Friday, October 10, 2008

Glass Planets Revisited

A few months ago, I wrote a post, Monday, January 21, 2008 Governments Living on Glass Planets..." My point was, basically, when the biggest market in town goes down, the competition shouldn't party too hard. There may be a reason the market went down, and others may find themselves bailing out the same sinking boat. Also, there might just have been some major, but invisible, benefit from that first market existing and doing business in the first place. In other words, your own imagined shine may just be a reflection of someone else's glow.

A few months ago, I didn't foresee bank collapse Armageddon looming on the horizon. Last week, politicians were saying, "Unless we stick a $700 BILLION patch on this boat, it will sink." Today, the DJIA dropped under 9000, the lowest in 5-1/2 years. No, I didn't expect all this.

What I said, what I'm seeing, and what I expect to see more of, is the horror in other markets as our own struggles to recover. News across the international board is bad. No national or regional stock market is raking in big windfalls as American markets tank. Why is this not so? Isn't all economics a "zero sum game", where every loser creates a winner? Shouldn't all world markets surge as NYSEX, AMEX, and NASDAQ draw down?

I'm starting to get the idea (massive sarcasm intended) that all markets are interdependent!

The Russian president is out there making comments about the failures of capitalism, and the loss of superpower status. Leading a nation which dived so deep they couldn't pay public servants or military, President Medvedev should, perhaps, tone down the smug rhetoric.

Bottom line, thrown stones come back in other nasty forms. Isn't that so, Nikkei?