Wall Street Battles Fear, Hopelessness

This post first appeared on Minyanville.

With Dow futures off nearly 300 points after the first-ever coordinated global interest rate cut, fear is running rampant throughout Wall Street and Main Street alike. Savvy traders play contrarian, combing through proprietary technical indicators and esoteric emotional barometers for signs of a bottom.

Then, just when things seem like they couldn't possibly get any worse, they do: Investors abandon all hope, throw up their collective hands and trample children on their way to the exits.

It’s called capitulation, and it can drive otherwise ordinary people to acts of desperation.

For those who are more morbidly inclined, urban legend and fact collide when distraught traders, having lost millions or more, leap to their deaths from the windows of Wall Street. Indeed, this self-defenestration is tragic. That a life can be so wrapped up in the pursuit and acquisition of wealth that failure can mean in death reveals the fragility of the human psyche.

Nevertheless, and insensitive as it may sound, these suicides are signs of fear, loss and abject hopelessness - and therefore often signify market bottoms. Make no mistake: This isn't a call for the bottom, or even necessarily a bottom - simply an observation of history and the present facts.

This morning, the New York Times reported that a Los Angeles man took his own life, and that of his family, over his bleak financial situation.

By most accounts, Karthik Rajaram was a successful businessman, having started and sold his own company for a substantial profit. He managed his own estate and that of his family, but had recently fallen on hard times. The decision to end his life and take his family with him was, according to his suicide note, to preserve their honor.

I could no more make light of this situation than I could revel in millions of Americans watching their retirement accounts wither away, years being tacked onto careers seemingly by the hour. It is, however, stark evidence that this crisis has migrated from the narrow byways of lower Manhattan to the wide, tree-lined avenues of Main Street.

Whether the stock market bottoms today, tomorrow, next week, next month, or at some yet-to-be-determined point in the future, it's but a pebble on the road to economic recovery. That road is littered with obstacles, hairpin turns and drooling ogres hiding in the shadows, eagerly awaiting a crunchy, salty lunch of bottom-callers and rosy-eyed optimists.

It is, however, still a road whose path, as we often say in the ‘Ville, is more important than the destination. The road must be traveled, the destination must be sought, and for those brave enough, savvy enough and deft enough to protect their capital along the way, opportunities abound on the other side.

Whether it's the wrangling of Wells Fargo (WFC) and Citigroup (C) over what's left of Wachovia (WB), Bank of America's (BAC) most recent attempt to raise capital, rumors that Morgan Stanley's (MS) cash infusion from Mitsubishi may be in jeapardy, or the absolute terror in overnight money markets, the newsfeed is certainly bleak enough to represent a low.

Bottom-picking, however, can be dangerous business. One can't help but remember Joe Lewis, the British billionaire who famously invested $1 billion in Bear Stearns just months before it collapsed.

So before we bravely follow anyone bold enough to don his bull costume -- even temporarily -- let's remember that the bottom will be a process, not a point - and when true, legitimate recovery takes hold, there will be plenty of time to join the party.