Signs that the Market Panic is Over

In the month of October 2008 financial markets struck real terror into just about everyone. The panic phase now appears to be over, replaced by mere worry about the severity and length of the recession. Here are some signs of the change in mindset:

• stock markets seem to have stopped huge 10+% day to day to day swings upwards and downwards
• perfect correlation of markets has stopped, where everything is either green/up or red/down, in other words investors are beginning to look at the differential prospects of stocks ... the holdings in my portfolio with various asset classes has a comforting mix of ups and downs - diversification is beginning to work again

• politicians have gone from saying that we are all in this together to blaming each other for the mess
• the tone and body language of hosts/presenters on Bloomberg TV has shifted from end-of-the-world history-in-the-making to normal blasé cool just-another-recession
• mainstream media is doing the customary never-let-it-happen-again analysis of the mistakes that led to the crisis, e.g. CBS' 60 minutes on Credit Default Swaps.
  
• rich investors are still talking about opportunity or even recovery - see Steve Forbes interviewed October 25th on BBC, Warren Buffett's opinion on October 16th in the NY Times, one of the few with a positive view at that date

All is not sweetness and light, however. Rich investors like George Soros, Jim Rogers, Peter Schiff and Marc Faber who predicted the crash are busy cashing in as the credit deleveraging process they predicted continues painfully to unfold.