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Recent history cautions against excessive pessimism.
"There is no need for excessive pessimism," he said.
Investors are erratic, swayed by waves of excessive optimism followed by waves of excessive pessimism.
But Mario Ohoven, the president of the German Association for Small and Medium-Size Businesses, warned against excessive pessimism.
Conversely, excessive pessimism could lead to empty shelves, disappointed customers and red faces in the executive suite.
The Fed's worry now is that excessive pessimism on the part of executives will dampen, or even stall, the current recovery.
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One benefit highlighted is that of "reducing the impact of excessive market pessimism on sovereign borrowing costs".
They interpret their findings as an indication of 'price pressure' by irrational sentiment traders in financial markets who drive markets up (down) by their excessive optimism (pessimism), before rational arbitrageurs can force the prices to revert back to fundamentally justified levels.
We do not think that such a stalemate obtains, because we think the implicated methodological pessimism excessive.
Bill Cline, chief economist at the IIF, reckons that a messy debt-restructuring in Argentina could jeopardise the entire asset class of emerging-market bonds.Such pessimism may prove excessive.
Plus the pessimism seems a bit excessive; more than 18% of Polaris' shares had been sold short as of Aug. 10.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com