The Daily Beast
Wall Street Is Irrelevant
Markets crashed Thursday because Europe looks sick and the U.S. looks feeble. Money manager Zachary Karabell on why it’s developing countries that will carry us out of this mess.
By Zachary Karabell
Aug 4, 2011 11:51 PM EDT
Carnage on Wall Street came fast and swift Thursday, triggered in part by a raft of European selling on the heels of less-than-reassuring remarks by the president of the European Central Bank. But that alone can’t account for a day that saw stocks down almost 5 percent—the worst day since the nasty days of February 2009.
As someone who manages money for clients, I can say that I wasn’t fully prepared for such a drop, or at least not in one day. I have been cautious for some time, as sentiment has turned negative about everything from the global economy to the fate of the United States in post-debt-deal land. Even two-plus years after the meltdown, the psyche of the financial class remains fragile, and Thursday showed that what happens anywhere in the world will ultimately reverberate everywhere in the world. Thursday’s selling was indiscriminate, programmatic, and undoubtedly made a few people big money as the vast majority swallowed losses. Read More…