Friday Doomsaying and the Need for Cooler Heads

Ever have a day when you look at the news feed and think, shit according to these guys it's all done, we're finished! Today, was one of those days.

As we all know the DOW headed south again and the world economy is suffering from what can best be described as a chronic form of food poisoning. And guess what every country was at the charity dinner last night and they all ate the potato salad. This week has seen global markets plunge to some of their lowest levels in years and also some of the most depressing newspaper headlines of recent memory.

Just looking at the titles of some of the editorials from major newspapers all over the world just made me kind of cringe, and I kept running through REM's "It's the End of the World as We Know It" in my head (see video below).



Here are a few of today's most paranoid headlines:

Crisis Marks Out a New Geopolitical Order (Philip Stevens, Financial Times)
The End of American Capitalism? (Anthony Faiola, Washington Post)
Walling Off the World: the Era of Ever-Free Trade has Ended (Irwin M. Stelzer, The Weekly Standard)

Something tells me they don't feel so fine. There were some confidence boosters out there who attempted to provide a little context to the situation. In the Wall Street Journal, former Federal Reserve Chairman Paul Volcker, penned perhaps the best call to action of the week. If you're looking to really go back and lay some blame, check out John Steele Gordon's, "A Short History of the American Banking System" (also in the WSJ). Gordon seems to blame our inability to deal with the crisis on Thomas Jefferson's distrust of Alexander Hamilton and centralized banking.

I am not anywhere near qualified to prognosticate about when the crisis will end or whether any of the above authors are overreacting, though I suspect many of them are. Mostly what I'm trying to get across is the extreme statements that are being made are seemingly rooted in fear and little else. Let's see how this plays out and not predict the downfall of the entire world economy following a panic that is less than a month old.