Market Behavior

The stock markets have been very volatile in the past few days and that can be noticed by movements in the volatility index (VIX) in the past few weeks. A state of confusion prevails as we start the day, if we wake up hearing that Europe had a reasonably good day and Euro gained strength, the futures start rising. All of us know that market news has significant influence on its behavior. However the impact of market news should not be that significant that it becomes the most influential factor as economists, analysts are all working in the normal course and markets are expected to bake in the good or bad news in its pricing as it moves along with the exception of the unexpected news such as the oil spill or an unexpected disaster like the World Trade Center attacks caused by terrorism etc.
Going a step further we are now lead to believe that the economists and analysts are unable to make a reasonable assessment of the state of the union or economy and the fundamentals are subject to higher levels of volatility causing the market to react just for the day or a short period and not looking beyond. This in itself creates volatility. It is for lack of a better word the "Inability" to make reasonable assessment of the future trends that is causing volatility.
It is important for the world leaders to interact and work together as a team to enforce stability and Governments have to support each other to the extent that the world economy does not suffer as the consequences are far reaching and if the US has a cold, India and China may get the flu, has anyone ever imagined what will happen to China if the US decides to no longer import any goods from China? It is a possibility although not a healthy option for both countries. Similarly the European crisis is not restricted to just Europe and can have its consequences go far beyond. The earlier we get this World union the better it is for the future.