the.com/market confidence
the collective delusion that everyone else knows what they're doing.
means a shared belief among investors that prices, institutions, and each other will behave predictably enough to keep buying.
from rooted in keynes's animal spirits idea from the 1930s, the notion that markets run less on math than on mood, and mood is contagious.
self-fulfillingbelieving a crash won't happen often prevents one
measured indirectlyvix index literally tracks fear, not confidence
evaporates fastcan vanish in hours, takes years to rebuild
herd-drivenindividually rational traders can create collective panic
for instance
dot-com bubble 2000 — blind faith in growth stocks evaporated within months