The bears are on TV, getting their 15-minutes right now.

Investors, regulators, brokers, dealers, and the press have all expressed concern over the level of stock market volatility. But the perception that prices move a lot — and have been moving a lot more in recent years — is in part merely a reflection of the historically high levels of popular indexes. The drop in stock prices on October 13, 1989 — while large in terms of a point decline — was not even among the 25 worst days in NYSE history in terms of percentage changes. While a 6 per cent drop in prices is not inconsequential, neither is it a rare event when considered within the context of the behavior of stock returns over the 1802-1989 period. — G. Willian Schwert, Stock Market Volatility

While Tice, Fleckenstein, Faber et al are enjoying the fruits of their raindances, serious students of the market might consider reading Bill Schwert’s Graham and Dodd plaque winning paper: Stock Market Volatility.