Tough times bring the jitters

by Stephen Butler

My Brain Fitness Program arrived in the mail as a token of appreciation for my charitable contribution to KQED. Step One is to read the book that came in the kit entitled "The Brain that Changes Itself." This is designed to convince brain fitness optimists that the brain can, in fact, change with conditioning and training. Considering the year's market gyrations, a dollop of altered consciousness, thanks to neuroplasticity, would probably serve me well at this point.

I have a deep abiding faith in the stock market's ability to undergo a recovery from the slide we've been enduring month after month. It shouldn't be hard to believe. There has never been a market crash that wasn't followed by a major surge to eventual new highs sooner or later. Then, why am I feeling so unsettled?

The answer lies with my lack of brain fitness. The kit has arrived just in time. My problem, as I now perceive it, is that my amygdala has been kicked into high gear in the inner recesses of my brain, and it is making me very nervous. This brain section triggers the "fight or flight" syndrome, and it is largely unresponsive to rational thought. Elsewhere in the brain, my cortex is struggling to remind me that the stock market will recover sooner or later and that I need to stay invested or my paper loss will become a real loss.

None of this is easy. Each week some new disaster comes down the pike offering yet another example of how touching one strand shakes an entire spider web. I can live with what's been evident so far, but my concern is that I don't know what might be coming next. The fear of the unknown could prompt me to make a dumb decision if I'm not careful. My amygdala could trump my cortex.

With the exception of hedge funds still struggling to liquidate in order to redeem their embittered clients that are bailing out, I think that most of the panicked sellers may have cashed out by now. The stock market may be approaching an exclusive club of "buy and hold" investors. We all know what happens when any market becomes one of owners who don't want to sell very badly and bottom fishers determined to buy. Markets are said to be "thinly traded" and prices go up a lot.

I feel less nervous when I focus on the good news. In a few months, the dollar has risen almost 25% against most other currencies. That means that those countries that have loaned us so much money will probably keep the tap open. That was one of my biggest concerns. Housing sales have started to increase. Regional banks are having a field day at the expense of those nine mega-banks that we taxpayers now own and effectively control. The myth that people on Wall Street were smarter than the rest of us has been effectively shattered. Imagine. Goldman Sachs was within a hair of going under --- saved only by the fact that they became a bank overnight and signalled the end of investment banking as we once knew it. We even learned that the book "Maestro" got right what it said about Alan Greenspan --- that he was nothing more than a figurehead who exuded confidence "like Princess Diana."

We'll eventually look back on this year as a productive watershed of financial events. Meanwhile, to keep the rational side of the brain in high gear, according to my brain fitness program, you have to do more than just repeat what you've done for years. Reading the paper, practicing the same profession and speaking the same language are all fifty-year habits that make the brain go south. The brain needs stimulation. The challenge of learning new skills gradually sharpens everything up. For my part, I marched over to Sterling Flight at Buchannan airport in Concord and took my first flying lesson. Talk about focusing and concentration. They had me taking off and landing the plane on my first time out. The stock market doesn't look so scary anymore.

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