For Russia oil equals money, what if the money dries up before the oil does?

For most countries, the economic slowdown in China and the accompanying slump in commodity prices represent something between nuisance and pothole.  For Russia, they are a catastrophe.

Russia’s currency and economy, already squeezed by Western sanctions, have been sent into virtual free fall by slumping oil prices. The IMF now puts Russia’s long-term potential growth at 1.5%. I personally think it’s just 1%, astonishing for a country whose standard of living is barely 40% that of the U.S.

Russia is indeed skating on thin ice: Cheap oil, Western sanctions and years of mismanagement have sent its economy into a deep freeze. Now everyone is wondering when the ice will crack.
                                                         
Inflation has soared to 15%, the ruble is trading near record lows, consumer and business sentiment is on the slide, and its companies are shut out of financial markets in the US and Europe.

For More: http://us.wowcity.com/newjersey/pottersville/page_article/?id=7137

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It's time for capitalism to grow up

The 1987 crash was thus not provoked by events in the real economy but by a supposedly smart risk-management strategy— and the current downturn also derives at least partly from a global craze for a seemingly foolproof financial innovation.

Investors in financial markets rationally pursuing individual profit, can produce outcomes that are globally negative. Doesn’t that contradict classical economic theory? “Both theory and empirical facts do tend to show that,” says Cont. “On the financial markets, the ‘Invisible Hand’ does not always lead to welfare-improving general outcomes.”

Hence, free-market capitalism is not dead, but it is unclear whether there is any better alternative. In fact, I strongly believe that capitalism has to grow up and become less naïve, relying less on a blind faith in the invisible hand and more on an understanding of human nature, including insights from the field of behavioral economics.

For More: http://www.foxnews.com/opinion/2012/03/13/its-time-for-capitalism-to-grow-up.html

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Bullish on Stocks? Think about this for a moment

One of the most important things you can do as an investor is to try to seek out smart arguments that lay out the opposite side of the views that you hold. In other words, if you’re bullish, you should seek out smart bears, and vice versa.

And if you’re so sure that stocks are just going to keep going up and that anyone who voices caution is a moron — then at least think about this

Someday, financial markets will again decline. Someday, rising stock and bond markets will no longer be government policy – maybe not today or tomorrow, but someday. Someday, QE will end and money won’t be free. Someday, corporate failure will be permitted. Someday, the economy will turn down again, and someday, somewhere, somehow, investors will lose money and once again come to favor capital preservation over speculation. Someday, interest rates will be higher, bond prices lower, and the prospective return from owning fixed-income instruments will again be roughly commensurate with the risk.

For More: Bullish on Stocks

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