financial turbulence
I think Alan Greenspan is one of those guys that is nearly a caricature of himself. When I see this guy talking about irrational exhuberance when he lowered interest rates below inflation after the dotcom bubble, creating another housing bubble. One day he openly critiquizes Bush's government to sell his biography, and the next day I see a picture of him with Bernanke in the White House. Man, you gotta love bankers, they surely know how to do business.
Seem central money authorities try to avoid economic crisis at all cost by adjusting the rates to soften the economic cycle as much as possible. But is this working? are economic bubbles worse than crisis? To me seems that economic bubbles are a way that allows the richest to keep having their income growing while putting more weight into the less wealthy. There is a group of people that got inmensily rich with the housing bubble worldwide, a few of them might be stuck today and are going to have some loses for not timing properly.
The ones who will "pay the duck" in this case will be the home owners who will be left with mortgages for houses that depreciate. We have already seen how the FED lowers interest rates by 0.5% even with higher risk of inflation by oil price rise.
I'm very annoyed. At year 2000 I was studying in the university and couldn't make good income or a nice career on the high salaries of the .com age. Now I'm caught in the global housing bubble. People my age are having big trouble to get a decent place to live. So far, fucked two times. Prices scalate around, and perspectives of income are lower. I hope I can caught the next wave, at least not to be any more poorer.
The next wave will come soon, even as the hungover from the credit crisis is not still disipated. I see the world economic scenario as follows:
* Very few banks are going to get caught by this, and before it happens, many lifesavers are going to be thrown by government, central banks, etc. Some might get on fire if critical mass of people deciedes so, like Northern Rock.
* The financial companies that have their ass tight today, are going to be the high gainers of the following periods, for the huge debt most of the public has. So good time to invest in Banks, perhaps a couple of days late. Biggest banks the least risk, down to smaller institutions for the biggest risk.
* Next economic wave/bubble wathever is likely going to be energy. Its demand is very inelastic and seems probable that there is going to be more oil supply trouble. We have been whitnessing big corporate movements in the energy sector in Europe. Big players are getting in position, GazProm, Suez+Gas de France, EON, Endesa, Enel, Iberdrola. The party is about to begin, the cake to be splitted and everyone wants the biggest cut. Good time to invest in oil, gas, electric and perhaps biodiesel and alternative energiesfor the longer run.