The MarketPsych Fear Index has seen an uptick recently.
One reason I believe it has meandered of late is that a critical and catalyitc component was missing: The appearance of a nightmare scenario that the individual can; 1) experience viscerally, and 2) consider credible.
The Bear Stearns news today presented just such a scenario, and it sent a shockwave of fear through the markets.
We simply do not live in a world where "Modest CPI Numbers" can compete with "Wall Street Institution Imploding Overnight" in a market-moving contest.
If it sets off a "fear cascade" (think dominoes), we may just see Market Panic make it's first reappearance in years.
Getting my cash ready now...