Zachary Karabell: No Financial Armageddon

October 18th, 2011

The Daily Beast
By Zachary Karabell
Oct. 17, 2011

Once more into the breach we go. After a strong week where markets regained some footing, Monday once again saw a sharp selloff of nearly 2 percent. These wildly volatile days have been the norm since mid-summer, and as any market maven will attest, such volatility usually means that there is more to come.

Markets may have jumped the rails, but they aren’t good barometers of the real world either. The global economy, let alone our national one, did not suddenly change from good to bad over the weekend, just as it did not suddenly shift from dire to OK two weeks ago when the markets reversed weeks of precipitous decline.

The U.S. economy remains sluggish at best, and as the Occupy Wall Street protesters have duly noted, regardless of whether GDP expands 2 percent, or flatlines, regardless of whether companies make a mint, and whether or not the Dow soars or slumps, tens of millions of Americans have seen no income growth for at least a decade, and a few million others have done exceedingly well. The euro zone is similarly stuck in low or no growth, with high affluence and very high unemployment, but that was true six months ago, and six weeks ago; yet markets have swung widely even so.

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