It really wouldn't matter except that the 294-point plunge by the Dow Jones index knocked on to markets around the world, shaving the odd billion or several from the collective value of Australian stocks in the process and giving headline writers the chance to type something faintly scary about doom and gloom and the end of capitalism as we know it - the way they always do.
Yet Wall Street's dive was really about nothing much at all, just a case of hopes and wishes getting ahead of reasonable expections.
It would be wrong to say that I began to worry last week about how Wall Street would react to the Federal Reserve Board's interest rate decision last night as I simply don't worry about such things these days - they come and go and matter little in the longer run. But I did begin to suspect American investors were setting themselves up for disappointment.
The important lesson for Australian investors is that they shouldn't take too much notice of Wall Street's over-reactions on the up or down sides.
Let's back track: US markets had been steadily building up their expectations of an interest rate cut out of last night's Federal Reserve Board meeting. There were good reasons to expect the cut - mostly the on-going credit confidence crisis and fears of a slowing economy.
Thanks to various speeches and statements by Fed officials, the expectations became a sure thing that rates would be cut by 25 basis points. But then hopes began to build further.
Why stop at 25 points? Why not 50? Or at least why not 25 off the federal funds rate and 50 off the discount rate? (The discount rate is what the Fed charges banks.)
Those hopes and dreams of cheap money that would kick along the economy and fuel plenty of speculation gave Wall Street its biggest two-day rally in years late last week. That's when I thought I could see an accident on the horizon.
With all that expectation building up, there was every chance the market would be disappointed. A 25-point cut was much more likely but that and more had been priced in. Thus there was really only down-side from the actual announcement.
And so it proved to be. Punters were cheesed off that the Fed didn't cut more or at least talk-up the likelihood of further cuts in the near future. If you read the Fed's statement http://www.federalreserve.gov/newsevents/press/monetary/20071211a.htm yourself, what you find is an entirely reasonable and rational discussion that leaves you thinking the central bank is following the situation closely and reacting as required. Which is what a reasonable and rational investor would hope.
With the amount of volatility around the markets at present, reasonable and rational people can be swamped by the mob. If it's any solace, last night's dive didn't claw back all of last week's rally, so we've still come out ahead.
And Australian investors, God bless 'em, have displayed some healthy scepticism about Wall Street so that our market's fall today is less than half that of Wall Street on a percentage basis.
There are good reasons to discount the Dow's wilder moves whether they be up or down. The investor who can look through the noise of the day's headlines and concentrate on the underlying values is the one who eventually wins.