Inside Money: Meltdown moments temporarily suspended

Overwhelmed by virtual rubber-neckers such as myself the recently upgraded NZX website froze on Monday morning.

Hoping to witness another historic market meltdown in glorious internet HD format many viewers were instead hit with error message 503 "Service Temporarily Unavailable".

503 was right on the money, the NZX site was only down for a few minutes and even the NZX itself wasn't as down as the hype predicted.

By lunchtime the NZX50 index had only lost 2.35 per cent on 'light trading', recovering somewhat from the 3 per cent opening drop.

Across the Tasman, Australia began almost as badly before clawing back over half of the early decline. Last time I looked the ASX was down less than 1 per cent (but it might all turn to custard after lunch).

A NZ Herald story blamed retail investors for leading the NZX down as the professionals remain on the sidelines for now.

Every time there's a market sell-down the rationality of investors is called into question - are they right this time or just crazy or maybe both?

For instance, a New York Times piece today, sought an explanation for last week's equity market rout in the burgeoning field of neuro-science.

According to the article, the financial collapse of 2008 "recalibrated investor psychology", leaving them twitchier than ever.

Denise Shull, who consults with investment firms on "neuroscience strategies", offered the NY Times this post-crash crash theory:

"How your brain deals with uncertainty - when it recognizes it is in an uncertain situation - is that it tries to pull it from a bigger context.

"The context of 2008 and not wanting to see it happen again would absolutely influence these people to hit the sell button. Then it becomes self-fulfilling for the market."