Spirit of Financial Markets in the phase of Massive Corporate Failures

In recent months, investors all across the country have time and again tolerated reports of highly negative developments. Following the incident of Lehman Brother’s bankruptcy filing, the VIX, often termed as fear index, marked tremendous anxiety levels in every investor. In the due course, VIX reached a new high – getting into a unique territory. It can be a subject of extreme questioning, as to what extent does VIX serve as an exact and accurate indicator of marketplace fear. However, it would not be advisable to get rid of this barometer as there is always a chance to improve the standards. More ever, it does deserve some credibility.

One can also think as to why there is so much fear in investors? There is no doubt that investors have been hit badly by persistent waves of economic nightmares. Standing alone, psyche of many Americans would have got impacted by these developments. The problem is that the magnitude of their problem has been increased by a chain of corporate scandals which arose earlier in the decade. One can also say that the consequences of dishonesty and fraud can be attributed to those who called the shots at companies like Enron, WorldCom, Adelphia and others without any conscience.  The Disbelief produced by such wicked conduct must still be factored into equation. The memories of this obvious cheating involving billion of dollars can not fade away especially when there were tools like analyst ratings and IPO processes.

If you want to put this in simple words, investor’s confidence is the main reason for the markets to flourish.  Only this trust can make the market stable and prosperous. Taking these clues, administrative bodies should do everything possible within their domain to bring back the confidence of the investor. This is the only way as the welfare and prosperity of our nation depends upon it.