Irrational Exuberance

When the Dow was at 14,300, a 10% correction would seem necessary, at the least. The markets fell over the past month, getting as low as 12,800. While a setback for some, this was movement in the right direction for the economy as a whole. Many financial indicators: Housing (home sales, subprime issues, etc.), crude oil prices (NOTE: Saudi Arabia is currently the only OPEC member with excess capacity. Remember your Econ 101?), and the global valuation of the US dollar seem to imply that a draw down in the economy is not only coming but is inevitable. First consider that the Stock Market is not the economy but a single measure of its health. After the "correction", the Dow is now almost back to pre-drop levels, in the course of a week. Allan Greenspan's famous phrase seems to capture this fluctuation precisely. This should be taken to heart as the larger economic issues begin to surface as a result of not only the stock market's "irrational exuberance" but also that of the recent "era of cheap capital" of which subprime is only the tip of the iceberg.

Cold, Colder, Coldest

50+ MPH winds today in the DC area, 35 degrees... Winter is here! Canaan Valley is a great place to stay (when there is white stuff) and Whitetail is the best to get to when you've got a quick dose of fresh powder. Now we just need snow.

Not a single snow slope is open in the area because of the warm weather. While this warmth is not, in itself, an indicator of global warming it sure is bringing the issue to light for a great many people. I'm excited to see the innovation necessary over the next 25 years to stop and reverse this trend. The greatest change will have to come in the conservation, cleansing and reclamation of fresh water. China is exacerbating it's desertification issues with the creation of the Three Rivers Damn.