They say this is a normal economy and that the days of the swinging pendulum are over. We all like the sound of that and that s the problem. All it takes to turn overconfidence into 1991 like gloom and doom is one big, bad news event. We are so highly attuned to the daily flow of the news that half the time News Faces and Headline Writers are steering our wheels for us. One hears all about the booming economy and one feels good going ahead to buy more.
Confidence is fragile and fickle.
And there are those who are preparing for a downturn. They are laying in wait for it because they have laid up capital to invest in stocks or real estate and remember the last bust which was really a transferal of wealth from the middle to the rich. The people with cash get richer in the downturns. They are just waiting for Microsoft to drop to 35 or the FDIC and the RTC to come back and sell big buildings for cheap. They are convinced it will happen all over again.