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Disconnections, Roller Coasters and the Hang Seng

Disconnections, Roller Coasters and the Hang Seng

Once upon a time, there was something called the Asian contagion or the Hang Seng fever.

This was back in the late 1990s when I was a stockbroker at Schwab. The Hang Seng index in Hong Kong tumbled, the Dow Jones Industrial Average followed … trading was halted as the so-called circuit breakers all kicked in to prevent a market meltdown which, in retrospect, wasn’t really the solution as the market simply needed time to adjust itself.

I had the day off when the Hang Seng came apart, it might have been for Rosh Hashanah but it’s hard to recall. What I remember was coming in the next day and seeing the tumble continue, at least briefly, before buyers started coming back into the market. Those of us on the phones were scrambling to keep up with all of the orders coming in … some selling out of panic, others buying to take advantage of everyone else’s fear …

Being fully disconnected from that world – not being in the stock market trade, not even being invested in the market these days, last week’s 15-minute tumble down the rabbit hole didn’t really register in this house. It was bizarre to watch but also interesting to behold, in that the tumble came and then the market corrected as it usually – not always, but usually – does.

If anything, the events registered here only in as much as the fall impacted many of my clients. Much as was said a few years ago, though, the losses were on paper and only became reality when someone bought in to the panic and sold. The market bounced back … there still will be ups and downs but the large hiccups tend to be flattened over time. Roller coasters gyrate all over the place and generally come back to where they started when all is said and done.

Canadian buyers can understand the whipsawing effects going on … for about 37 seconds a week or so ago, the Canadian dollar was worth more than the U.S. dollar. Then the greenback rallied and now the loony is working it’s way back to par again. In the interim, real estate here in the Phoenix area became either a few percentage points more or less expensive, depending on which move a buyer seized upon.

It was during the gyrations in 2007 that I decided the time had come simply to keep my head down, keep working and keep paying the bills. What happens on Wall Street doesn’t have anything to do with the cable bill due this week or the car payment due next week. It’s one of those things that may as well take place in a separate universe for the direct impact it has.

This isn’t the case for everyone. But for the rest of us, it seems like we’re better suited looking to what is going on in our own immediate universe and how that impacts the actions we take – whether to buy that house, that car or whether to go all out on the disc jockey for the upcoming bar mitzvah – than to look at a Wall Street glitch, wrap ourselves in sackcloth and await the end of days.

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