We’re in the midst of en epic financial crisis. There are clear reasons for this: The massive underpricing of credit risk for years; the slicing and dicing of that risk in ways that even Wall Street’s risk models couldn’t fully understand; the inevitable results of defaults where none were expected, and the resulting lock-up of credit markets.
That said, a huge portion of volatility gripping markets now comes down to investor psychology. What we’re seeing is herding behaviour, pure and simple. A steady hand at the helm is desperately needed to reassure market participants. Bush is laughably barely present–one can only assume because the Republican party wants to keep him out of the public eye as much as possible at this point, or perhaps because he’s busily planning how to invest the proceeds from his war profiteering.
Made me think about who of the two presidential candidates I would rather have leading the nation in a crisis, whether financial, military, or otherwise. I know this will come as a shock, but the idea of it being McCain is unsettling. Look at how he has run his campaign–he flits from one message to another depending on what suits his needs. He comes across as a small man desperately in need of control and all too willing to sacrifice common sense and take huge gambles–including whipping up dangerous levels of hate from the fringe nuts–in attempts to gain that control. So much of his campaign has that unstable, Howard Dean, ‘Yeaarrrrggggghhhh” moment feel. And Dean just had that one slip. With McCain, it’s a modus operandi. That may fly for a senator from Arizona, but it’s not what you want from the man with his finger on the button, and it’s not what we need to confidently lead us out of the mess we’re in.
