To listen to the major news networks, one would think that the dips in the worlds major stock exchanges today is the end of the world as we know it. It is not. This is what is called a market correction.
For far too long, due to China's currency manipulations, China's market values have been inflated. That change a bit last night, when China's markets fell. As a result, markets fell in Europe, and then the United States.
Is it good news? No. Is the end of the world as we know it? No.
The China bubble was bound to burst, and the European and American investors were bound to feel the consequences of that in the market place.
I believe this happened as a correction, but there were also two other factors to keep in mind. One factor was the political venerable bede of our time, Alan Greenspan, remarking on Monday that a recession was likely. That was worth a couple of hundred points down on the DOW. The other was the assassination attempt on Vice President Cheney in Afghanistan. Such things always make markets go bear.
In other words, people, relax. Yes, I know the news does not seem good. But, take a deep breath. Don't dump your investements. Just stay the course and take a deep breathe. The American, European, and yes, Chinese economies are very strong by historical measures. The events of today, and perhaps of the next few days will just be a hiccup.
The only way this could result in a recession or depression is if investors overreact and start selling at high rates.
If that happens, which I admit it could with President Bush's approval ratings so low and such an angst in America, then Katie bar the door.
But, it won't be the market's fault. It will be the people's fault for overreacting to a logical adjustment.