RWM - When Fear Is The Dominant Cognitive Principle Investors Are Led Astray
In Q4, fear reasserted itself as the dominant cognitive principle.
It wasn't the first time that's happened post-crisis, but it was one of the more acute episodes of insanity becoming contagious.
The US economy wasn't on the verge of falling into recession on any conceivable metric and while the global economy was indeed decelerating, there was scant evidence to justify the kind of panic that manifested itself in December's price action.
In a true testament to the self-reinforcing nature of fear, US government officials got caught in the loop. Steve Mnuchin, for instance, famously called