From the market's recent roller-coaster ride, two views have emerged about what this volatility portends for the immediate future of the economy and the markets.
In one corner are the optimists, those perennially sunny sorts whose relentless good cheer can border on the annoying.
In the other corner are the pessimists, always finding the single cloud in the best of times, suspicious of happiness and cynical about the real motives of people.
The optimists believe that what happened in recent weeks was a healthy and relatively harmless correction that was needed after four years of positive returns. Investors had become too complacent and needed a reminder about the inherent risks of investing in financial assets. On many indicators -- corporate profits, inflation, unemployment, incomes -- hey, they still like what they see.
The pessimists don't see low inflation, low unemployment and high incomes. They see a growing default rate on subprime mortgages and a weakening housing market, large trade and budget deficits, looming entitlement costs and falling productivity.
Both the optimists and the pessimists think of themselves as realists -- people who see the world as it really is.
Now part of the reason for these different viewpoints is just a natural function of one's temperament. We all know gloomy donkeys like Eeyore from "Winnie the Pooh." And we all know people with the bouncing-off-the-walls energy of a Pat Croce.
But in addition to the distorting influence of one's temperament is another, even more powerful complication: politics.
So poisonous has become the political atmosphere that supposedly neutral and sober comments on the economy are really thinly disguised political baseball bats, used by political opponents to beat each other senseless.
On the One Hand ...
In short, if you're a Democrat, this is a miserable economy; if you're a Republican, it's a great one. Or, to put it another way, if you're not in charge, the economy stinks, or it will stink very soon. And if you are in charge, things are pretty good, or at least not that bad.
As it so often happens, discussions of current economic conditions are distorted by where you fall on the political spectrum. The different sides are not so much interested in the economic "truth" as they are in scoring political points.
So Republicans predicted disaster with the Clinton tax hikes, and Democrats predicted calamities galore with the Bush tax cuts. Neither turned out to be true. Ah, say the Republicans, that's because the Republican House reined in Democratic spending in 1994. Ah, say the Democrats, just you wait, the fiscal irresponsibility of the Bush administration will reap what it has sown at some point soon.
And around and around we go.
What's lost in all this political posturing is the truth about the past, as well as the future of the economy and markets.
And what is that truth? Well, that's something no one can really pinpoint.
Deciphering the past -- and its relevance to the present -- is more complicated than any one person can get a handle on, even before you throw in the distortions of personality and temperament. As for the future, don't even bother.
Fred D. Snitzer is chief operating officer in the investment-management firm of Prudent Management Associates, specializing in high-net-worth and tax-deferred asset management.