For those of us who remember the Dark Days of the mid 1990s, when the media prefaced nearly every reference to Apple with an adjective like “beleaguered,” the current climate of pro-Apple mania brings a certain “we knew it all along” satisfaction. But the pendulum has swung far enough in the opposite direction to trigger irrational behavior.

This week offers a prime example of how both the media and Wall Street sit on a hair-trigger when any nugget of Apple news surfaces, no matter how dubious its origin. On Monday a report from a Taiwan-based JPMorgan analyst that a cheaper “iPhone Nano” was likely before the end of 2007 caused Apple’s stock to jump 3.2 percent, though it slipped back by the end of trading. The analyst, Kevin Chang, based his prediction on anonymous sources in the iPhone supply chain and an application Apple had filed with the U.S. Patent and Trademark office for a “Telephone Interface for a Portable Communication Device" that features a click-wheel dialing mechanism.

This sort of guesswork has heretofore primarily been the domain of Mac rumor sites. For years Macolytes have eagerly devoured any crumb of news at such places as AppleInsider, LoopRumors and MacRumors, trying to discern if a particular Mac model was indeed getting a faster processor next week or if the next version of Mac OS X would include the native ability to run programs written for Windows. But the world at large generally ignored the speculation of a few Mac fanatics – and rightly so.

For a professional analyst to release an official opinion based on the stuff of rumors is nothing short of alarming. Investment banks like JPMorgan must carefully tend to their reputations. If investors have cause to believe a financial institution is basing their advice on smoke in place of careful research grounded in verifiable facts, it risks losing all credibility. Though Chang hasn’t destroyed JPMorgan’s credibility, he did punch a substantial hole in it.

Nearly as guilty are the lemming-like media who rushed to report Chang’s prediction without skepticism, and the equally gullible Wall Street types who bid up Apple’s stock on those weak reports. It’s not like these folks haven’t been burned before. Back on May 16 Apple’s stock plunged 3 percent in six minutes after the Web site Engadget published what it said was a leaked internal Apple e-mail indicating that the iPhone launch would be delayed until October. The stock recovered after Apple issued a statement refuting the news and shortly afterward the e-mail was revealed as a hoax.

As it turned out the Chang report, too, was refuted, but from an unlikely source – another JPMorgan analyst. On Tuesday New York-based analyst Bill Shope pulled the plug on the buzz when he sent a note to clients saying that a cheaper iPhone Nano would be “unusual and highly risky.” He acknowledged that a cheaper iPhone with improved features was “inevitable” (duh!) but that such a development was “unlikely in the near term.” A refreshing dose of common sense, but it put JPMorgan in the uncomfortable position of having to reconcile its dueling analysts. An unnamed source at JPMorgan told The Times of London that Shope’s comments did not represent a retraction, and that somehow it stood behind both reports, explaining that the bank had “several analysts looking at the same stock.” Uh-huh.

Yet with so much embarrassment to go around, I expect the same reaction the next time a juicy, yet unsubstantiated Apple rumor arises. They just can’t help themselves.