Hope for the future.

It is amazing just how much our psychology or our over all mind set can effect the world economy. There are times when it seems like the only thing influencing the stock market is sentiment. The stock market and therefore our economy can not survive if everyone is depressed or fearful about the future. The economy in part and the entirety of the stock market are really just indicators as to the levels of hope or fear about the future. Our current recession has clearly revealed how quickly and abruptly growth can turn to stagnation if counter parties lose faith and trust in one another. This is true for banks trading with banks as well as individual investors. There has never been a clearer more powerful example of how large of a role attitude play in the world. It is always said that a positive attitude will lead to a better life for individuals. People learning to be more positive gradually start to see how they create their future as their expectations change when they learn to trust more in the universe. It is an example of faith. We become the creators of our future by having faith and expecting better things to happen each day. Our minds our creative and can create our future and collectively they can also make or break the stock market. Once people lose trust in financial institutions or question whether CEO's are lying psychology begins to change. Banks began to question the validity and truthfulness of other bankers, investors begin to question the transparency of the books and soon not one trusted anyone or any bit of information being disseminated by the financial institutions. Much of the distrust of banks was well founded, but a lot of it may just have been collateral damage. Regardless, the fact that bankers stopped trusting other bankers and would not loan funds to each other to meet short term capital needs revealed that many skeletons had yet to be discovered.
I thought about the psychology of the market recently because of the current uptrend in stocks. Psychology has become slightly more hopeful about the future even though we are still losing massive amounts of jobs and they banking system has not cleared the "toxic" assets that started this entire meltdown. But it all doesn't seem to matter as long as people think it is ok to come outside and play again . The worst may or may not be over but the amazing reality is that market psychology will decide when it is time. Once people have more faith than fear about the future we will start the run of a bull market again. We may have seen the beginning already but it will only take a slight shift in sentiment to lead again to a chain reaction back to test the recent lows.