(Image source: Bloomberg)
BY JIM FLINK
ANCHOR MEGAN MURPHY
You're watching multisource business news analysis from Newsy.
Fear. Panic. Heck -- Run for the hills! The markets are schizophrenic. Bulls are running Thursday -- traders and investors -- holding up a finger to gauge the wind.
CNN’s Piers Morgan talks with financial guru Dave Ramsey about the market’s ‘stinkin’ thinkin.’
“Well it’s just emotion - which makes it crazy. Which doesn’t get you where you want to go. ... It just scares the crap out of you. It really does. It does me where I have my 401k. But then you have to step back and say, the fear is based on the short-term.”
Forget fundamentals. Because -- the numbers don’t seem to back up the fear in U.S. companies. One analyst tells Las Vegas’ KSNV -- that doesn’t seem to matter -- and investors need to be cautious about selling.
“70 percent of companies today -- publicly traded companies -- are reporting growth and profits -- earnings that are exceeding Wall Streets’ estimates. ... When these type of high emotional -- what we call fear oriented markets -- Once they start -- it is too late to make many of those decisions.”
But Moody’s John Lonski tells Fox News, there are legitimate reasons to fear. Besides, rational or not -- fear is enough to drive a wobbly economy -- into a double dip ditch.
“And fear can be a self-fulfilling prophesy of sorts. I’m very much concerned about how financial market turbulence, lower equity prices, wider credit spreads could actually tip the economy in a double dip recession.”
Still, an analyst tells AME info -- despite all the market turmoil the world over -- fear in U.S. markets -- can’t be compared to fear in overseas markets.
“The difference is, In the United States, the banking system is actually relatively sound. There may be a few weak companies. But generally sound. In Europe it is unsound. There are many companies there that still don’t have significantly high enough capital ratios. They are fundamentally weak banks.”
So are we nearing capitulation? The Wall Street Journal says, that’s the sign prices have bottomed out -- sellers have been washed out. Uh-- not yet.
“...the view that capitulation has arrived requires a leap of faith for many market participants. They must conclude that the current selloff is just a 'panic.' If it is a panic, then it must not be a reflection of some new, more pessimistic view of stocks’ prospects, at a time when global economic growth is looking thinner. Once all beleaguered, would-be sellers throw in the towel, a buying opportunity should emerge.”
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