My comments: For many of my clients, the recent quarterly statements from their custodian was disturbing. The numbers suggested and does suggest that their investments are at risk and some are asking whether we’re looking at another major financial crisis. None of this is new to me; I’ve been down this road several times before and we’ve all survived. But I fully understand the thought process and so here is an effort to put all of this in perspective.

The ideas expressed here are not just mine but those of someone whose financial blog I follow. His name is Jeffrey Dow Jones and he expresses his thoughts very well. I wish I had his ability to write.

A lot of the financial press recently has been dominated by forecasts for a new bear market. I think it has to do with a few reasons.

1. We’re still too close to the trauma of 2008. It’s like post-traumatic stress disorder. Every time we see the market dip a little bit (or a lot) it’s a flashback to our moments of acute trauma. Psychologists were particularly enamored with this when dealing with soldiers who had returned from the Vietnam War. They’d been exposed to continual trauma during their tours of duty and they brought that psychological damage home with them. Many of them would carry it for the rest of their lives.

Arguably, you and I and everyone else who had a front-row seat in the financial industry won’t forget what we went through or why. It will shape our decision making for the rest of our lives. It will also affect the type of media that we consume, and for those of us in the business, the type of media we create. We’re on continual watch for it to all happen again.

2. We deified people who “saw it coming”. Whether it was Meredith Whitney and her Citigroup call, John Paulson and his shorting of RMBSes, or Nouriel Roubini and his predictions of economic and financial crisis, we raised these people on top a golden dais for having called it correctly. Nevermind the fact that none of us were really listening to them back when their predictions would have been of any use. We listen to them now. And nevermind the fact that most of the people who called the crisis & recession correctly have been consistently wrong ever since. This isn’t about being right or wrong, it’s about why we listen to the voices that we do.

For some strange reason, we haven’t invested the people who called the bottom in 2009 with the same authority and respect. Why? Is it because, as generally loss-averse creatures, we would rather avoid pain than experience a similar magnitude of pleasure? Is it because bear markets and crashes are more difficult to predict and more spectacular in nature? The long-term trend of the market is always up, up, up. There’s arguably more value in knowing where the potholes will be. Whatever the case, there is a new cadre of voices looking to make a name for themselves and this is how they’re trying to do it. The problem is that there are a ton of these guys today. There weren’t in 2007. How will we choose whom to deify?

3. There’s little cost and a lot to be gained by making these types of predictions. It’s easy, really. Anybody can do it. If the market doesn’t crash 1987-style in the next few months, will anyone remember who it was that said it was going to? His call will be forgotten, buried under the massive volcano of information erupting daily.

4. Many of us are secretly hoping for a crash. I know that sounds perverse. But a lot of folks completely missed out on the post-2009 rally. Maybe they read too much ZeroHedge or whatever, but they’ve been on the sidelines all these years. A lot of them are bitter (or delusional). There’s a hefty amount of schadenfreude too. One of the things you may not realize about this industry is that to many, it’s more important to be right than to make money. I know that sounds totally backwards, but it becomes obvious when you start watching what people actually do. Ego is a strange thing and it causes people behave in ways that make little sense.

For these folks, a collapse is the only vindication. The only way they’ll be “right” after sitting on the sidelines for all these years is if an ugly bear comes and takes it all away. There are more of these people out there than you think. And a lot of them get paid to scare you.