HLS: You hit it with the use of the word “psychology”. What we’re now seeing is the traditional overshoot, meaning the pendulum is swinging too far in the other direction (excessive exuberance has been replaced with excessive fearfulness).
I know quite a few folks in the banking and insurance industry and the mood is nearly universal depression. When you discuss the facts, however, things are not nearly as dire. These are seasoned guys and the overarching theme is “we’ve never been here before, so it’s gotta be bad”.
