Thanks to Waitangi Day, the New Zealand sharemarket was spared the panic that can seize traders everywhere when Wall St sneezes. By the time the NZX opened yesterday the New York Stock Exchange had recovered overnight and the word on commentators' lips was not "cash" but "volatility".
The prognosis seems to be that stock prices are entering a period of greater fluctuation after their long bull run that started since soon after the 2008 global financial crisis.
Like housing and other equity investment, stockmarkets have benefited from extremely poor returns on other forms of saving as interest rates were kept low in leading economies to help them weather the post-crisis recession.
Interest rates even went below zero in some places, effectively punishing savers for not spending. And when near-zero rates proved to be not enough in the United States and Europe their central banks began "quantitative easing" — buying their government's bonds and flooding their economies with cash.
This artificial — and dangerously inflationary — antidote to recession was not expected to last as long as it did. Keynesian theory is not precise about how long monetary and fiscal stimulants may be needed. This one seemed to be needed for the best part of a decade.