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Showing posts from December, 2014

Happy Holidays!

Happy holidays to all. Year 2014 is almost ending. As we close on 2014, it was interesting to see that last week became kind of historical week with 3 different "communist" countries in news for different reasons. Russia - its currency ruble dropped by nearly 50% in last 6 months. Last week was capitulation when it ranged from 60 to 80. That's unheard in currency markets. Has ruble stabilized around 60. I doubt it. But worst may be over and it should hover between 40 to 60 for next few months unless Putin pulls up something like what he did in last spring. Oil dropping also did not hep Russia.  Cuba - Cuba was in news for good reasons, After nearly 55 years, US and Cuba has re-opened discussions and started process of normalizing relations. This could be good news to Cuba and America. Americans would be flocking to Cuba for vacations and buying lots of Cuban cigars North Korea - Looks like North Koreans found more effective way (than building nuclear bomb) to attack

America's bubbles: Dot-com, Housing and now Oil

Looks like bubbles have 7-year itch. Every 7 years one bubble starts bursting based on recent history: 2000-2001 - Dot-com bubble started to unravel 2007-2008 - Housing/Finance bubble 2014-2015 - Could this be unravelling of great energy bubble which was forming around oil and shale gas If oil price is any indication (down by nearly 45% in one year), that seems to be case. In capitalist system, there are always excesses which need to be adjusted by these bubble-bursting events. In today's WSJ, there is article about unravelling of oil boom  which provides pointer to seed of this oil bubble. Ironically it was planted right when previous housing bubble started bursting. I am sure if we go back to 2000-2001, we would notice that similar seeds were planted for housing bubble. Are these 7 year bubble cycles would be new norm? Similar to technology bubble which mostly impacted high-tech areas like Silicon Valley, this time pain would be mostly around oil producing states like Te