Greg Ip ponders them:
Buttonwood notes that in the past markets have tended to overreact to disasters, whereas in this case, the response may be justified given the prevailing uncertainty. My own observation is that uncertainty is always high in the wake of disasters with little or no precedent.
A classic example would be the 9/11 terrorist attacks.
The cost of destroyed physical capital was quantifiable; what was unknowable was whether more terrorist attacks were coming and how much increased security precautions would disrupt historical business patterns. Relatively tiny events in the wake of 9/11the anthrax attacks that fall and the sniper attacks around Washington, DCextracted an economic cost far beyond that related to the initial attacks because no one knew if they were the tip of a much deadlier iceberg.
(Photo: A businessman is reflected on a share prices board as he watches the sharply dropped figure of the Tokyo Stock Exchange in Tokyo on March 15, 2011. Japan's share prices dropped 620.76 points to close at 8999.73 points at the morning session at the Tokyo Stock Exchange, a day after their lowest close in two years following Japan's devastating natural disasters and nuclear emergency. By AFP/Getty Images)