At the opening of August, we saw moments of panic in the market that were reminiscent of 2008. Investors seemed to be more reactionary than ever.
Where are we now? Well, on the last day of this tumultuous month, the Dow eclipsed a high for the year. It’s an economic identity crisis and the Dow is clearly a mirror to the mixed bag of news we’re hearing each day.
In August, the markets see-sawed, experiencing wild swings as investors gained new information about the debt crisis, S&P downgrade, jobs market, and European fiscal crisis. While the Dow regained strength, the volatility was jarring.
Many assume the second half of the year will be slower in terms of economic growth, with worries weighted heavily toward job creation and European markets. Some companies may be much more conservative in their 2012 budget planning period, ultimately hurting projections into early 2012.
I think this is hardly 2008 though. As Warren Buffett says, the regenerative power of American capitalism is remarkable. This country has the talent and ideas to continue growing.
The contentious debate around raising the debt ceiling and the resulting S&P downgrade shook the country’s confidence that our leaders can solve our most important problems. Until we have a clear path to addressing fundamental economic problems, we will remain subject to significant volatility. We must demonstrate to the country we have an ability to collaboratively solve critical problems. In the near-term, job creation is the single most important problem we face. With the right type of policies, entrepreneurs and business leaders want to create jobs and move the country forward.