What's right with the capital markets
Mood:  caffeinated

You must be wondering if anything is right with the markets?

Yes - but first let's review some of the most significant events in the recent history:

1. Gold at all time high: If you believe that the total stock of Gold on this planet should track money supply at least somewhat linearly, then Gold prices do not seem that high.

[In 1959, there were $518 in circulation for every ounce of Gold reserves held by the USA. Now, the number is closer to $38,000 for every ounce of Gold. The reason is that the US is prining money at a disproportionately high rate. ]

The above, among other things, had created an artificial high valuation for $ which was bound to fall.

2. Most other commodities prices (such as crude oil., wheat, platinum, industrial metals) have increased  sharply in $ terms and in non-dollar terms (even though, not so sharply.)

3. Real Estate bubble all over the world has been stretched for too long

4. The interdependency of finanvial markets worldwide and the complexity of trading can lend itself quite well for a big domino effect as has been seen several times recently.

I could go on .. but let's see why all this makes sense.

The financial markets are self correcting and even though the correction is starting a bit late this time, it will be effective and painful while it lasts.

This will eventually make the matters right once again. And that's what is right about capital markets right now. The markets are supposed to work this way - inject the risk in again so that rewards can start flowing again to those who want to take this risk.

 

Are we compulsive about technology
Mood:  caffeinated

Are we getting compulsive about technology? Are our productivity tools becoming "counter-productive"?

I am based in the heart of the Silicon Valley. I see a lot of friends and other people around me becoming slaves of their gadgets. For example, a friend of mine gets nervous if he does not get a new email in a 10-minute timespan even if it is a Sunday afternoon. He starts emailing his contacts hoping that someone will respond so he can go about using his blackberry. I just heard on the radio that someone in Canada has actually made a crackberry helmet to save people from serious injuries due to blackberries.

We are becoming a society full of individuals who are stuck in their own shells. These people have ipods to their ears, blackberries at their finger tips but (and actually therefore) have no time or brain left to look around to talk to a neighbour. Funny thing is that they are proud that they are in touch with someone 10,000 miles away but not their friend who is 5 miles away or family who is in the house.

Give it a thought...