The burden of uncertainty

It is a well known fact that one of humankinds greatest burdens has to do with uncertainty, and just like its distant cousin, infinity, our minds have a difficult time coping with the concept. Countless studies have shown, for example, that we are much happier once something that was uncertain becomes certain, even if it happens to be something unpleasant. Apparently the mere presence of certainty removes a whole layer of tension.
Markets behave in a very similar manner and the degree of uncertainty can easily be measured by the degree of volatility. It is why in times of serious trouble, as in the second half of 2008, volatility levels can rise dramatically.
As uncertainty is perceived to be an unpleasant experience, it acts as a powerful driver that pushes us to come up with solutions to counter it. The insurance business is a perfect example of an industry that has flourished as a direct result of mankind's desire to counter uncertainty. Corporate earnings announcements is another example whereby the time frame between earnings reports have been shortened in order to reduce the degree of uncertainty regarding the health of a business. Such strategies do come at a price, however. By increasing the frequency of earnings results in a given year, the firm may be sacrificing long term objectives for short term gains.
With all this in mind, the EU's willingness to bail out Greece and Abu Dhabi's intervention on Dubai should come as no surprise. In both cases it would seem that the uncertainty of doing nothing is just too large of a burden to cope with.