Loss of reality

There are positive forces and counter forces. And this keeps entities in check. The bearish forces keep bullish forces in check and vice versa. The exuberance is countered by panic and vice versa.

When this system of natural checks and balances are displaced, you have a unnatural growth, a malignant growth. This could be in markets, political sphere or similar. Any system that rises without respect for gravity would ultimately would have to face the realities. This is same for the markets in general and so for American hedonistic tendencies. It is so for the mighty investment banks, as well as its mighty corporates.

The loss of prudence, in the temporary phase of 'good times', an illusory phase in this case, on part of corporates and governments, led to a real rout of common-sense. Now, that the effects of smoking crack is waning off, people are realizing gravity exists even on cloud-nine. Its a reality check.

The checks and counter-checks are essential for progress. As wise men have said, failures are teachers. If you don't have failures, you loose your way. America lost its way. And rest of the world followed the Pied Piper to its doom. How long before the land of cliff is past us, is a big big question.