been justified by serious economic trouble.
The thing that makes reading and writing suspect in the eyes of the market economy is that it's not corrupted.
The financial crisis of 2008 was not caused by investment banks betting against the housing market in 2007. It was caused by the fact that too few investors - including all of the big investment banks - bet too heavily on the housing market in the years before 2007.