With the world embroiled in a global recession for the first time since the 1940’s, a lot of what we had accepted as “the way things are” has been turned upside down. Sure, there have been recessions in most regions, however it has been over 60 years since we had a global recession.
One thing a lot of people had taken for granted was that we could keep on expanding forever. This caused a bubble from over expansion when prices lost touch with fundamentals and in the end, turned out to be unsustainable.
Greed drove markets to higher and higher levels, and now that things have crashed back to earth, fear has driven (and continues to drive) markets lower and lower to such a level that we have, once again, lost touch with the fundamentals.
As you can see, we have swung between these two extremes that are driven by emotions at opposite ends of the spectrum.