Haven’t posted in a while because I’ve been sitting back watching the wild market gyrations, trying to get a feel for if the bottom is really going to drop out from under us or if the fall has run its course in the short term and if a bounce is on its way. I’ve also been spending a lot of time reading The Creature From Jekyll Island and I’m happy to say I just finished it. Look for a post on it in a day or two. Anyway let’s check in on some of the goings-on.
- Sleepless in Iran - [NY Times]
It will be interesting to see how the decline in oil prices plays out in countries that were depending on high prices to fuel their spending programs and anti-Western rhetoric, such as Iran, Russia, and Venezuela.
“(Incidentally, this was exactly what happened to the shah of Iran: 1) Sudden surge in oil prices. 2) Delusions of grandeur. 3) Sudden contraction of oil prices. 4) Dramatic downfall. 5) You’re toast.)
Under Ahmadinejad, Iran’s mullahs have gone on a domestic subsidy binge - using oil money to cushion the prices of food, gasoline, mortgages and to create jobs - to buy off the Iranian people. But the one thing Ahmadinejad couldn’t buy was real economic growth.”
To me, this sounds awfully similar to speculative bubbles and the irrational exuberance they create. People get caught up in the effects of a temporary economic situation, thinking it’s a new economic reality, and forgetting that markets are dynamic and can go down as well as up. And the cycle repeats itself.
- Roubini Says U.S. Needs $400 Billion Stimulus Package - [RGE Monitor]
I’m definitely dismayed to see such a sharp economic mind call for Keynsian “stimulus.”
- Pop Goes The Weasel - [Evil Speculator]
A good analysis of the current state of the markets
