The world has become such a complicated place lately. Or maybe it just has to me because I have been reading every newspaper I could get my hands on. Whenever I read a paper, my eyes move automatically to any headlines dealing with investments. Because of this innate mechanism, I now know that the US must get itself out of the housing bubble before it bursts and that Ben Bernancke will soon review the NOMINAL interest rate in order to decide whether or not to lower it. Cause: Institutional investors have made completely unethical decisions to package and repackage mezzanine CDO’s, containing questionable levels of subprime investments in the mix, in the trading world. These CDO’s still received A-ratings or higher from the US credit rating agencies. Effect: This will fuel investors’ fears of higher interest rates, and long-term funds will probably come back with a huge price tag to compensate for risk. But I am no economist.
More recently, The Blackstone Group has acquired a 20% stake in a large, mostly state-backed Chinese chemical company. This is among the largest private foreign investments to take place in China’s marketplace, outside of the financial sector, in spite of China’s governmental control of such free-market meddling. Cause: China’s emerging superpower status. Effect: China’s and the US’s combined – and sparring – superpower statuses. But I am no political scientist. It is not so easy to take each fact at face value in one short article in one newspaper. This is why I have caught on to reading multiple papers and getting sucked in to reading lengthy analyses of the headlines. The more information I garner from all of this stuff, the more complex everything seems to me!! Who was it that said ‘ignorance is bliss’? Perhaps he was right.
Photo courtesy of flickr.com user acerminaro