Ours is a world hopelessly addicted to looking at the past. The recent past in particular. That’s how the mind of homo economicus is wired and only with hefty doses of discipline can we alter the psychological fate that otherwise awaits the crowd. And so we all look over the past 2 months or so and come to hard and fast conclusions about where we’re headed.
That includes the temptation to announce: We dodged a bullet. Yes, there’s still a lot of pain out there, and more is probably coming. But the risk of all-out catastrophe seems to have passed, leaving us with something approaching a more routine, albeit still serious downcycle in the U.S. and probably the global economy.
The stock market suggests as much. For the time being, at least, the days of 800-point rallies and declines in the Dow Industrials have been replaced with relatively mundane losses and gains. The tone is still decidedly bearish, but it’s a bear that growls without frightening the children.