Apocalypse now? Markets seem set on a self-fulfilling prophecy

All this talk of a new financial apocalypse, so soon after the last one, is starting to annoy me. Partly because investors as a crowd are so irrational; -partly because so much that governments and central banks have done to contribute to the current market mayhem seems to work against the sensible efforts of ordinary folk to build a bottom-up recovery.

Markets first. We’ve had hissy fits about China, even though connections between the Chinese and UK economies are so marginal. We’ve had near-hysteria about the prospect of (and in the US, the start of) rising interest rates. Now there’s a panic about European banks, because Deutsche Bank, midway through restructuring, looks weaker than it should; within days, traders are reassured about Deutsche but down on Credit Suisse. By the time you read this, they will have spotted another weakling — and short-sellers will make another killing out of it.

So it goes: markets are not just unreliable indicators, they are also populated by chancers and fools, and that makes them dangerous as mood-makers.