Sunday, December 13, 2009

Au revoir...

Dear Sober Look readers and friends,

Due to some rapidly changing personal circumstances, I have decided to put Sober Look on hold for the foreseeable future. It has been an amazingly rewarding experience and a privilege to be involved in this project. From the bottom of my heart I would like to thank all the readers for your support. I’ve learned a tremendous amount from your thought-provoking comments and e-mails.

Technology such as Blogger has allowed thousands of people to express their views and bring out concepts and information that the mass media often fails to do. Just because financial media reporters sometimes don’t understand concepts, doesn’t mean that the public shouldn’t understand them either. Just because the media sometimes wants to incite anger to improve ratings, doesn’t mean the anger is properly directed or even warranted. My goal with Sober Look has been to bring out alternate ways of viewing this crisis and it's sources, the economy, and the financial system.

A Bloomberg commentator Caroline Baum once said that if you want to know where the next financial crisis will come from, just look to the most popular current trends. Whether the tech IPOs and emerging markets in the 90s or the housing boom and securitization during this decade, this saying has proven to be correct again and again. These trends can persist for years until their invulnerability is no longer questioned. And then arrives an abrupt, painful, but never a fully anticipated conclusion.

The key is that the seeds of the next crisis are usually sown while the current one is still being played out. And it is often the reaction to the current crisis that sets us up for the next one. This concept is of course not limited to finance or economics, but is evident in the geopolitical arena as well. For example the Soviet occupation of Afghanistan and their ultimate defeat was a crisis that saw the birth of Al Qaeda, leading to the next geopolitical crisis.

As we look to the next decade, what are the signs of popular financial trends now emerging to haunt us in years to come? What about favorites such as China’s rapidly growing markets, commodities (particularly gold), and the ever popular US Treasuries? Economists and financial forecasters have never been so divided about the future. With rapidly growing global liquidity, continuously evolving markets, and accelerating capital flows, one thing we can be sure of - the next decade will see yet another crisis, possibly more than one.

But that doesn’t mean we should all be buying guns and store canned food in order to be prepared. With each crisis will come tremendous opportunities – from investments, to new businesses, and new jobs. The goal is to keep an open mind, keep learning, and keep questioning. And for my fellow bloggers who want to clear up misinformation, look through the hype, let others know of alternate ways of thinking, and point to the next crisis... keep on blogging. I’ll be reading.
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