Why Wall Street ' s concerns needn ' t be yours

Bear Stearns shareholders are fairly happy now. Instead of getting $2 a share for their stock, they'll get $10 a share. J.P. Morgan quintupled its offer after investors, apparently considering $2 too much of a fire sale price even amid the current credit crisis, began buying shares of the company. Even though $10 a share is still only a third of what Bear was trading for  on the Friday before the Fed brokered the Morgan deal, Wall Street grew positively giddy about the change, and the Dow rose more than 200 points. The dollar stopped falling and and crude oil fell to $10 less than its record. Giddy-up! There was other good news. Sickness is healthy for Walgreen's, which reported 5% higher same-store sales on heavy ring-ups at the drug counter. And Tiffany stock rose 11% on news that its profit fell 16%, because investors expected worse. An analyst predicted that Bank of America will post a $6.5 billion loss, but that didn't seem to bother investors so much. Wall Street was in the mood to be in a good mood, and picked good news to react to. So, should you be giddy as well? Your household and your business will be driven mainly by the price of fuel, which is mostly driven by demand. It's true that most of the recent run-up was driven by institutional investors pulling money out of the stock market and putting it into oil futures, and now some of that money is going back into stocks. But mostly oil costs more because the world is clamoring for more of it. Your own finances could also be affected by what happens to tourism -- a cool, gentle easing that the local economy can handle, or something more precipitous. It's worth noting that Wall Street is a mob, and tends to overreact to news in both directions. A week ago the Bear Stearns cash crunch felt like some kind of death knell. Now some are acting like everything is fine again. We weren't crashing then and we're not fine now. Let's be measured in our response.