I am hearing a score of different opinions about how this rescue or that bailout is going to affect the credit market, stock market or housing market.  Seldom do the agree… most float to the extremes:

• It won’t have an effect at all, it is wasted money
• If we don’t, the world will crash down around us

And yet, here we sit on a VERY down Dow (could turn tomorrow) and a still frozen credit market.  Of course, the programs take a little time (at least the proponents tell us that) to get rolling.

But, the point is that the stock market, housing market and event the credit market all run on emotion.  Forget metrics and statistics.  Forget ratios and charts and history.  The only thing that really matters is emotion.  And the only emotions that matter are fear and desire (some say greed).  When people are more fearful than desirous, they pull money out and the market goes down.  When desire over-rides fear, the markets go up.  They are seldom balanced. 

We are living in a world of fear…

Perhaps the governmental actions will ease the fear.  Maybe not.  But, the point is simply this.  We have to play the game to find the outcome.  Every time two sports teams square off, there is a statistical favorite.  And many times they win.  But, not always…  That is why the game gets played.

Regardless of what we think will happen with the intervention in the markets, we have to play the game to find out the results. Had we not intervened… we’d still play the game.  Just a different home team.

Game on…